Amazon Dropshipping: How It Works and How to Get Started in 2025
In 2025, more sellers than ever are looking into Amazon dropshipping as a business model. With the promise of low upfront costs and high scalability, it's easy to see the appeal. But how does dropshipping on Amazon actually work? And is it as profitable as it sounds?
What Is Amazon Dropshipping and How Does It Work?
At its core, dropshipping on Amazon means listing a product for sale without physically storing or shipping it yourself. Instead, when a customer places an order, you purchase the item from a third-party supplier who handles the fulfillment and ships the product directly to the buyer. This makes it different from both Fulfilled by Merchant (FBM), where the seller handles storage and shipping, and Fulfilled by Amazon (FBA), where products are stored in Amazon's distribution centers and shipped by Amazon itself.
In a typical Amazon dropshipping setup, the seller is responsible for the storefront, product listings, marketing, and customer service. The supplier stays in the background, managing inventory and delivery logistics. However, it’s critical to follow Amazon’s dropshipping policy. For instance, you must be the seller of record, ensure that no third-party branding appears on invoices or packaging, and take full responsibility for returns and customer experience. Using marketplaces like AliExpress for this purpose is explicitly prohibited.
In a typical Amazon dropshipping setup, the seller is responsible for the storefront, product listings, marketing, and customer service. The supplier stays in the background, managing inventory and delivery logistics. However, it’s critical to follow Amazon’s dropshipping policy. For instance, you must be the seller of record, ensure that no third-party branding appears on invoices or packaging, and take full responsibility for returns and customer experience. Using marketplaces like AliExpress for this purpose is explicitly prohibited.
Is Dropshipping on Amazon Allowed? What You Need to Know
Yes, Amazon dropshipping is legal, but it comes with strict conditions. Amazon's policy requires that you remain the official seller of record. This means you can't simply pass orders to another retailer; you need to work with Amazon dropshipping suppliers who agree to remain invisible to the customer. They must ship orders in your name, avoid including any third-party invoices or branding, and let you handle all returns and customer inquiries.
To stay compliant, many sellers choose U.S.-based or private-label suppliers who are familiar with Amazon’s expectations. Print-on-demand companies or custom manufacturers are also viable partners since they offer white-label solutions. Failing to meet these requirements, even unintentionally, can result in account suspension—a risk no seller wants to take.
To stay compliant, many sellers choose U.S.-based or private-label suppliers who are familiar with Amazon’s expectations. Print-on-demand companies or custom manufacturers are also viable partners since they offer white-label solutions. Failing to meet these requirements, even unintentionally, can result in account suspension—a risk no seller wants to take.
Pros and Cons of Amazon Dropshipping
Thinking about launching an Amazon dropshipping business? Here's what you should know.
The key to success is treating dropshipping on Amazon as a legitimate business, not a “get-rich-quick” scheme.
How to Set Up a Dropshipping Business on Amazon (Step by Step)
Ready to start? Here's how to launch your Amazon seller dropshipping setup in 2025:
1. Register a Seller Account. Start by creating a professional seller account on Amazon. Choose your country, business type, and payment method.
2. Find Reliable Suppliers. Look for suppliers who specialize in dropshipping. Popular platforms include:
Vet each supplier for:
3. Choose Your Niche
Use product research tools (covered below) to identify in-demand items with low competition. Avoid saturated markets and look for “hidden gem” products.
4. Create Optimized Listings
Ensure your product titles, descriptions, images, and backend keywords are optimized for Amazon SEO. Honest, clear descriptions reduce returns and boost conversions.
5. Manage Orders and Customer Support
When orders come in, forward them to your supplier immediately. Be proactive with customer support, track shipments, and handle refunds professionally.
2. Find Reliable Suppliers. Look for suppliers who specialize in dropshipping. Popular platforms include:
- Printful (print-on-demand)
- Spocket
- Doba
- Oberlo (Shopify-centric but can inform sourcing ideas)
Vet each supplier for:
- Shipping speed
- Return policy
- Willingness to white-label products
3. Choose Your Niche
Use product research tools (covered below) to identify in-demand items with low competition. Avoid saturated markets and look for “hidden gem” products.
4. Create Optimized Listings
Ensure your product titles, descriptions, images, and backend keywords are optimized for Amazon SEO. Honest, clear descriptions reduce returns and boost conversions.
5. Manage Orders and Customer Support
When orders come in, forward them to your supplier immediately. Be proactive with customer support, track shipments, and handle refunds professionally.
Always remember: to Amazon, you are the seller. That means your reputation is on the line, not your supplier’s.
Tools to Help You Succeed with Dropshipping on Amazon
Success in Amazon dropshipping often comes down to research. That’s where tools like Jungle Scout, Helium 10, AMZScout come in. They help sellers identify trending products, track demand over time, estimate competition, and find winning keywords — all before you even list an item. These platforms are especially useful for testing niche ideas and avoiding saturated markets.
By analyzing search volumes, seasonal shifts, and sales rankings, you can make more informed decisions and reduce the risk of listing products that won’t convert.
By analyzing search volumes, seasonal shifts, and sales rankings, you can make more informed decisions and reduce the risk of listing products that won’t convert.
How to Estimate Sales Potential Before You List a Product
To avoid wasting time on dead-end products, use the Jungle Scout Sales Estimator to calculate demand. Here's how:
- Go to the product page on Amazon and find the BSR (Best Seller Rank) under "Product Details."
- Head to the Jungle Scout Sales Estimator;
- Choose the marketplace (e.g., US);
- Select the appropriate category;
- Enter the BSR;
- Click “Calculate Sales.”
You’ll see an estimate of how many units sell monthly. This helps you assess whether the product is worth adding to your Amazon dropshipping business.
Use this tool to prioritize listings with real momentum—and avoid chasing trends that won’t convert.
Use this tool to prioritize listings with real momentum—and avoid chasing trends that won’t convert.
Best Practices and Tips for Amazon Dropshipping in 2025
Even with the right tools and suppliers, success depends on execution. Here are strategies top dropshipping amazon sellers use:
1. Focus on Branding
Instead of generic listings, build a consistent visual identity. Consider working with suppliers who offer private-label options. Having a unique logo and custom packaging builds trust.
2. Be Honest in Descriptions
Don’t oversell. Highlight key benefits, include accurate dimensions and shipping times, and manage customer expectations.
3. Monitor Reviews and Returns
Set alerts for negative reviews and fix problems quickly. Some tools let you automate review tracking and respond faster.
4. Choose U.S.-Based Suppliers (When Possible)
This reduces shipping delays and avoids customs issues. Local suppliers often offer better tracking and faster support—leading to happier customers.
5. Avoid Rule Violations
Even if you’re not dropshipping from AliExpress, double-check your supplier’s fulfillment practices. Make sure no third-party branding appears in packages or invoices.
6. Track Performance and Adjust
Use Amazon analytics and external tools to monitor conversion rates, returns, and keyword performance. Test multiple products, but double down on what’s working.
Instead of generic listings, build a consistent visual identity. Consider working with suppliers who offer private-label options. Having a unique logo and custom packaging builds trust.
2. Be Honest in Descriptions
Don’t oversell. Highlight key benefits, include accurate dimensions and shipping times, and manage customer expectations.
3. Monitor Reviews and Returns
Set alerts for negative reviews and fix problems quickly. Some tools let you automate review tracking and respond faster.
4. Choose U.S.-Based Suppliers (When Possible)
This reduces shipping delays and avoids customs issues. Local suppliers often offer better tracking and faster support—leading to happier customers.
5. Avoid Rule Violations
Even if you’re not dropshipping from AliExpress, double-check your supplier’s fulfillment practices. Make sure no third-party branding appears in packages or invoices.
6. Track Performance and Adjust
Use Amazon analytics and external tools to monitor conversion rates, returns, and keyword performance. Test multiple products, but double down on what’s working.
Conclusion
Amazon dropshipping can absolutely work in 2025—but only if approached with preparation and care. It remains a legitimate and potentially profitable model, especially for sellers who invest in research, use reliable Amazon dropshipping suppliers, and stay compliant with Amazon's evolving rules. Whether you’re just learning how to start Amazon dropshipping or planning to scale your operations, success depends on consistent effort, strategic thinking, and a clear focus on delivering customer value.
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