Amazon dropshipping: Legitimate side hustle, or too good to be true?
Because e-commerce is taking over traditional retail, it’s no surprise that dropshipping has taken off.
The e-commerce industry is booming and expected to grow exponentially in the coming years. The digital marketplace is ever-changing as new entrepreneurs find ways to deliver products to customers.
Dropshipping is a hot topic in the business world, sparking some debate.
Many people have mixed feelings about dropshipping, its efficacy, and whether it can be turned into a profitable side hustle. While some people think the dropshipping business model is one of the future, others believe it’s a total scam.
Let’s explore more about dropshipping on Amazon, whether it’s legit or a get-rich-quick scheme, and some of the pros and cons of Amazon dropshipping.
What Is Amazon Dropshipping?
Dropshipping is a type of fulfillment option where individuals purchase products at wholesale prices and resell them to customers at a higher price to earn a profit.
The model is typically associated with low overhead costs and low capital investments, which is why entrepreneurs are attracted to dropshipping. Dropshippers do not have to worry about storing products or managing inventory, as the products ship directly to customers from the manufacturer.
Traditional retail sales are declining due to the increasingly popular dropshipping method. It shouldn’t come as a surprise since the retail landscape is digitally transforming rapidly.
Additionally, Amazon has strict dropshipping policies listed on its website, highlighting how dropshipping should be handled when selling on Amazon’s Merchant Fulfilled Network (MFN).
Is Amazon Dropshipping a Scam?
Some people who have tried dropshipping methods but failed to earn enough income tend to call dropshipping a scam. However, there are some dropshippers who’ve managed to earn seven figures.
Generally speaking, dropshipping in itself is not a scam, but sometimes scammers will use dropshipping to gain the upper hand over customers. Some people will advertise designer or high-quality products when, really, the products often don’t measure up to customer expectations.
For example, some products may have different materials, the stitching could be all wrong, or the product doesn’t function properly.
Others will act as life coaches who scam wannabe dropshippers with get-rich-quick advice at costly seminars. The FTC even warned consumers about a company in 2018 that took advantage of many people hoping to make money as Amazon sellers.
“Get started selling on Amazon and make $5,000 – $10,000 in the next 30 days… even if you’ve never sold anything online before.” That’s one of the pitches the promoters of a large get-rich scheme used to lure people into a bogus business opportunity.
Keep in mind that using middlemen to sell products has been a common practice for decades now. Still, there’s been recent hype about dropshipping, especially across social media channels.
For example, some dropshippers are using their platform on social channels like TikTok to share their positive experiences with others and convince others to give dropshipping a try.
Pros and Cons of Amazon Dropshipping
In essence, if legal requirements are followed, dropshipping is a legitimate business tactic that anyone can get involved in. Dropshippers need to follow the policies imposed by the online platforms they use to sell their products, like Amazon or Shopify.
Let’s explore some of the pros and cons of Amazon dropshipping.
Five of the primary advantages of dropshipping for merchants include:
- Lower startup costs and risk
- Easy scalability and expansion to new markets
- Greater customer engagement and lifetime value
- No storage or logistics costs
- Quick product listings
Dropshipping has many pros, but it also has some cons that would make someone think twice before getting involved in this fulfillment process.
Here are some of the drawbacks of getting involved with dropshipping:
- Dropshippers can run into supplier coordination issues
- Highly competitive markets
- Complex order processing
- Reduced shipping visibility
It’s clear that dropshipping has advantages and disadvantages, and it’s critical for anyone interested in dropshipping to consider all of these factors before jumping in headfirst.
Like any business, dropshippers need to work ethically to avoid lawsuits from customers or disputes with suppliers.
Dropshipping will likely remain profitable for some — the majority of dropshippers fall in the middle, where they make some income but not enough to quit their day job.
Amazon Dropshipping: The Practice Can Be Profitable
Because e-commerce is taking over traditional retail, it’s no surprise that dropshipping has taken off. In essence, Amazon dropshipping can be transformed into a profitable side hustle.
Still, it’s always suggested that those who are interested do their research into dropshipping to see if it’s the right type of business to pursue.