If you’ve heard about dropshipping and want to know how to dropship on Amazon without money, this article will help you get started.
However, the truth is, to start an Amazon dropshipping business without any money at all is a bit of a pipe dream and you will need a small amount of cash or even a credit card, to get your business off the ground.
However your investment will be minimal and before long you’ll be able to use the profits you create to reinvest and grow the business.
Here is an overview of how to start dropshipping on Amazon without using any actual cash;
- Sign up for an Individual Seller Account on Amazon – free, but each sale will cost $0.99
- Manually research niches and items to find the most profitable and popular products
- Find a quality supplier and list products
- Promote your Amazon listing on social media or use free influencer marketing
- When a sale is made, purchase the products on behalf of your customer (it takes too long for Amazon to release the funds), using a credit card
- When the funds are released from Amazon, pay off your credit card.
NB: This is a pretty long and laborious option which is doable, but will mean your dropshipping business will grow at a snail’s pace.
Throughout the rest of this article I’ll discuss free and paid methods to start and grow your Amazon dropshipping business, so you can choose the correct route for you.
Dropshipping is an eCommerce business model in which you will take orders on behalf of the distributor, supplier, or manufacturer.
When a customer purchases the product, your supplier will be responsible for fulfilling the order (that is, shipping the product to the customer).
As a drop shipper, you will reposition the sold products as your own. The customers purchasing the goods will never know that the products were shipped to them by the manufacturers.
Apart from Amazon dropshipping, you can also participate in Shopify and eBay dropshipping.
Before you start dropshipping, you must review Amazon’s rules or you risk having your Amazon seller account suspended.
Here are the things you must remember for your dropshipping online business:
- On external packaging, packing slips, invoices, or any other information included with the products you must identify yourself as the seller. There should not be any mention of the manufacturer or the supplier.
- Accepting returns and processing them will be your responsibility.
- You must comply with the Terms of Service of Amazon as per the seller agreement.
For instance, if you purchase a product from another online store such as Walmart or a Shopify store, and have the online retailer ship it to the customer with their branding or identifiers of their online store, you can have your Amazon account suspended.
Before you can start dropshipping on Amazon, you’ll need an Amazon seller account. There are two types of seller accounts that Amazon offers:
- Individual Seller Account
- Professional Seller Account
With an Individual Seller Account, Amazon will charge you $0.99 for each sale. You cannot sell any more than 40 items a month with this account.
The Professional Seller Account comes with a monthly subscription fee of $39.99. You can sell more than 40 items a month and Amazon will not charge you for each item you sell.
Both accounts will allow you to run a successful dropshipping business on Amazon.
If you intend to sell less than 40 items through Amazon, using an Individual Amazon Seller Account makes more sense because it will be far cheaper.
If you want to sell 40 or more items, a Professional Seller Account is the obvious choice. Additionally with the pro account, you also get in-depth inventory reports, can create listings in bulk, use advertising services of Amazon, run promotions, and more.
Listing products on Amazon’s online store for your dropshipping business will not cost money. But once someone purchases the product, you must pay your supplier for the product to be shipped to the customer.
You can’t wait until Amazon releases the funds and then pay the supplier for fulfillment as this will take too long.
So, you’ll need either cash or a credit card to acquire the inventory.
If you use a credit card to pay for the products you have some extra time within which you can get paid by Amazon and repay your credit card bill.
However, it does come with some risk. If for some reason Amazon decides to suspend your account, you will be left with a credit card bill that you must pay no matter what.
Also you’ll need to ensure you’re working with trusted suppliers who aren’t going to run off with your money!
So just bear that in mind before you start paying for products.
Let’s now have a look at how to dropship on Amazon without money or at least with very little!
Here are the steps to sell products using the Amazon dropshipping business model;
To start dropshipping on Amazon, you’ll need to find profitable niches. This is probably the most important step in your business process, because selecting the wrong niche may lead to losses.
You can search for products manually by looking at how popular they are in the search results, how in demand they are, by reviewing their best seller rank (found in the product details – the lower the better), what kind of price they sell for and how many reviews they’ve had.
However, this is a long and laborious process. You can see my article here on what to sell on Amazon for more details on how to research niches and products.
Finding the right products is made far easier by using a paid tool like Jungle Scout Opportunity Finder which will quickly root out the products that have high demand but low competition.
The target is to find products that fulfill the following criteria:
- Sales per month: 100 to 300 units
- Competition: Very low or low – determined by lower review numbers
- Average product price: $20 to $35
- Niche score: 7+
A niche score of 7+ usually indicates that the product is in a popular niche, and it will be a smart decision to start your dropshipping business with that product.
Also, check the historical sales for the products. If a product sells consistently and has a high niche score, it is a great choice.
Jungle Scout is my personal tool of choice, however it’s not the only tool on the market. AMZscout is another tool that can help you find similar information.
Once you have locked on to a product category or niche, you’ll need to source the products for dropshipping on Amazon, for which you need to find suppliers.
Most Amazon sellers use AliExpress to source their products from China. It’s like a B2B version of Amazon where eCommerce entrepreneurs can connect with suppliers.
To find a product, you’ll input your search terms and AliExpress will display dozens of products along with various details such as price, shipping, contact details, dropshipping support, etc.
But AliExpress is not the only option. If you use the supplier database in Jungle Scout, you’ll find all the US import records and see which products are being sourced from where.
However, remember that when you are sourcing products from manufacturers in China, although the products will be low price, the shipping time will be very high, which is not always ideal for an ecommerce business. Especially when you’re competing against Amazon prime for example.
To alleviate this, if your dropshipping business strategy has room for higher prices, you could go for local dropship suppliers such as ThomasNet to save time. However, product prices will be higher.
After you select your niche and a dropship supplier, head over to Amazon and create an Amazon Seller Account through Amazon Seller Central.
As I said above you have the choice to create an Individual account or Professional Account for dropshipping on Amazon.
I recommend signing up for a professional account from day one, so you have access to advanced data and can promote your products using Amazon PPC ads.
To get started dropshipping on Amazon, you’ll need to list your products. Once you sign up for the seller account of your choice, log in and go to Inventory » Add a product.
Once the Add a product screen shows up, create on the option ‘Create a new product listing.’
From there select the product category and create the product listing by filling out the necessary information.
When it comes to setting the price for the dropshipped product, make sure you add on Amazon’s fees, which can be anywhere between 8% to 15% in referral fees, depending on the product category.
You’ll pay this referral fee irrespective of whether you have an Individual or a Professional seller account.
If you have an Individual Amazon seller account, you’ll also pay an additional $0.99 per sale.
Once you have completed your product listings, you can start selling the products. For that, you need to attract traffic to your product listings.
The quickest and simplest way to start getting eyeballs on your listings is to use Amazon PPC ads or Pay-Per-Click ads. With this approach, you’ll create ads for the dropshipping products, which will ensure they appear higher in Amazon search results than general Amazon listings, for the keywords you set.
Remember, this will cost money.
To start promoting without money, you can use email marketing, blogging, social media, podcasting, etc., but of course you’ll need to build a large and engaged following to generate any kind of interest in your products and boost sales.
In this final step, when a customer purchases the product you’ve listed on Amazon’s online store, you’ll need to forward the buyer information to the dropship supplier so that the supplier ships the product to the customer.
There are various tools that can automate this process, so you don’t have to do it manually, but they’re not free! So I suggest doing manually to start with until you’ve proven the model, have started to attract lots of sales and need a tool to speed up the process.
Remember, for returned products, you must accept and process them, so finding a good supplier with quality products is essential.
- It has extremely low to no startup costs because you don’t need to purchase inventory. Therefore you don’t have a warehouse cost or storage fees to pay either.
- It is fast and easy to set up because you don’t have to wait for the products to be manufactured and shipped to Amazon fulfillment centers.
- There are apps and plugins that will allow you to automate dropshipping on Amazon.
- There are various research tools that will allow you to find highly profitable niches.
- Expect high competition because of low entry barriers. Other sellers and store owners can also sell identical products, so getting into the buy box can be very difficult.
- Since products are often shipped from overseas countries, delivery times can be very slow and order fulfillment can take from a few weeks to a few months to reach the customers.
- You cannot control the quality of the products because they are shipped directly by the suppliers and manufacturers.
Drop shippers must promote their products to drive traffic and boost sales. Selling products on Amazon will be nigh on impossible if your products are never seen. Use Amazon ads to promote all your listings and create an Amazon store for increased exposure.
Because there is nothing to manufacture and since you don’t have to maintain your own inventory, spend your time providing better customer service. Great customer service will help you to get fabulous reviews, and boost sales.
Before listing products for Amazon dropshipping, purchase at least one unit of each product you want to list on your Amazon online store.
Check the condition in which the products arrived, whether the products were exactly as described, how long it took to arrive etc.
This will give you an idea of the condition in which your customers will receive the products.
The preferred approach is to try to add as many products as possible. Some products will fail, and some will succeed. Note the ones that succeed and add similar products. Remove the rest. It’s a numbers game.
Yes, Amazon dropshipping can be profitable if you select the products wisely. You need to research your niche and products thoroughly, and you must understand Amazon’s fee structure to understand how much profit you can make.
Unfortunately it’s highly unlikely that you can dropship completely for free. Some up front costs will be required including potential basic business costs licenses etc, and purchasing the products on behalf of your customer before funds are released from Amazon. I also recommend buying samples and signing up to Amazon’s Professional Seller Account.
If you want to start as close to no money invested whatsoever as possible, sign up for an individual seller account which is free, but you’ll be charged $0.99 per sale.
Find a quality supplier, promote your products on social media for free and then the only purchase you’ll need to make will be the products as customers buy them. (This is because Amazon pays in set periods, minus costs, so you can’t wait for Amazon to release the funds before paying for a product or the customer will be waiting forever.)
But if you purchase the products by credit card, you’ll likely have the funds in time to pay it off before interest kicks in.
However, for a greater chance of success, sign up and pay for a professional seller account, use a tool such as Junglescout to help you find profitable niches and products and invest in PPC ads to promote your products.
Using this approach you could probably start your Amazon dropshipping business for between $500 – $1000, which is much less by the way, than other Amazon sales channels like the private label or wholesale models
Amazon dropshipping is a low-entry-barrier business model where you need very little initial investment. If done correctly, this amazon business model can be a very profitable venture.
In fact, drop shipping is a great choice for digital nomads and solopreneurs who don’t have enough time and capital to engage in private label, retail arbitrage, online arbitrage, wholesale, or even bookselling.
I hope this article on how to dropship on Amazon without money has helped. If you need some inspiration to take the leap, this Jungle Scout report has some interesting insights to keep you motivated.