One common question among beginners: is dropshipping on amazon profitable? If you’re thinking about starting an Amazon business, you might be wondering how much you can earn. Selling on Amazon has become more popular as many people are looking for ways to make money online.
With the right knowledge and effort, it’s possible to earn a good income. However, the amount you can make on Amazon varies, depending on several factors. Whether you’re just getting started or have some experience in ecommerce, this article will give you helpful insights.
What is Amazon dropshipping?
Amazon dropshipping is a simple business model where you sell products on Amazon without needing to keep inventory. When someone buys a product from your Amazon store, the supplier ships it directly to the customer. This means you don’t have to worry about storing or handling the products yourself.
Your main job is to find good products to sell, list them on Amazon, and promote your store. Once a customer makes a purchase, the supplier takes care of the rest – packing and shipping the product.
This model makes it easier to start your own business since you don’t need to invest in stock upfront or deal with the logistics of shipping.
Overall, Amazon dropshipping can be a low-risk way to start selling online, especially for beginners. However, it’s important to find reliable suppliers and ensure great customer service to succeed.
How much do Amazon sellers make?
The amount of money you can make as an Amazon seller varies depending on a few key factors. Some sellers may earn only a few hundred dollars a month, while others can make thousands. For beginners, it’s common to earn between $1,000 and $5,000 per month.
This amount depends largely on the type of products you sell, how well you market your business, and how much effort you put into growing it. As your business grows, your income has the potential to increase.
Starting an Amazon business is quite simple and affordable. You don’t need a huge investment to get started, setting up your account and listing products is easy to manage.
While it takes time and effort to grow your business, the process itself is straightforward. With the right plan and consistent work, you can start making money without much complexity.
As you gain experience, you may find ways to boost your earnings by refining your product offerings, improving your listings, and marketing your products more effectively. It’s important to remember that success on Amazon requires strategy, dedication, and continuous learning.
Is Amazon dropshipping still profitable ?
Selling on Amazon can be profitable, but it’s not guaranteed. Amazon gives you access to a huge audience, which can help your business grow. However, Amazon also takes a percentage of every sale, and there are additional costs involved, such as advertising and fulfillment fees.
If you choose the right products and manage your expenses well, selling on Amazon can definitely be a profitable venture. It’s important to carefully consider your costs, pricing, and advertising efforts.
Profit margins
Amazon sellers typically see net profit margins of around 15-20%. As you gain experience, you could improve this number. However, for beginners, the first year might be modest, with many new sellers making around $30,000 annually. Growth is gradual at first, but with the right strategy, profits can increase over time.
Investment costs
Starting an Amazon business doesn’t have to be expensive. The amount you invest can depend on the type of business model you choose, whether it’s reselling, private labeling, or wholesale. To get started you need less than 500$.
Great news is – you can use Sellvia’s solution – that offers a free-trial for 14 days with Amazon business as a bonus! You don’t have to spend a single $!
Business models
There are a few ways to sell on Amazon, each offering different profit potential. If you go the reselling route, you might earn around $300 to $2,000 a month. On the other hand, private labeling can involve higher upfront costs but offers higher profit margins, with new sellers potentially earning between $500 and $5,000 monthly.
Long-term prospects
As you continue to build your business, there’s the potential for growth. Around 40% of experienced sellers report making between $1,000 and $25,000 a month.
Selling on Amazon can definitely be profitable, but success requires patience and a well-thought-out plan. Product research, smart pricing strategies, and using Amazon’s tools – like ads and reviews – can help boost your chances of making a steady profit.
How quickly can you start making profits from dropshipping on Amazon?
One of the great things about selling on Amazon is that it’s possible to see profits fairly quickly. In fact, statistics show that 64% of sellers reported becoming profitable within their first year.
Some sellers even see profits within just a few months: 21% made a profit within 3 months, while 24% saw profits within 3 to 6 months. Around 19% of sellers became profitable between 6 months and a year, and only 11% took 1 to 2 years to reach profitability.
That being said, everyone’s experience is different. Some sellers may take longer to become profitable, but the good news is that the potential for earning on Amazon is high, and many people start seeing results in a relatively short period of time. In fact, only 2% of sellers reported taking more than 2 years to see profits.
Ways to sell on Amazon
Amazon FBA
Amazon FBA (Fulfillment by Amazon) is a service that lets you store your products in Amazon’s fulfillment centers. When customers buy from your store, Amazon handles everything – storage, packing, shipping, and even customer service.
You pay fees for using Amazon’s services, but in exchange, you get access to their massive customer base and efficient delivery system.
Amazon FBM
Amazon FBM (Fulfillment by Merchant) is a method where you, the seller, manage everything from storing products to packing and shipping them to customers. FBM gives you more control but requires more work, including handling customer service and returns.
It’s a good choice if you want to keep costs low and manage your inventory, though you won’t have access to Amazon Prime benefits.
Dropshipping
Dropshipping is a way to sell products without holding any stock. When a customer places an order on your online store, you simply forward it to a supplier, who then ships the product directly to the customer. This means no need to worry about inventory, storage, or shipping. It’s a low-risk way to start an online business, allowing you to scale without extra storage or a huge budget.
Key differences between Amazon FBA, Amazon FBM and dropshipping
Inventory management
Amazon FBA: You buy products in bulk and send them to Amazon’s warehouses. With Amazon, storage and shipping are handled for you, but you’re responsible for managing inventory and upfront costs.
Amazon FBM: You buy products and store them yourself. You also handle packing and shipping directly to customers.
Dropshipping: You don’t need to manage inventory. After a sale, the supplier ships the product directly to the customer. This eliminates inventory costs and storage needs, making it more convenient.
Initial investment
Amazon FBA: Requires a significant upfront investment for bulk inventory, shipping costs, and Amazon’s fees.
Amazon FBM: While not as expensive as FBA, you still need to buy inventory and cover shipping and storage costs.
Dropshipping: The most cost-effective for beginners. There’s no need to buy inventory upfront, allowing you to start with minimal investment.
Profit margins
Amazon FBA: Higher profit margins because buying in bulk reduces the cost per unit.
Amazon FBM: Margins vary based on pricing and fulfillment efficiency but are typically lower than FBA due to individual product costs.
Dropshipping: Profit margins are usually lower since products are bought individually at higher prices. However, you don’t have to worry about inventory, which makes it easier to scale without the pressure of large upfront investments.
Shipping and fulfillment
Amazon FBA: Amazon handles all shipping, including packing and delivery, ensuring fast and reliable service.
Amazon FBM: You manage all fulfillment, meaning you are responsible for storing, packing, and shipping products to customers.
Dropshipping: The supplier handles shipping. While this is convenient, it also means less control over delivery times and product quality.
Control over branding
Amazon FBA: More control over branding, as you can customize your packaging.
Amazon FBM: Full control over branding since you handle packaging and fulfillment.
Dropshipping: Branding is more limited since suppliers control packaging, but you can still ensure a consistent experience by selecting the right suppliers.
Scalability
Amazon FBA: Scaling is easier because Amazon takes care of logistics. You can focus on growing your business without worrying about fulfillment.
Amazon FBM: Scaling is more difficult since you need to manage increased inventory and fulfillment demands.
Dropshipping: Scaling can be tricky due to reliance on third-party suppliers, but it remains a flexible model that doesn’t require inventory management or handling logistics yourself.
Which model is right for you?
Amazon FBA: Ideal if you have the capital to invest in bulk inventory and want a more hands-off approach to fulfillment.
Amazon FBM: Good for those who want more control over inventory and fulfillment but are ready for the time and effort involved.
Dropshipping: Perfect for beginners who want to minimize upfront costs and avoid inventory management, while still having growth potential.
Dropshipping offers the simplest, most flexible way to start an online business with minimal investment and no need to handle inventory or shipping. It’s the ideal choice for beginners, especially when compared to Amazon FBA and FBM, which require more investment and logistical management.
You can simplify things by teaming up with Sellvia. We’ll tell you about Sellvia and why it’s a top choice for launching your online store in the next section!
About Sellvia
Sellvia is a leading choice for US-based dropshippers and a trusted Amazon dropshipping supplier. Established in 2015, Sellvia has quickly built a reputation for being reliable and customer-focused, offering high-quality products and exceptional support.
Our goal is simple: to help entrepreneurs succeed by providing them with the tools and guidance they need to build and grow a successful online business. Whether you’re new to dropshipping or already have experience, Sellvia is committed to supporting you every step of the way.
Why choose Sellvia for dropshipping on Amazon
Seamless integration with Amazon
Sellvia makes it easy to start selling on Amazon. Our platform integrates smoothly with Amazon, so you can set up your store and start selling right away. When a customer places an order, the details are automatically sent to us, and we take care of the rest, including inventory and shipping.
This automation saves you time and reduces the chances of errors, letting you focus on growing your business while we handle the logistics.
Wide range of products
One of the main benefits of working with Sellvia is our large selection of products. We offer a variety of categories, including home and garden, electronics, fashion, and more. This gives you the flexibility to choose products that appeal to a wide range of customers, helping you grow your business.
All products in our catalog are carefully chosen for quality and reliability, so you can trust that what you’re selling meets high standards.
Competitive pricing
Pricing is a key part of running a successful dropshipping business. Sellvia offers competitive wholesale prices, allowing you to maintain healthy profit margins while offering affordable prices to your customers. With our pricing, you can stay ahead of the competition and still make a profit.
Exceptional customer service
At Sellvia, we know that great customer service is vital to your success. That’s why we offer dedicated support managers who are always available to help with any questions or issues.
Our team works quickly to respond to your needs, ensuring you can keep your business running smoothly. Whether it’s help with product listings or fulfilling orders, we’re here to assist you.
Sellvia is more than just a supplier; we’re your partner in success. Whether you’re just starting your dropshipping journey or looking to expand, we’re here to provide the support you need to thrive.
Conclusion
Amazon dropshipping presents a viable and profitable opportunity for beginners looking to start an online business with minimal upfront investment. The low-risk nature of the model, where you don’t need to purchase inventory upfront, makes it an attractive choice for those just getting started.
While profit margins may be thinner compared to other models like Amazon FBA, the ability to scale without worrying about inventory or shipping logistics is a major advantage.
Success on Amazon dropshipping requires careful product selection, smart marketing, and consistent effort. With the right strategy and support, like what Sellvia offers, you can steadily grow your business and achieve profitability.
