This guide covers the details of how dropshipping works with Amazon, plus tips for reaching Prime members and making your fulfillment methods more profitable.

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Dropshipping in the Amazon store can be a convenient way to reach a global audience of online customers and sell products without holding inventory or paying upfront for storage. While it has advantages, dropshipping also comes with a unique set of considerations if you want to sell successfully in the Amazon store. This guide covers the basics and best practices so you can learn how to dropship on Amazon step by step.

Let’s dive in:
 

• How does dropshipping work in the Amazon store?
• 5 steps for dropshipping on Amazon
• Amazon FBA vs dropshipping: Which is right for you?

How does dropshipping work in the Amazon store?

You can sign up as an Amazon seller if you’d like to list products for sale in the Amazon store and coordinate with third-party suppliers to dropship orders directly to customers. Let’s explore the details of how to dropship on Amazon:
 

• What is dropshipping and how does it work?
• Is dropshipping allowed on Amazon?
• What is Amazon’s Drop Shipping Policy?
• Is Amazon dropshipping profitable?
• How much does it cost to start dropshipping on Amazon?

What is dropshipping and how does it work?

Dropshipping is a fulfillment method where you outsource inventory operations and sell online without managing products yourself. In contrast to other business models, you don’t need to purchase products that might not sell. The flexibility of dropshipping can be especially appealing to entrepreneurs and ecommerce beginners who want to get started with relatively small budgets. But it can also bring limited control over product quality, fulfillment processes, and shipping timelines.

Learn more about dropshipping

Is dropshipping allowed on Amazon?

Yes, dropshipping is allowed in the Amazon store as long as you follow Amazon’s Drop Shipping Policy, as well as any applicable laws and regulations in the countries or regions where you want to sell.

Learn more in our guide for beginners

What is Amazon’s Drop Shipping Policy?

Amazon’s Drop Shipping Policy provides a framework for how to dropship on Amazon. Requirements of the policy include:
 

• Have an agreement with your supplier identifying you as the seller of record, meaning you own the products before customers purchase them. As the seller of record, you’re also responsible for setting the price, recording the purchase as revenue, and handling sales tax.
• Make sure products and other materials like packaging, packing slips, and invoices, are free of any references that identify a third party.
• Be responsible for accepting and processing returns, and providing customer service that meets or exceeds Amazon’s policies.

These guidelines help ensure a great buying and selling experience. For example, if a customer finds a reference to a third party other than the seller or Amazon, they might be confused and not know who to contact if they have any problems or questions.

Review Amazon’s Drop Shipping Policy

Is Amazon dropshipping profitable?

Dropshipping on Amazon can be very profitable. More than 60% of sales in the Amazon store are from independent sellers, most of which are small and midsize businesses. In 2024, independent sellers in the US averaged more than $290,000 in annual sales, and more than 55,000 independent sellers generated over $1 million in sales.

Explore more Amazon selling stats

Pro TipEstimate how much you can make dropshipping with Amazon

To figure out if you can make money dropshipping with Amazon, calculate your margins and estimate your profitability. Product strategy, marketing efforts, and other factors can also make a difference to your bottom line.

Learn more about how to make money with Amazon

How much does it cost to start dropshipping on Amazon?

The total cost of dropshiping in the Amazon store varies depending on what products you want to sell and other factors. You may not have to invest in inventory, storage space, or fulfillment staff, but you could have other expenses like:
 

• Amazon selling costs: There are no Amazon costs or fees specifically for dropshipping. To sell in the Amazon store, you can get started with a Professional selling plan for $39.99 a month, plus other selling fees. You might have added costs if you use optional Amazon programs.
• Supplier costs: It’s possible to find suppliers who offer dropshipping services for free, but in other cases you could have expenses related to product costs, storage, shipping, and other areas. Be sure to ask a dropshipping supplier about any costs at the outset of working together.
• Operating costs: You could have basic business expenses related to accounting, legal consultation, or business insurance. It can also cost money to create and maintain a website, run advertising, and promote products with other types of marketing.

To calculate your total costs, try free sales estimators like the Amazon Revenue Calculator, which can help you compare profit margins for various fulfillment methods.

Try the Amazon Revenue Calculator

How to start dropshipping on Amazon: 5 steps

1. Create an Amazon selling account
2. Find products to dropship on Amazon
3. Establish relationships with dropshipping suppliers
4. List and promote products
5. Coordinate with the supplier on orders

Step 1: Create an Amazon selling account

To start dropshipping in the Amazon store, sign up for a selling account. Choose a selling plan, then register as a seller to create your account.

Learn more about creating a selling account

Step 2: Find products to dropship on Amazon

What are the best products to dropship on Amazon? Clothes, electronics, pet supplies, and many other product categories can work well with this fulfillment method. Here are some dropshipping product selection considerations:
 

• You likely won’t have much control over storage conditions. So you might have to avoid perishable goods or products that have special requirements like temperature-controlled environments.
• Some types of products like dangerous goods (hazmat) can be problematic for dropshipping and other business models.
• You typically don’t have the ability to customize dropshipped products because they ship directly from the supplier. So if you want to add a personal touch, like a thank you note or a special arrangement of units within a box, consider alternatives to dropshipping.

To zero in on profitable dropshipping product ideas, try a data analysis tool like Product Opportunity Explorer, which can help you identify product niches with high demand and low competition.

Learn more in our guide to product ideas

Step 3: Establish relationships with dropshipping suppliers

To find dropshipping suppliers that work with Amazon sellers, you can research dropshipping services online, explore directories, or attend events like trade shows. Seek out opportunities where you can network with manufacturers, wholesaler suppliers, and other types of businesses that offer dropshipping services.

How do you find suppliers for dropshipping on Amazon? You can either seek out suppliers and choose products from their catalogs, or you can research suppliers based on the types of products you want to sell. When you connect with a dropshipping supplier, ask if they have experience working with Amazon, and whether they’re familiar with Amazon policies.

Step 4: List and promote products

Once you’ve created an Amazon selling account, you can list products either individually or in bulk. You can also make use of automation for setting and adjusting prices, running digital ads, and other aspects of operating in the Amazon store.

Learn more about automation solutions

Step 5: Coordinate with the supplier on orders

In a typical dropshipping arrangement, when a customer places an order, you place a corresponding order with your supplier, who then ships the order directly to the customer. When you use dropshipping in the Amazon store, make sure to have a process for handling customer service. This should include processing any returns or exchanges and issuing refunds in a way that meets or exceeds Amazon policies.

Review the Amazon Return Policy

Amazon FBA vs dropshipping: Which is right for you?

Amazon FBA and dropshipping are two different fulfillment options, but they share similarities and can be used in combination with each other.

Fulfillment by Amazon (FBA) allows you to ship inventory into Amazon’s fulfillment network, where we take care of storing, packing, and shipping products, as well as customer service and returns. Like with dropshipping, FBA lets you outsource the entire fulfillment process so you can sell products without handling orders yourself. In contrast to dropshipping, FBA requires you to purchase inventory in advance of making sales.

It might cost more money to get started compared to dropshipping, but FBA can also present opportunities to scale and enjoy better margins over time. Because you purchase inventory before sending it into our fulfillment network, you also can benefit from a higher degree of control over product quality. With FBA, you also get the chance to sell with the Amazon Prime badge, which can help attract customers with fast, free shipping.

FBA vs dropshipping at a glance

WatchIntro to Fulfillment by Amazon (FBA)

Use FBA to offer Prime shipping to your customers and have Amazon pick, pack, and ship orders on your behalf. In this video, you’ll learn how FBA works and where to access additional FBA tools and resources.

Did you know?You can sell to Amazon Prime members and dropship at the same time

Mix and match a combination of fulfillment methods to meet your business needs. For example, you could test a product idea with dropshipping, then scale up using FBA.

Some sellers use Amazon FBA for faster-selling products and reserve dropshipping for slower-moving products. This way they can avoid storing inventory for long periods of time.

Learn more in our Prime selling guide

Is dropshipping with Amazon worth it?

Dropshipping in the Amazon store can present benefits like the opportunity to reach a wide customer base, and the ability to build your business in a store that customers trust. In 2023, Amazon was ranked the most trusted brand by US customers. If you want to start dropshipping on Amazon, register as a seller.

Whether you choose dropshipping, another fulfillment model, or a combination of methods, customer order fulfillment is an essential part of starting and building an ecommerce business. Whichever strategy you choose, we’re here to support your growth with tools, programs, and educational resources.

Frequently Asked Questions: Amazon dropshipping

Q:Can I dropship on Amazon?

A:

Yes, you can dropship with Amazon within the framework of our Drop Shipping Policy.

Q:What can I dropship on Amazon?

A:

You can dropship a wide variety of products within Amazon policies and guidelines. Learn more by reviewing the five steps outlined in this post.

Q:Is Amazon dropshipping legal?

A:

Yes, dropshipping is a legal form of fulfilling orders in the Amazon store and beyond. Be sure to follow our Drop Shipping Policy, as well as applicable laws and regulations based on the countries or regions where you want to sell.

Q:Do you need an LLC to dropship on Amazon?

A:

No, you don’t need an LLC to dropship on Amazon, although registering a business could be beneficial as you scale. Learn more about starting an ecommerce business.

Q:What do you need to get started dropshipping on Amazon?

A:

To get started dropshipping on Amazon, you can:
 

1. Create an account to become an Amazon seller
2. Research the products you want to sell
3. Establish relationships with reliable suppliers
4. List products
5. Drive sales

Start selling today

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*A Professional selling plan is $39.99 a month + selling fees. Learn more

Mickey Toogood

Mickey Toogood is a Sr. Content Marketing Manager at Amazon. He’s passionate about connecting sellers with ecommerce opportunities. He also loves books, travel, and music.