In the ever changing world of eCommerce, the ability to innovate and adapt is what sets successful businesses apart. One such innovation that has gained traction in recent years is the concept of “Amazon 2 Step Dropshipping”. This model represents a hybrid approach, merging the simplicity of traditional dropshipping with the vast potential of the Amazon marketplace.
Traditional Dropshipping vs. Amazon 2 Step Dropshipping
For those unfamiliar with the concept, dropshipping is a retail fulfillment method where a store doesn’t actually maintain a physical inventory of the products it advertises. Instead, once a customer places an order, the store purchases the product from a third-party supplier who then ships it directly to the customer. This method eliminates the need for large upfront investments in inventory, reducing financial risk for the seller.
Amazon 2 Step Dropshipping builds on this model but introduces a twist. Instead of the traditional one-step approach where products are shipped directly from the supplier to the customer, there’s an intermediate step. Sellers source products from a variety of retailers, usually in modest batches of 5-10 items. These products are then sent to intermediary warehouses where they’re repackaged.
Once a sale is made on Amazon, the warehouse becomes responsible for fulfilling the order, typically shipping the item via USPS directly to the end customer. This minimizes and reduces risk of suspension significantly since the item is not shipped directly from the retailer but rather from a warehouse intermediary.
Advantages of Amazon 2 Step Dropshipping
There are several advantages to this method:
Control Over Packaging: By having an intermediary warehouse, sellers can ensure the product is packaged to their specifications, providing a more consistent unboxing experience for the customer.
Reduced Capital Requirement: Unlike wholesale Fulfillment By Amazon (FBA) where large quantities of products are purchased and stored in Amazon’s warehouses, the 2 Step Dropshipping method requires significantly less capital tied up in inventory at any given time. This financial flexibility can be a boon, especially for new sellers.
Improved Margins: By carefully selecting products and optimizing the process, sellers can enjoy profit margins averaging around 20%. While this might vary based on the product and competition, it’s a promising figure for those diving into this business model.
Why Amazon?
The question arises: why choose Amazon as the platform for this dropshipping method? The answer lies in the sheer magnitude of the opportunity. With a staggering user base of over 300 million active customers, Amazon is less of a marketplace and more of a global phenomenon. Sellers have an unparalleled chance to tap into this vast pool of potential buyers.
Moreover, recent data indicates the growth and dominance of third-party sellers on Amazon. Last year alone, third-party sellers, akin to those utilizing the 2 Step Dropshipping method, reported sales exceeding a whopping $200 billion. These figures not only highlight the potential for profitability but also underscore the trust and reach that Amazon provides to its sellers.
Final Analysis
Amazon 2 Step Dropshipping offers a fresh perspective on a time-tested business model. By leveraging the vast customer base of Amazon and integrating the advantages of an intermediary warehouse, sellers can achieve greater control, flexibility, and profitability. In a marketplace that thrives on innovation, this method stands out as a promising avenue for both new and seasoned sellers to explore and prosper.
To get started with Amazon 2 Step Dropshipping Automation, contact us here at Elite Automation.
