New Dropshipping Strategy That Complies With Amazon’s Policy
Download Amazon Seller Guide
This guide will help you get started, understand the basics of Amazon selling, and explain in simple words how it all works.
Dropshipping is a business model where the seller lists a product online, gets an order from the buyer, and asks the supplier to ship it to the shopper directly.
On Amazon, dropshipping is accepted with specific limitations. You can dropship your orders as long as you are a product’s seller of record and all packing slips, invoices, and other information identify you as that item’s seller.
Lately, Amazon has tightened requirements for sellers who fail to comply with their dropshipping policy and implemented a massive ban on non-compliant dropshipping accounts. Luckily, there is a solution to that.
Keep reading to find out how to sell dropshipping products on Amazon and comply with the dropshipping guidelines to avoid account bans.
How Does Dropshipping Work On Amazon?
Dropshipping is a business model where the seller lists a product on Amazon, gets an order from the buyer, and asks the supplier to ship it to the shopper directly.
The profit margin comes from the difference between the lower supplier's price and the higher price of a dropshipper.
However, Amazon allows sellers to fulfill orders with straightforward dropshipping only if they are identified as sellers of record for their products.
If merchants fail to comply with Amazon’s dropshipping policy, it will result in a seller account ban.
Related: Amazon FBA vs Dropshipping: which model to choose for a successful business
FBA vs FBM: Which is Better for Amazon Sellers in 2023?
What is Amazon's dropshipping policy?
Amazon doesn’t allow a third party to fulfill orders to the buyers on behalf of merchants unless it is clear that they are the products’ sellers of record.
Related: How to start Amazon Dropshipping business?
How To Sell On Amazon Without Inventory?
Amazon’s requirements for the dropshippers
- dropshippers must be the sellers of record for products;
- they must indicate that they are product sellers on packing slips, invoices, and other product information;
- they must remove all data that relates to the third-party seller before fulfilling the order;
- they must process customer returns.
Related: Online Arbitrage vs Dropshipping: Which Business Model Is Best For You?
Amazon Seller Compliance Documents
Dropshipping policy violations on Amazon
Amazon considers that you violated their dropshipping policies if:
- you purchase products from another online retailer, let them ship those products directly to customers, and the shipment does not identify you as the seller of record;
- if anyone other than you (including the other online retailer) appears on packing slips, invoices, or external packaging.
Related: Amazon Wholesale: All You Need To Know
2024 Important Dates Amazon FBA: Key Dates for Amazon Sellers
Example. If you find a cheaper-priced product on Target and list it on Amazon, it’s strictly forbidden to have Target send it directly to the shopper with Target’s packing slips and the external packaging.
Amazon explains that if a customer sees packaging, invoices, or receipts identifying a seller that doesn’t belong to Amazon, that creates confusion for the shopper. In such a case, the buyer is confused about how their order is being fulfilled and whom they should contact with any problems or questions.
Amazon can remove your selling privileges if you fail to observe their dropshipping policy.
Related: Amazon FBA Fees
Tightened Regulations For Dropshipping Sales On Amazon
Lastly, Amazon introduced stringent requirements for dropshippers. Since September 2022, sellers engaged in dropshipping repost mass account bans.
Amazon has tightened requirements for dropshippers due to a lot of fraud related to order tracking.
If you are involved in straightforward dropshipping, most of the time, you are at risk of a seller account ban because of Amazon’s limitations to this business model.
Related: Amazon Seller Central: Complete Guide
5 Strategies To Increase Amazon FBA Sales
How To Avoid Amazon Dropshipping Account Ban?
In the situation described above, the only way out for dropshippers is to find a solution allowing them to comply with Amazon's dropshipping policy.
There is a new strategy offering such a possibility.
The idea is to send your dropshipping products to a prep center that removes all signs of the third-party seller and repackages them in your name.
This way, you ensure the products identify you as a seller and all products are fulfilled from one address.
Related: Amazon FBA Selling Tips for 2024
How Does Amazon FBA Work. Is Amazon FBA worth it?
This strategy reduces the risk of an account ban, but it comes with a price tag. The cost of prep center services can reach $7-8 per unit.
Therefore, to keep your profitability level acceptable, you must resell products with a high-profit margin.
Typically, these are the items currently unavailable and out of stock with no sellers on the listing. Since there’s no competition in such products, you can get a good Best Selles Rank and set more expensive pricing. Also, you can resell products in expensive categories.
Therefore, your task will be to find such products.
Related: 7 Amazon Product Research Tactics You Need in 2024
13 Ways to Make Money on Amazon in 2023
How To Quickly Determine The Number Of Sellers On The Listing?
You can use seller tools to quickly determine the number of sellers on the listing. Seller Assistant App product research extension shows all product data right on the Amazon product page.
Seller Assistant App’s Sales and Profit Estimator helps determine how many FBA merchants sell a product and estimate its potential sales. FBA and FBM columns in Seller Assistant App’s Product Information dashboard show the number of FBA and FBM sellers that sell items in the “New” condition.
It also estimates sales velocity and calculates potential profit based on competitors' number, types, and prices.
In addition, Seller Assistant App’s FBA & FBM calculator lets you quickly calculate all essential product metrics. The extension calculates ROI and Profit Margin, considering Cost of Goods, sales tax on Cost of Goods, Amazon referral fee, FBA fee, VAT, monthly storage cost, and third-party logistics cost (shipping costs and preparation expenses, including extra costs on fragile products).
Related: 13 Rules of OA Product Research Tested by Pain and Gain of Amazon Seller
Amazon Online Arbitrage: How to Make Money
Amazon Seller Central vs. Vendor Central: All You Need To Know
Final Thoughts
On Amazon, dropshipping is accepted with specific limitations. You can dropship your orders as long as you are a product’s seller of record and all packing slips, invoices, and other information identify you as that item’s seller.
Lately, Amazon has tightened requirements for sellers who fail to comply with their dropshipping policy and implemented a massive ban on non-compliant dropshipping accounts. Luckily, there is a solution to that.
There is a new strategy whereby you send your dropshipping products to a prep center that removes all signs of the third-party seller and repackages them in your name. This strategy reduces the risk of an account ban but comes with a price tag. To keep your profitability level acceptable, you must resell products with a high-profit margin. Typically, these are the items currently unavailable and out of stock with no sellers on the listing. Therefore, your task will be to find such products.
Seller Assistant App can help you quickly identify such products. It is a popular new-generation tool that can help not only calculate Amazon FBA fees but also with overall product research. It offers an impressive portfolio of valuable and handy features. It allows Amazon sellers to perform advanced product analysis and sales estimations.
Related: 5 Steps to Grow Your Amazon Online Arbitrage Business
How to Conduct Amazon Product Research in 2024
Seller Assistant App is equally helpful for FBA beginners and Amazon professionals. It’s a must-have tool for all sellers engaged in product research.
Seller Assistant Аpp is an all-in-one extension incorporating features vital for product research. Advanced IP Alerts can immediately tell you if a product has any sales restrictions or has led to problems with account health in the past. It combines an FBM&FBA profit calculator, Quick View, Stock Checker, and Restrictions Checker in one tool.
