How to Make an Extra $2,000 to $5,000 Per Month with a Simple Amazon Dropshipping Business
Amazon dropshipping is a hybrid business model combining elements of two popular e-commerce strategies—Amazon FBA (Fulfilled by Amazon) and Shopify dropshipping. However, unlike traditional models, Amazon dropshipping allows you to run your business without the need for ads, bulk orders, or dealing with foreign suppliers. This simple yet powerful method allows you to tap into the vast Amazon marketplace, giving you access to sell products to over 2 billion users each month.
The concept behind Amazon dropshipping is simple: you find a supplier who has inventory, list their products at a higher price on Amazon, and when a customer buys the product, you forward the order to the supplier. The supplier ships the product directly to the customer without any indication of your involvement. This model guarantees that you will only spend money when you make a sale, so there’s minimal risk, and you can scale quickly with the right product research and supplier management.
Key Takeaways
Amazon dropshipping is a low-risk, high-reward business model.
It combines elements of both Amazon FBA and Shopify dropshipping.
The model doesn’t require upfront investment in bulk inventory or the need for paid ads.
Success depends heavily on finding the right suppliers and conducting thorough product research.
You can make significant profits by focusing on product sourcing and identifying high-demand, profitable items.
Table of Contents
Introduction
Key Takeaways
How Amazon Dropshipping Works
Benefits of Amazon Dropshipping
How to Start Your Amazon Dropshipping Business
Setting Up Your Amazon Seller Account
Finding Reliable, Drop-Ship Friendly Suppliers
Product Research: The Key to Success
The 3:1 Method for Finding Profitable Products
Tips for Scaling Your Amazon Dropshipping Business
Frequently Asked Questions
Final Thoughts
How Amazon Dropshipping Works
The Amazon dropshipping business model is incredibly straightforward. Essentially, you’re acting as a middleman between a supplier and an end customer. Here’s a breakdown of how it works:
Find a Supplier: You begin by finding a supplier who has a product you’d like to sell. You list that product on Amazon at a markup.
List on Amazon: Once you’ve found the product, you’ll list it on Amazon. You set your price, which will be higher than the cost from the supplier. For example, if a supplier’s price is $50, you might list it for $100.
When the Product Sells: Once a customer makes a purchase on Amazon, you’re responsible for sending their shipping details to the supplier.
Supplier Ships Directly: The supplier takes care of everything from there, sending the product directly to the customer without any branding or receipts from them, maintaining your anonymity.
Profit: After the sale, you keep the difference between what the customer paid and the supplier’s cost (minus Amazon’s fees).
What’s great about this business model is that you never purchase inventory upfront. You only pay for products once you’ve made a sale, ensuring that your investment is always protected.
Benefits of Amazon Dropshipping
Low Start-Up Costs: You don’t need to buy products in bulk or manage inventory, which drastically reduces the initial investment compared to traditional e-commerce models.
No Need for Ads: Unlike other business models that require spending on advertising, Amazon’s massive customer base provides built-in traffic for your listings.
Minimal Risk: Since you only purchase products after a sale is made, there’s minimal risk. If a product doesn’t sell, you lose nothing.
Simplicity: You don’t have to deal with complicated logistics or suppliers in foreign countries. The model is simple to implement and maintain.
Access to a Global Market: Amazon is a global platform, meaning you can sell to millions of customers without worrying about international shipping challenges.
How to Start Your Amazon Dropshipping Business
Setting Up Your Amazon Seller Account
To begin, you need to set up your Amazon Seller account. Here’s how:
Go to Amazon’s Seller Registration Page: Head to the Amazon Seller page and choose the marketplace you wish to sell in (U.S., U.K., Canada, etc.).
Provide Your Information: You’ll need to provide some personal information, including your government-issued ID (like a driver’s license or passport) and banking statements.
Pay the Monthly Fee: Selling on Amazon costs approximately $29 USD per month, which grants you access to over 2 billion potential customers.
Once your account is set up, you’re ready to begin listing products.
Finding Reliable, Drop-Ship Friendly Suppliers
Not all suppliers are suitable for dropshipping. When selecting a supplier, make sure they meet two key criteria:
Blind Shipping: The supplier must ship products directly to the customer without revealing their name or brand, ensuring that customers have no idea that the product came from another seller.
No Invoices or Receipts: The supplier should never include invoices or receipts inside the product packaging. This keeps your margins intact and maintains a professional customer experience.
It’s crucial to source your products from suppliers who understand and accommodate the dropshipping model.
Product Research: The Key to Success
The next step is to find profitable products to sell. Product research is where the magic happens. Without the right products, your Amazon dropshipping business will struggle. You need to know how to pick the winners from the sea of inventory available to you.
The 3:1 Method for Finding Profitable Products
To find the best products, you need to use a specific method. I call this the 3:1 Method, and it’s a strategy I developed to help me consistently identify products that will sell well.
Research Product Criteria: Look for products that fit specific criteria—demand, price, and competition. For example, the product should be something people are actively searching for, with reasonable competition.
Evaluate Profit Margins: Make sure the price difference between what you sell the product for and what you pay the supplier allows for a reasonable profit.
Assess Sales Volume: You need to know how frequently a product is selling. The goal is to find products that are in demand but not overly saturated by competitors.
Spend 90% of your time on product research. It’s where you’ll find the items that will generate consistent sales, and it’s key to building a successful dropshipping business on Amazon.
Tips for Scaling Your Amazon Dropshipping Business
Once you’ve found your winning products, it’s time to scale your business. Here’s how:
Automate as Much as Possible: Use tools to streamline your business, from listing products to tracking orders. Automating tasks will help you focus on growing your business.
Optimize Your Listings: Ensure your product listings are clear, accurate, and SEO-optimized so they appear in Amazon search results and attract the right customers.
Expand Your Product Range: Once you’ve mastered one product, start expanding your offerings. Continuously research new, profitable products to add to your store.
Reinvest Profits: Don’t take all your profits out right away. Reinvest them into new product research, better suppliers, and tools to automate and scale your business even faster.
Frequently Asked Questions
Do I need to run ads for my Amazon dropshipping business? No. One of the greatest advantages of Amazon dropshipping is that you don’t need to rely on ads. Amazon’s marketplace is already vast, and your products are exposed to millions of customers, so ads are not necessary to make sales.
How do I find reliable suppliers? The best way to find reliable suppliers is through platforms like SaleHoo or Spocket, where you can filter for suppliers who offer dropshipping services and have fast shipping times.
Can I start this business with no experience? Yes! One of the best things about Amazon dropshipping is that you don’t need prior experience in e-commerce or sales. The model is straightforward, and as long as you focus on finding the right suppliers and products, you can succeed.
Final Thoughts
Starting an Amazon dropshipping business in 2024 is one of the most straightforward ways to make an additional $2,000 to $5,000 per month. With minimal risk and no need for upfront investment in inventory, it’s an ideal way to get started in e-commerce without the challenges associated with other business models.
Remember, success in this business comes down to product research and choosing the right suppliers. Use the 3:1 Method to evaluate potential products and stay focused on finding high-demand items that will give you a consistent income.
Now, it’s time to take action and start building your Amazon dropshipping business.
If you're ready to take your Amazon dropshipping journey to the next level, be sure to follow me on Facebook, Instagram, and YouTube for more tips and strategies. And don’t miss out on my exclusive mentorship program—sign up today to receive personalized guidance and advanced tactics to accelerate your success!
