Dropshipping on Amazon is a business model where you sell physical products on Amazon without having to deal with inventory, shipping, handling.
Basically, Amazon and your supplier/wholesaler/distributor/manufacturer handle all of the heavy liftings for you. When you make a sale on Amazon, you simply notify your dropshipper and they ship your products directly to the Amazon customer on your behalf.
You don’t touch a single product in the process, there’s almost zero upfront cost outside of signing up for an Amazon account and you don’t have to buy any inventory whatsoever until the item has been sold.
The low-risk aspect of dropshipping on Amazon makes it a good business model , anyone can do it and you don’t have to be a tech guru to start.
Is Amazon Dropshipping Free?
Amazon dropshipping business is free because you don’t have to pay your supplier until you make a sale, you don’t need any advance money for inventory.
When you dropship on Amazon, you must abide by Amazon’s strict code of conduct. If you consistently violate any of the following rules, your seller center would be subject to a suspension.
- Order Defect Rate Must Be Less Than 1%: The total number of orders shipped with defects must be less than 1%. An item is considered defective if it receives negative feedback from verified buyers. As soon as your ODR (order defect rate) exceeds 1%, your account will likely get suspended.
- Cancellation Rate Must Be Less Than 2.5% – If an order is canceled either by you or the customer before a shipping confirmation is issued. If the frequency of cancellations exceeds 2.5%, you risk getting suspended. This commonly occurs if customers order is more than what your supplier has presently in stock.
- Late Shipment Rate Must Be Less Than 4% – If your dropship supplier persistently ships products out late, you risk getting your Amazon account suspended.
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