- Hey guys Neil Waterhouse.
In this video I want to explain how to set up yourself
to dropship on Amazon for the long term.
Just for the newbies out there, dropshipping on Amazon
means listing items on Amazon before you purchase them
and then after the items sell and you get paid,
you then purchase them from your suppliers.
And your suppliers ship the items direct to your customers.
In other words dropshipping is a
cash flow positive strategy,
you never need to see, touch or ship the product yourself.
And you also don't need to
pre-purchase inventory before you've sold it.
You only purchase the inventory after it's sold.
Okay, my first rule to dropshipping on Amazon
is to never use overseas suppliers
like AliExpress, Banggood, et cetera
as when the items arrive late,
your Amazon listings get defects and bad reviews.
Yes I know I'll get a lot of flak for saying this
because there are so many people out there
saying to use AliExpress and other overseas suppliers
you know, if you're Amazon, eBay dropship business.
But the reality is, I've been dropshipping for over 30 years
and selling online for over 20 years
I'm also the founder and host of the four largest
eBay and Amazon meet-up groups in Australia
and also the creator of Dropship Formula
so I get to see the sellers who are making the most money
and I also get to see sellers
who have been around the longest
and get the least amount of defects and negative feedback.
Using overseas suppliers like AliExpress
can give you some quick money, you know,
and you can sometimes get away
with selling overseas items on your own independent website,
you know, like a Shopify store,
but if you're in this for the long haul,
dropshipping on Amazon and eBay, you know,
I highly recommend you only use suppliers
which meet the following five criteria.
Now number one, only use suppliers which are based
in the country you are building your business for.
Now just because you live in Canda, Australia, UK, USA
or wherever does not mean you've got to build
that dropship business in that country.
You know, dropship business are online,
so you can build them in almost any country
that Amazon or eBay are located.
The last time I checked eBay was located in 27 countries
and Amazon was in 30.
Now we've built this business in USA, Australia, Canada,
Ireland, UK, Spain, et cetera and you can,
you know, you can do the same as well.
You can also build multiple dropship businesses
in multiple countries.
And you can also sell them as a capital sale
which I've talked about before but that's for another video.
Now the second criteria for suppliers is,
they must be able to dispatch within two business days.
Don't use suppliers that cannot dispatch
within two business days,
'cause you know, buyers don't like to wait
for what they've purchased, you know,
a buyer may have taken six months
to finally make up their mind to buy something,
but once they've decided they want it quickly.
Now the third criteria for suppliers
is a supplier must have what we call a dynamic website.
And that's a website which shows
whether or not the supplier has the item in stock.
You know, obviously when you list a dropship item
on Amazon, eBay or your own website,
you need to make sure the item is available at all times.
The great part here, is as long as the supplier
has a dynamic website, we can automate the process
of making inventory go to zero on your listing
if your supplier runs out of stock.
Now this of course is to stop overselling an item.
Now the fourth criteria for your supplier,
is the supplier must be able to ship items with no invoice.
Obviously if you've sold an item, you know, on,
whether it's Amazon, eBay or your own website
for say 500 dollars, you have to make sure
the supplier doesn't put an invoice in the box
for say 300 dollars made out to yourself.
Now the fifth criteria for your supplier
is they must be able to box the items
without putting them in some well-known retailer box
i.e. Kmart or Target et cetera.
You know, if an item turns up to your customer
in a box that's say got Kmart written on the side of it
this creates what's know in the industry as buy confusion
i.e. you can, you customer purchases an item from you
on eBay, Amazon or your own website
and then the item rocks up in a Kmart box.
So, you know, you might be thinking how do I find out
if my suppliers meet these five criteria,
the first thing is don't ring them up
and say hey do you dropship
because that just creates a whole load more confusion
'cause a lot of people, suppliers don't even know
what the word dropship is.
Is simply, to find out, you need to either call them,
email mail them, or live chat them if they have live chat
and you only ask those questions.
You've only got to do this once for each new supplier
before you put any new dropship supplier
on your supplier list.
Now just take a quick step back
to AliExpress and other overseas suppliers,
you can get away with using AliEpxress
and other overseas suppliers
for your own independent website i.e. Shopify store
but you know, that's a whole different video.
You know, as a pros and cons of a Shopify store is
you know, it's reasonably quick to set up a Shopify store
but the downside is you have to put in place
a methodology to drive traffic to your store.
This can be Facebook Paid Advertising,
or Google Product Listing Ads or they're also known as PLA
which you know is obviously short for Product Listing Ads.
You know, and that's kind of what
they're known in the industry.
But the down side of this type of advertising is,
it takes a fair whack of time to learn it
and it costs money to advertise on these platforms.
Yes you can do you know, SEO and all that kind of,
but you know, but that's another story
you know and people think oh SEO is free, no it's not,
you know, we'll get to that in another video.
But bottom line, you know, about dropshipping on Amazon,
if you're in it for the long term, only use suppliers
which meet the five criteria above.
That's all for this week.
No matter where you're watching this,
please scroll down and leave me a comment below.
Until next week, list more, sell more.
This is Neil Waterhouse.