Dropshipping is one of the remedies that stands out as all business goes to the web, and entrepreneurs look for new ways to break even.
Wannabe entrepreneurs can now start their web-only businesses without fretting about storing or purchasing inventory upfront.
In other words, the amount you need to start and run a business has reduced significantly.
But a good “Amazon” branding doesn’t come for free. A business must act in compliance and incur some costs as we are about to discover.
What Fees & terms Apply?
Amazon dropshipping fees depend on what you sell and how many products (per month). Fees are split into two plans; (1) the individual plan & (2) the professional plan.
For the Individual Plan, you pay .99 cents/product sold + fees. This pan is best for companies that sell below 40 products/month.
The Professional Plan will cost you $39.99/month + fees no matter how many items you sell. This plan also gives access to Prime shipping, which ensures expedited delivery.
To use Amazon’s dropshipping service, you (the seller) isn’t allowed to purchase products from third-party firms and then trade via Amazon.
The products must contain your listed company name and logo and must be shipped with your company.
What type of product and how much do you plan to sell?
The two fee plans are only a starting fee you pay to sell on Amazon
Amazon has a dropshipping calculator to help merchants work out how much they’ll need to enjoy the service.
Amazon considers lots of things, including; size and weight of the item, Fulfillment fee (because Amazon does everything including packaging, storing & shipping ), and lastly, the referral fee.
Do the Math to Make an Informed Decision
Entrepreneurs are advised to use the dropshipping calculator in Amazon’s official site to work out costs to confirm if the venture is worth their resources.
The per-month plan costing $39.99 is a more practical approach. However, be ready to trade your items for much more to offset the dropshipping fees.
The bottom line
Numbers don’t lie, and because there are no hidden fees here, you can already work out an approximate of what you’ll make upfront.
Because of the many factors involved, start with the math to avoid disappointments.
Author Bio: Blair Thomas has been a music producer, bouncer, screenwriter, and for over a decade has been the proud Co-Founder of eMerchantBroker, the highest-rated high-risk credit card processing firm in the country. Blair also helps entrepreneurs acquire merchant account for drop shipping. He has climbed in the Himalayas, survived a hurricane, and lived on a gold mine in the Yukon. He currently calls Thailand his home with a lifetime collection of his favorite books.