Amazon dropshipping can boost profits

New Ideas in MarketingEssential news for marketers, summarised by YouGov
January 04, 2021, 9:07 AM GMT+0

Businesses can leverage Amazon dropshipping feature to expand their reach and enhance profitability.

To be eligible for Amazon dropshipping, businesses should be the seller of record for products. Companies should identify themselves as the seller on the packaging slips and all other product-related information while also staying responsible for accepting and processing returns.

Leveraging Amazon dropshipping can help brands enhance profitability. The average drop shipping margin for businesses is around 10% to 30% margins, while the e-commerce giant takes about 15% of the top-line revenue. Companies can achieve higher margins if they win the Amazon Buy Box, but it is not a reliable option in the long-term.

As Amazon offers its fulfilment centres, businesses can save their warehouse expenses. Amazon dropshipping also gives brands access to its vast consumer base. However, this form of sales does not provide an option for brands to foster long-term customer relationships.

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