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Why Drop shipping on Amazon is a Risky Business in 2024

Hey everyone, welcome back! This is Tim from AMZ Fusion, and today we’re diving deep into the topic of drop shipping on Amazon in 2024. Drop shipping is a hot topic, surrounded by a lot of hype thanks to numerous influencers and social media gurus promising overnight riches. But, let’s be real—if it were that easy, wouldn’t they just keep the secrets to themselves?

The Reality of Drop shipping on Amazon

  1. High Risk of Account Suspension: There are countless stories in forums and communities like ASGTG, where sellers share their nightmare experiences of having their Amazon accounts suspended and their funds withheld due to drop shipping violations.
  2. The Trap of Easy Money: Many gurus sell the dream of easy money through drops hipping. However, they profit from selling courses and software, not from the drop shipping business itself. If drop shipping on Amazon were as profitable and safe as they claim, these gurus would be doing it themselves rather than selling how-to guides.
  3. Amazon’s Strict Policies: Amazon has very strict policies regarding drop shipping. They require you to be the seller of record, ensure that no other retailer’s packing slips, invoices, or external branding are included in the shipments, and you must also handle returns and customer service. This model is quite different from traditional drop shipping, where you simply forward orders to suppliers like Walmart or AliExpress.

Examples of Drop shipping Pitfalls

  • Financial Risk: Consider a seller who has $30,000 tied up with Amazon when their account gets suspended. They’re left struggling, potentially facing legal battles to recover their funds. The financial model of drop shipping on Amazon can quickly turn profits into losses if Amazon decides to freeze your funds.
  • Operational Hurdles: Managing customer service, returns, and supplier inconsistencies are significant challenges. If your supplier delays a shipment or sends an item in branded packaging, your customer satisfaction could plummet, leading to negative reviews and possible account suspension.

Safer Alternatives to Drop shipping on Amazon

  1. Private Label: Create your own brand with products manufactured just for you. This gives you complete control over the quality and branding.
  2. Wholesale: Purchase products in bulk from a manufacturer or distributor and sell them under your own Amazon seller account. This method requires more upfront investment but offers more stability and control.
  3. Fulfilled by Amazon (FBA): While technically not drop shipping, using Amazon’s FBA service allows you to send your products to Amazon’s warehouse. Amazon takes care of all the shipping, handling, and customer service, minimizing your operational hassles.

Drop Shipping Wrap Up

Drop shipping on Amazon might seem like a tempting venture due to its low entry barrier and the illusion of easy profits. However, the risks far outweigh the potential benefits. It’s crucial to approach this model with caution and consider more sustainable, rule-compliant business strategies that ensure long-term success on Amazon.

For anyone looking to start or grow their Amazon business, focusing on models that align with Amazon’s policies will lead to a more sustainable and profitable business. Always remember, if something sounds too good to be true, it probably is.

If you have any questions about drop shipping or any other Amazon selling strategies, drop them in the comments below. Don’t forget to like and subscribe for more honest insights into the world of Amazon selling. See you in the next video!

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