How to Earn Money with Amazon Dropshipping: A Beginner’s Guide

Last Updated on May 29, 2025 2:20:03 PM by Vivek Makwana

In today’s digital world, online businesses have become more accessible than ever. One such model gaining popularity is Amazon Dropshipping. It offers an easy way to earn money without managing inventory or shipping products yourself. If you’re a beginner wondering how to start, this comprehensive guide will walk you through the entire process of earning from Amazon Dropshipping.

What is Amazon Dropshipping?

Amazon Dropshipping is a business model where you list products on Amazon without actually stocking them. When a customer places an order, you purchase the product from a third-party supplier (like a wholesaler or manufacturer), who ships it directly to the customer. You never touch the product, yet you earn a profit from the price difference.

For example, if you list a product for Rs1,500 and your supplier sells it for Rs1,000, you earn Rs500 profit per sale.

Is Amazon Dropshipping Legal?

Yes, Amazon Dropshipping is legal, but you must follow Amazon’s dropshipping policy. The key points include:

• You must be the seller of record.
• Your name or business must appear on all invoices, packaging, and shipment slips.
• You must take responsibility for returns and customer service.

Violating these rules can get your Amazon seller account suspended. Always stay updated with Amazon’s latest policies.

Why Choose Amazon Dropshipping?

There are many reasons why people start with Amazon Dropshipping:

1. Low Investment: You don’t need to buy products in bulk.
2. No Inventory Management: Your supplier handles storage and shipping.
3. Global Reach: Amazon gives you access to millions of customers worldwide.
4. Passive Income Potential: Once set up, you can earn even while you sleep.

Step-by-Step Guide to Start Amazon Dropshipping

Here is a beginner-friendly step-by-step process to start earning from Amazon Dropshipping:

1. Set Up an Amazon Seller Account

Go to Amazon Seller Central and create a professional seller account. A professional plan is required for dropshipping and costs around $39.99/month (in the US).

🛒 Amazon Seller Central India: Plans & Fees

1.1 Selling Plans

• Individual Plan: No monthly subscription fee. You pay a per-item fee of Rs3 per sale. Suitable for sellers with low volume.
• Professional Plan: Rs499/month subscription fee. Recommended for high-volume sellers.

1.2 Referral Fees

Amazon charges a referral fee as a percentage of the total sales price, varying by category. For example, in the Electronics category, the referral fee is 5%, while in the Clothing category, it’s 15%.

1.3 FBA (Fulfillment by Amazon) Fees

If you choose to use Amazon’s fulfillment services, you’ll incur FBA fees, including:

• Storage Fees: Charged monthly based on the volume of your products stored in Amazon’s warehouse.
• Fulfillment Fees: Cover the picking, packing, and shipping of your products.

These fees vary depending on the size and weight of your products.

1.4 Dropshipping Policy

Amazon allows dropshipping, but you must:

• Be the seller of record for your products.
• Ensure that your name appears on all packing slips and invoices.
• Comply with all Amazon policies and local laws.

Make sure to provide correct business information like:

• Business name
• Bank account
• GST (for India)
• Identity proof

2. Choose a Profitable Niche

Picking the right niche is key to success in Amazon Dropshipping. You want a niche with:

• High demand
• Low to medium competition
• Reasonable profit margins

Popular niches include home improvement, gadgets, fitness gear, and pet accessories. Use tools like Google Trends, Helium 10, or Jungle Scout to research demand and competition.

3. Find Reliable Suppliers

Your supplier is the backbone of your dropshipping business. You can find suppliers on:

• AliExpress
• Alibaba
• Spocket
• SaleHoo
• Worldwide Brands

Look for suppliers who:

• Offer fast and reliable shipping
• Have good reviews and ratings
• Allow custom branding if needed
• Provide tracking and return options

Note: For Amazon Dropshipping, it’s better to find suppliers who ship from the same region where your customers are located to reduce delivery time.

4. List Products on Amazon

Once you have your supplier and niche, it’s time to list your products on Amazon. Optimize your listings with:

• Keyword-rich titles
• High-quality images
• Detailed descriptions
• Competitive pricing

Use Amazon SEO techniques to help your products appear higher in search results. The main keyword here is “Amazon Dropshipping,” so make sure it appears naturally in your product descriptions and backend keywords.

5. Manage Orders and Customer Service

When a customer places an order:

1. You purchase the product from your supplier.
2. Enter the customer’s shipping address.
3. Supplier ships the product directly.

Make sure to send shipping updates and tracking information to your customer through your Amazon dashboard. Good customer service leads to better reviews and more sales.

6. Track Your Profits and Optimize

Use Amazon Seller Central reports or tools like Shopify, Zoho Inventory, or Sellbrite to track your profits and performance.

Look at:

• Best-selling products
• Profit margins
• Customer reviews
• Return rates

Based on this data, optimize your listings, remove underperforming items, and add more high-converting products.

Tips for Success in Amazon Dropshipping

Here are some valuable tips for beginners:

1. Start Small: Test with 5-10 products first to see what works.
2. Focus on Quality: Never sell low-quality or fake items—it can ruin your seller rating.
3. Stay Compliant: Follow Amazon’s dropshipping and return policies strictly.
4. Use Automation Tools: Tools like AutoDS or DSers can automate inventory updates and order placements.
5. Respond Quickly: Always respond to customer queries within 24 hours.

Common Mistakes to Avoid

1. Choosing the Wrong Supplier: Leads to delayed shipping and bad reviews.
2. Ignoring Amazon Policies: Can get your account banned.
3. Poor Pricing Strategy: Low margins mean little to no profit.
4. No Branding: Customers prefer branded experiences—try to use custom packaging if possible.
5. Not Doing Market Research: Without data, you’ll waste time on products that don’t sell.

How Much Can You Earn from Amazon Dropshipping?

Earnings from Amazon Dropshipping depend on:

• The number of products listed
• Your profit margin (average is 10–30%)
• Your ability to optimize listings
• Demand for your niche

Many dropshippers earn Rs30,000 to Rs1,00,000+ per month within 3–6 months of consistent effort. Top sellers can scale to 6 or even 7 figures annually.

Is Amazon Dropshipping Worth It?

If you’re looking for a low-risk, low-investment way to start an online business, then Amazon Dropshipping is definitely worth considering. It does require time, effort, and strategy, but the rewards can be significant.

With the right approach and tools, even beginners can build a sustainable source of income through this model.

Final Thoughts

Amazon Dropshipping is a beginner-friendly way to start earning money online without managing stock or shipping. With minimal investment, smart planning, and the right tools, anyone can start a successful dropshipping business on Amazon.

Remember, success won’t happen overnight. But if you stay consistent, follow the rules, and focus on delivering value, you can turn this side hustle into a full-time income stream.

Ready to start your Amazon Dropshipping journey?
Take the first step today—set up your Amazon seller account, research your niche, and begin your path to earning online.

Frequently Asked Questions (FAQs)

Q1: What is Amazon Dropshipping?
A: Amazon Dropshipping is a business model where you list products for sale on Amazon, but a third-party supplier stores, packs, and ships the products directly to customers. You never hold inventory yourself.

Q2: Is Amazon Dropshipping legal?
A: Yes, Amazon Dropshipping is legal as long as you follow Amazon’s dropshipping policy. You must be the seller of record and ensure that packing slips, invoices, and other documents identify you (not the third-party supplier).

Q3: Do I need a GST number for Amazon Dropshipping in India?
A: Yes, if you plan to sell on Amazon.in, a GST number is typically required to register as a seller and comply with tax regulations.

Q4: How much money do I need to start Amazon Dropshipping?
A: You can start with a low budget, often under Rs10,000–Rs20,000. Initial costs include your Amazon seller subscription, product listing tools, and small marketing expenses.

Q5: Can I use AliExpress for Amazon Dropshipping?
A: Technically yes, but be cautious. Long shipping times from AliExpress can lead to negative reviews. It’s better to work with suppliers who can deliver quickly, ideally from local warehouses.

Q6: How do I find winning products for Amazon Dropshipping?
A: Use tools like Helium 10, Jungle Scout, or Google Trends. Look for products with high demand, low competition, and good profit margins.

Q7: How much can I earn from Amazon Dropshipping?
A: Earnings vary. Beginners can earn Rs30,000 to Rs1,00,000+ per month, depending on product selection, pricing, and marketing strategy. Some advanced sellers scale to 6-figure incomes.

Q8: Can I automate Amazon Dropshipping?
A: Yes, automation tools like AutoDS, DSers, or inventory management software can help streamline order fulfillment, pricing, and tracking.

Q9: What happens if a customer wants to return a product?
A: You are responsible for handling returns. Coordinate with your supplier to manage the return or refund process. Ensure your return policy complies with Amazon’s rules.

Q10: Is Amazon Dropshipping a passive income source?
A: It can become semi-passive once automated, but you will still need to monitor orders, customer service, and supplier performance regularly.

Q11: What are the essential steps to start dropshipping on Amazon?
A: To begin dropshipping on Amazon:

1. Set Up an Amazon Seller Account: Register for a Professional selling plan to access necessary tools and dashboards.
2. Find a Reliable Dropshipping Supplier: Ensure the supplier can fulfill orders promptly and complies with Amazon’s policies.
3. List Products and Manage Orders: Create product listings, monitor orders, and utilize Amazon’s resources to grow sales.

Q12: Can I combine dropshipping with Fulfillment by Amazon (FBA)?
A: Yes, sellers often use a hybrid approach:

• FBA: Ideal for fast-moving products, leveraging Amazon’s logistics for storage, packing, and shipping.
• Dropshipping: Suitable for slower-moving items, reducing storage costs and risks associated with unsold inventory.

Q13: What are Amazon’s requirements for dropshipping?
A: To comply with Amazon’s dropshipping policy:

• You must be the seller of record.
• Your name should appear on all packing slips, invoices, and external packaging.
• Remove any third-party identifiers from shipments.
• Be responsible for accepting and processing customer returns.

Q14: How can I ensure my dropshipping supplier is reliable?
A: When selecting a supplier:

• Request proof of authorization to sell branded products.
• Ask for previous shipment histories, especially if they’ve worked with Amazon sellers.
• Ensure they can handle returns and customer service in line with Amazon’s standards.

Q15: What are some best practices for successful dropshipping on Amazon?
A: To enhance your dropshipping business:

• Product Selection: Choose products with consistent demand and manageable shipping requirements.
• Customer Service: Develop a plan to handle inquiries, returns, and refunds efficiently.
• Account Security: Never grant your supplier access to your Amazon Seller Central account to maintain control and security.

Q16: Are there any tools to help identify profitable products for dropshipping?
A: Yes, Amazon offers the Product Opportunity Explorer, which helps sellers identify high-demand, low-competition products by analyzing sales trends across categories.

Q17: How do I calculate potential profits in dropshipping?
A: Utilize Amazon’s Revenue Calculator to estimate fees, fulfillment costs, and potential profits for different products and fulfillment methods. This tool aids in making informed pricing and sourcing decisions.

Q18: What are common pitfalls to avoid in Amazon dropshipping?
A: Be cautious of:

• Unreliable Suppliers: Delays and poor service can harm your seller rating.
• Policy Violations: Non-compliance with Amazon’s dropshipping policy can lead to account suspension.
• Poor Product Choices: Selling perishable or hazardous items can complicate fulfillment and returns.

Disclaimer

The information provided in this article is for educational and informational purposes only. While we aim to offer accurate and up-to-date guidance on Amazon Dropshipping, we do not guarantee any specific results or earnings. Success in dropshipping depends on various factors including market trends, supplier reliability, individual effort, and adherence to Amazon’s policies.

Readers are advised to conduct their own research and, if necessary, consult with a professional before starting an Amazon Dropshipping business. We are not affiliated with Amazon.com, Inc. or any of its subsidiaries, and all trademarks mentioned belong to their respective owners.