How to Dropship on Amazon

At Lillian Purge, we specialise in Ecommerce SEO Services and have developed comprehensive guidance on How to Dropship on Amazon.

Dropshipping on Amazon is a retail fulfilment method where you sell products on Amazon’s marketplace without holding any inventory. When a customer places an order, you purchase the item from a third-party supplier who ships it directly to the buyer. You handle product listings, marketing, and customer service, while the supplier manages storage and delivery.

Unlike traditional retail models, dropshipping removes the need for warehouses or bulk stock purchases, making it an attractive low-risk business model for new sellers. However, it requires careful management to meet Amazon’s strict policies and deliver a reliable experience to customers.

How dropshipping works on Amazon

Amazon allows dropshipping but only under specific conditions. Sellers must be the recorded seller of the product, meaning that all invoices, packaging, and communication must show the seller’s details rather than the supplier’s.

Here’s how the process works in practice:

1. Create a Seller Account – Choose between an Individual or Professional plan. The Professional plan, which costs around £25 per month, is ideal for businesses planning to sell regularly.

2. Find reliable suppliers – Partner with manufacturers or wholesalers that can ship orders directly to customers quickly and accurately. Many sellers use platforms such as Alibaba or private suppliers within the UK or EU.

3. List products on Amazon – Upload listings with accurate descriptions, images, and prices. Optimise your titles and keywords to improve visibility within Amazon’s search results.

4. Customer places an order – When a sale occurs, you forward the order details to your supplier for fulfilment.

5. Supplier ships directly to the customer – The supplier handles packaging and delivery, but the label and invoice must show your business name.

6. You manage communication – You remain responsible for customer service, returns, and feedback.

The key to success is ensuring your supplier meets Amazon’s performance standards for delivery time, quality, and customer satisfaction.

Amazon’s dropshipping policy

Amazon allows dropshipping only if you comply with the following rules:

• You must be the seller of record on all invoices and documentation.

• The packaging, invoices, and labels must identify you or your business, not the supplier.

• You must take responsibility for customer returns and service.

• You must remove any third-party branding or materials before shipping.

Violating these policies can result in your account being suspended or permanently banned. Using suppliers like AliExpress or similar marketplaces without ensuring compliance is risky, as many do not support seller-branded fulfilment.

Who is Amazon dropshipping for?

Dropshipping on Amazon is suitable for:

• Entrepreneurs who want to start selling online with minimal upfront investment.

• Retailers testing new product ranges before buying stock in bulk.

• Businesses looking to expand into new markets without managing logistics.

It’s less suited to sellers who want full control over product branding or packaging, since the supplier fulfils the order. Those focusing on building a unique brand may prefer Amazon FBA (Fulfilment by Amazon), which allows branding within Amazon’s storage and delivery network.

Costs of dropshipping on Amazon

While dropshipping eliminates warehouse costs, several fees still apply. Sellers should understand these before setting prices.

1. Amazon subscription fee – The Professional account costs around £25 per month. Individual sellers pay 75p per item sold.

2. Referral fees – Amazon takes a commission on each sale, typically between 8% and 15% depending on the category.

3. Fulfilment and shipping costs – Although your supplier handles shipping, you’ll pay them for packaging and delivery. This cost varies based on location and weight.

4. Advertising fees – Many sellers invest in Amazon PPC ads to increase visibility and sales.

5. Refund and return costs – If a customer returns an item, you’ll need to coordinate with your supplier and cover any return shipping or replacement expenses.

Finding the right suppliers

Choosing the right supplier is critical in Amazon dropshipping. Poor fulfilment, delayed shipping, or incorrect packaging can lead to negative reviews and account suspension. When researching suppliers:

• Check they offer white-label shipping, meaning they remove their branding.

• Ask for processing time guarantees to meet Amazon’s delivery standards.

• Order samples to verify product quality and packaging.

• Look for UK or EU-based suppliers for faster shipping and easier returns.

• Ensure clear communication about stock levels and delivery times.

Using multiple suppliers can reduce risk if one runs out of stock, but it also increases complexity in managing orders.

Listing optimisation for dropshipping success

Because competition on Amazon is intense, success depends on how well your listings perform in search. Optimise every aspect of your product page to attract clicks and conversions:

• Write clear and descriptive titles including relevant keywords.

• Use high-resolution images showing the product from different angles.

• Add detailed bullet points outlining key features and benefits.

• Craft an informative description that answers common customer questions.

• Encourage verified customer reviews to build trust.

Consistent optimisation and performance monitoring can help your listings climb Amazon’s rankings and maintain visibility.

Challenges of dropshipping on Amazon

Dropshipping on Amazon can be profitable but also challenging. Some of the most common issues include:

• Policy restrictions – Amazon has strict rules about fulfilment and seller responsibility. Non-compliance can result in suspension.

• Competition and pricing pressure – Because many sellers use similar suppliers, prices can be highly competitive.

• Quality control risks – You have limited oversight over packaging and delivery quality.

• Supplier reliability – Late shipments or stock errors can damage your seller metrics.

• Lower profit margins – After fees and supplier costs, margins can be slim unless you operate at scale.

Despite these challenges, sellers who manage their relationships carefully and prioritise customer satisfaction can achieve sustainable results.

Alternatives and complementary strategies

If you want more control or scalability, consider alternative approaches:

• Fulfilment by Amazon (FBA) – You store inventory in Amazon’s warehouses, and Amazon handles delivery, returns, and customer service.

• Shopify dropshipping – Offers more control over branding and customer data while integrating with apps like DSers or Spocket for supplier management.

• Multi-channel selling – Combine Amazon dropshipping with your own ecommerce website to diversify risk and build brand equity.

Many successful businesses start with Amazon dropshipping, then transition to holding inventory or building their own Shopify store once they understand their market.

Expert tips for success

1. Start with low-risk products – Choose items that are lightweight, non-seasonal, and easy to ship.

2. Monitor Amazon metrics – Keep your Order Defect Rate below 1% and maintain excellent feedback scores.

3. Test pricing regularly – Monitor competitors and adjust your prices to maintain profitability after all fees.

4. Automate order fulfilment – Use tools that sync inventory and orders between Amazon and your suppliers to prevent overselling.

5. Focus on customer service – Respond quickly to messages, handle returns efficiently, and build a positive reputation.

6. Stay compliant – Review Amazon’s dropshipping policies regularly to ensure your processes remain within guidelines.

Building a long-term strategy

The best approach to dropshipping on Amazon is to treat it as a stepping stone to building a brand. Use data from your sales to identify which products perform best, then invest in inventory or private labelling to increase margins and control.

Building an email list or launching your own ecommerce site alongside Amazon gives you independence and helps protect your business from platform changes. In the long run, dropshipping can serve as both a learning tool and a profitable entry point into ecommerce.

Conclusion

Dropshipping on Amazon offers an accessible way to start selling online without managing stock or logistics. By complying with Amazon’s rules, choosing reliable suppliers, and focusing on listing quality, sellers can generate consistent sales with minimal upfront investment. While margins are tighter than traditional retail, the global reach and trust of Amazon make it an excellent platform for growth when managed strategically.

We have also written in depth articles on How Much Does Amazon Charge to Sell? and How to Sell on Amazon as well as our Amazon Hub to give you further guidance.