Why DropShipping on Amazon Is 1 bad Idea

Why DropShipping on Amazon has changed.

Dropshipping on Amazon is still a good option provided you follow the rules. Smaller suppliers will see some big changes to dropshipping their products on Amazon and may have to move to Amazon Central.

First, the purge of suppliers started over 12 mths ago.

And recently, the slashing of commissions for affiliates.

Now it is the turn of the drop shippers to undergo some sort of punishment.

If you have been involved in e-commerce for some time, you may remember the eBay purge of a few years ago, when it removed thousands of sellers from its platform.

eBay was clamping down on sellers who were recalcitrant in giving refunds.

Many sellers claimed, all they were doing was going through a dispute process.

This purge by Amazon is a clamp down on some of the selling practices adopted by some drop shippers, as you will see in the video below.

The Purge of Suppliers.

This has nothing to do with Covid -19.

Amazon began this purge at the beginning of 2019.

It is more to do with money than anything else.

When suppliers sold to Amazon, they were paid upfront.

In March 2019 Amazon halted large numbers of wholesale orders it had made.

The consensus is that…

The retail giant is encouraging those affected to sell their wares through its marketplace, which will almost certainly be a costlier and riskier proposition for most.

To produce those sales, suppliers will have to bear all of the costs associated with marketplace selling – to fulfillment by Amazon, plus warehousing fees, and advertising.

According to Patricio Robles of Econsultancy

Eventually, it’s conceivable that Amazon could carry relatively little merchandise that it sells directly to consumers, save for a growing number of higher-margin Private Label Brands.

From Bloomberg..

It’s expected that small-time vendors (companies selling their goods directly to Amazon on a wholesale basis) will have to make the switch from using the Vendor Central platform to the Seller Central platform.

Next the Purge of the Affiliates…

In 2018 – 2019 Amazon had $280.52 Billion in sales. Most of it was driven by its online platform.

With over 1 million affiliates Amazon is primarily an affiliate-driven shopping platform.

Unless you were getting your pages in the first 10 results of a google search, you never had much show of selling much, if anything.

I always had a problem with the 24hr cookie though, and still don’t have any affiliation with Amazon.

Commission rates that were between 4 and 10% are now 1 – 3%.

If you have affiliate pages for Amazon products already operating, it is simply a case of hanging on to them. If they are big-ticket items, you will still make money.

A list of rates and some commentary can be seen here.

If you are thinking of becoming an affiliate marketer there are plenty of good options still out there for you, once you know what you’re doing.

Why DropShipping on Amazon Is 1 bad Idea

Now. It’s the Dropshipper’s Turn.

From the page of AmazonSellers Lawyer

It seems like Amazon is continuously going to crack down harder and harder on anybody they feel is violating their drop shipping policy.

Amazon Sellers’ News: Sellers are continuing to be suspended for drop-shipping directly from places like Sam’s Club or Walmart directly to customers

As Jungle Scout.com clearly shows in the video (below).

Is DropShipping on Amazon Dead?

No, there will always be a platform for sellers on Amazon. And their dropship lifestyle will continue.

There are other Platforms and Places to peddle your craft.

If you are an Amazon drop shipper, it becomes a whole new ball game (for some).

It is best not to rely on just one platform though. It costs nothing to list on eBay and other sites, and you don’t pay anything until you sell.

Many using eBay have put up with their twists and turns over the years, but still, list there, and are satisfied with their return. Well, some still complain.

I think the louder they complain the more they like it, otherwise, they would stop listing there… you would think.

Other Drop Ship Options

How about Walmart?

No setup or maintenance fees and sellers pay a fee of 8 – 20% on sold items.

Unlike eBay, it is a fixed-price platform.

A list of alternatives is below.

Why DropShipping on Amazon Is 1 bad Idea
Courtesy of Salehoo

Setting up Your Own Dropship Store.

This should be a carefully considered option. It will have set-up costs, usually a monthly plan, plus percentages for hosting, fees for transactions, and extras for any apps you sign up for.

The profits to be earnt are substantial, and you are not dependent on the whims of your landlord, someone at Amazon, or eBay wanting to change tact, right at that point where everything you have set up is working for you.

Some other reasons to consider doing this.

  • For building your brand.
  • Building your own store
  • Selling at prices set by you.

The traffic will not be as heavy as the big platforms, but once your store is set up, it will not take much to get traffic to your products.

Shopify, Wix, Magneto, and Big E-Commerce are popular. Really we are spoilt for choice.

A detailed review here by Merchant Maverick

It all costs money but what business start-up doesn’t?

If you want to learn how to set up your own Woo-Commerce store try… This Link

Back to the subject…

Dropship Apps?

I can’t think of one I would recommend to a supplier wanting to dropship his own product that would be of any use.

Spocket lets manufacturers add products but be 100% certain before you commit.

Does Salehoo still play a role in the Dropship Space.

Short answer is Yes.

A big role.

With more than 8,000 suppliers, all vetted as genuine manufactures or wholesalers Salehoo is here to see that you have great back up and that everything around their platform is above board.

Click Here to be taken to Salehoo’s information page


Salehoo took a bit of a hit last year with Amazon moving the goal posts.

Still they are a reputable company, having been in the e-commerce space nearly as long as eBay.

I have no problem recommending them.


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