Amazon dropshipping can be a powerful sales channel for entrepreneurs, offering the potential for impressive returns. But how does it actually work—and what steps can you take to make it a profitable part of your ecommerce business?

In this guide, you’ll learn how Amazon dropshipping works, plus discover practical tools and strategies to help you get started and begin selling with confidence today.

What is Amazon Dropshipping?

Amazon dropshipping is a business model where sellers list products on Amazon without keeping inventory on hand. When a customer makes a purchase, the seller orders the item from a third-party supplier, who ships it directly to the buyer. This allows entrepreneurs to run an Amazon dropshipping business with minimal upfront investment and hassle.

Does Amazon Allow Dropshipping?

Yes, Amazon permits dropshipping on its marketplace—but only if you follow specific rules:

You must be the sole seller of record for your products.
Your business must appear as the seller on packing slips, invoices, and other product information.
Any information identifying the third-party supplier must be removed before the order reaches the customer.
You are responsible for accepting and processing returns.
You must adhere to all terms of your seller agreement and Amazon’s dropshipping policy.

Following these guidelines ensures your Amazon dropshipping business stays compliant and avoids account issues.

What’s Changed for Amazon Sellers in 2025

2025 hasn’t been business as usual for Amazon sellers. Four key policy and program shifts—some reducing costs, others adding them—are reshaping the landscape for both Amazon dropshippers and Fulfillment by Amazon (FBA) merchants.

1. Fee Credits for New Sellers

Brands that ship their first inventory within 90 days of listing can still receive $400 in fee credits. These credits are applied automatically to offset future inbound placement fees and low inventory surcharges, helping new sellers reduce startup costs.

While Amazon maintains the standard non-peak Deal fee at $70 plus 1% of sales, peak event rates have jumped significantly. For events like Prime Day, Black Friday/Cyber Monday, and Big Deal Days, fees now cost $500 per Lightning Deal and $1,000 per Best Deal—more than double what many sellers paid in 2023.

3. End of the US $800 De Minimis Duty Exemption

Starting August 29, 2025, all parcels entering the United States must clear customs and pay duties.

Private carriers like FedEx, UPS, and DHL will charge full tariff rates immediately.
Postal parcels receive a six-month, flat-fee grace period.

For dropshippers, this means import costs on low-priced inventory from China and most other countries will rise sharply. Be sure to factor in estimated duties (often 15–30% on many consumer goods) when calculating landed costs.

4. Free Generative AI Listing and Video Tools

Amazon has introduced Enhance My Listing (EML), a Seller Central feature that analyzes your existing listings and suggests optimized titles, bullets, and attributes.

Leveraging Amazon shopping insights, EML can boost listing quality scores by up to 40% compared to pre-AI versions. Sellers can even upload a single product photo, and the tool will generate ready-to-publish copy, making it easier than ever to improve listings and attract buyers.

How to Start Dropshipping on Amazon in 6 Steps

To start selling on Amazon, create a Seller Central account at sellercentral.amazon.com.

During sign-up, you’ll need to provide:

Business email address
Internationally chargeable credit card
Government-issued ID
Tax information
Phone number
Bank account for receiving payments

This account is the foundation for your Amazon dropshipping business and gives you access to all the tools you need to start selling.

2. Get Approved in Your Product Category (If Necessary)

Amazon requires sellers to obtain approval for certain product types. Popular categories that often need approval include collectibles, music, and watches. Check Amazon’s overview of product categories to see if your items require approval.

Keep in mind that some individual products may require approval even if their category doesn’t. You can verify this by searching Amazon’s product restrictions list and clicking “Show Limitations.”

If you’re exploring products to dropship, consider using Amazon’s Product Opportunity Explorer to track how customer demand for items changes over time—helpful for selecting profitable inventory.

3. Log into Your Shopify Store

If you don’t already have a Shopify store, start a free trial. Using Shopify for dropshipping makes it easy to connect your Amazon listings with your product suppliers, streamlining inventory management and order fulfillment.

4. Connect Your Amazon Account to Shopify

After creating your Amazon account and obtaining any necessary approvals, link your Amazon store to Shopify using an Amazon integration app from the Shopify App Store.

These apps act as a bridge between Amazon and Shopify, allowing you to:

Automate order fulfillment
Provide customers with up-to-date tracking
Sync product inventory

Popular apps include:

Marketplace Connect
CedCommerce
Amazon Importer
Amazon MCF
Amazon Integration Plus

Once installed, these tools let you create listings and manage sales seamlessly across both platforms, saving time and reducing errors.

5. Create an Amazon Product Listing

Adding an integration app doesn’t automatically list your dropshipping products on Amazon. To manage your Amazon dropshipping listings through Shopify, you have three options:

Link your Shopify listings to existing Amazon listings using your integration app.
Connect an existing Amazon listing to your Shopify store.
Create a new listing for a product not yet on Amazon.

If you’re new to Amazon dropshipping, note that you may face listing limits. Amazon restricts the number of new ASINs (Amazon Standard Identification Numbers) you can create each week until your seller account is established.

6. Promote Your Products on Amazon

While marketing options on Amazon are somewhat limited, there are still several effective ways to promote your products and boost visibility on the marketplace.

Run Sponsored Product Ads

If you have a marketing budget, consider Sponsored Product ads. Amazon’s cost-per-click (CPC) ad program can boost your products’ visibility by positioning them higher in search results.

Optimize Your Listings

Every Amazon product page follows a standard layout, so it’s crucial to craft compelling titles, high-quality images, and well-written “About This Item” bullet points. Keep in mind that customers often skim pages and compare similar products.

There are no restrictions on promoting Amazon links on most social platforms. You can create Instagram Reels to showcase your products or run Facebook ad campaigns to drive traffic to your listings.

How Much Does It Cost to Dropship on Amazon?

Amazon seller fees vary by product type, typically ranging from 8% to 15%. If you’re working with small margins, these fees can significantly impact your profits.

Categories with the lowest seller fees include appliances, consumer electronics, tools, and automotive products. Keep in mind that Amazon fees are calculated as a percentage of the item’s total price, with a minimum fee of $0.30 per item.

You’ll also need a selling plan to start selling:

Individual plan: $0.99 per unit sold
Professional plan: $39.99 per month, regardless of the number of products you sell

Understanding these costs upfront will help you price your products correctly and maintain profitability in your Amazon dropshipping business.

Is Amazon Dropshipping Profitable?

Amazon dropshipping can be highly profitable for independent sellers. Since you don’t hold inventory or manage unpredictable shipping costs, your overhead stays low.

Profit margins for dropshippers can reach up to 40%, providing substantial earning potential. Keep in mind, however, that Amazon charges referral fees on each sale, which should be factored into your pricing strategy.

How to Choose a Dropshipping Supplier

Your biggest competitive advantage as an Amazon dropshipper is partnering with the right supplier. Beyond adjusting your pricing, the right supplier can help you stand out in your niche. Look for these qualities:

Reliable shipping to your customers’ locations
High-quality products in your niche, comparable or superior to competitors
Strong reputation, with no customer service red flags or consistently poor reviews
Low per-order fees that protect your profit margins
Trusted by other successful dropshippers
Competitive shipping times for your niche
Accessible live customer support

Because dropshipping has grown in popularity, fake or malicious suppliers have also increased. Follow the latest dropshipping guidelines to avoid wholesalers with unnecessary fees. You can also consider connecting with verified Shopify brands that offer quality products, better margins, and reliable fulfillment.

Top Amazon Dropshipping Software

These tools are designed to help you streamline your Amazon dropshipping business:

MerchantWords

MerchantWords helps you analyze search volume and keyword data for Amazon products, giving insights to optimize your listings and improve discoverability.

Price: Paid plans start at $35 per month.

Sellery

Sellery is a real-time Amazon repricing tool that suggests strategies to help you win the Buy Box and boost sales.

Price: Free trial available. Paid plans start at 1% of your gross monthly sales, with a minimum fee of $50 per month.

FeedCheck

FeedCheck helps you monitor customer reviews across Amazon and other sales channels, ensuring you can respond promptly. It also lets you track competitors’ reviews and questions, giving insights to refine your own product descriptions and improve listings.

Price: Available on request.

How to Run an Amazon Dropshipping Business Without Money

While most dropshippers invest in online stores, content creation, advertising, marketing, and management software, it is possible to start Amazon dropshipping with little to no upfront cost. Here’s how you can get started without spending a dollar:

Choose the Individual Seller Plan

Amazon’s Individual Seller plan charges per item sold, unlike the paid Professional plan. This means you won’t pay any fees until you make your first sale, making it ideal for starting a dropshipping business with little to no upfront cost.

Pick Suppliers with Zero Upfront Costs

Most reputable dropshipping suppliers don’t charge upfront fees, so you only pay after a sale has been made and you’ve received payment from your customer.

If you can spare a few dollars, consider purchasing the products you plan to sell. This allows you to inspect quality firsthand and create more effective marketing content.

Create Your Own Content

Craft your own product descriptions, reviews, photos, and demonstration videos—even using just your phone.

While creating content yourself can be time-consuming and may not match professional quality, you can still make it effective by:

Studying competitors’ content for inspiration
Researching your target customers to understand their needs and preferences

Well-crafted, self-made content can clearly communicate your product’s key benefits and persuade customers why they should buy from you.

Harness Organic Marketing Channels

Organic marketing is one of the most cost-effective ways to promote your products without paying for ads.

Social Media: Platforms like Facebook, Instagram, and TikTok can help spread awareness if your content balances entertainment and promotion. Stay on top of trends and put your own creative spin on popular memes.
SEO Marketing: Optimize your content with relevant keywords in product descriptions and make it as useful as possible. This helps your listings appear more often in Amazon and Google searches, driving traffic without additional cost.

Running a Dropshipping Business with Your Online Store

Instead of selling Amazon products through third-party marketplaces, you can start your own online store to list and promote your products.

Having your own store can be a more sustainable dropshipping model in the long term. It gives you greater control over customer service, as well as flexibility in marketing, branding, and pricing—helping you build a stronger, more independent business.

Pros of Dropshipping with Your Online Store

More Control

Running your own online store lets you design a shopping experience tailored to your customers. You can customize the layout, visuals, and product pages to match your niche and optimize for conversions.

Easy Design

With store builders like Shopify, designing and running your own store is straightforward. Once your site is live, you can easily add features that boost conversion rates.

In fact, it’s possible to set up your store, brand it, add products, and connect a payment gateway—all within a single day—making it ready to start generating sales quickly.

Mobile-Ready

Make it easy for customers to shop on any device. Ecommerce platforms automatically create responsive stores that adapt to different screen sizes, ensuring a smooth shopping experience on smartphones, tablets, and desktops alike.

No Third-Party Fees

Running your own online store means avoiding Amazon’s referral fees, which can significantly boost your profit margins and give you more control over pricing.

Building a Real Business

Creating your own independent store means building a long-term business with a unique identity. This setup encourages repeat customers and helps foster loyalty, with satisfied buyers more likely to recommend your store to others.

More Shipping and Supplier Options

Running a dropshipping business on your own site lets you partner with multiple wholesalers. This gives you greater flexibility in shipping, more product choices, and the ability to diversify your supply chain to better serve your customers.

Cons of Dropshipping with Your Online Store

No Free Traffic

When you run your own store, all traffic is your responsibility. You’ll need to drive visitors through marketing, social media, SEO, and paid advertising, unlike marketplaces where buyers are already browsing.

Other Ways to Sell on Amazon

If you want a presence on Amazon but dropshipping isn’t the right fit, there are other selling options. Two popular alternatives are:

Affiliate Marketing – Earn commissions by promoting Amazon products without handling inventory.
Fulfillment by Amazon (FBA) – Send your products to Amazon’s warehouses, and they handle storage, packing, and shipping for you.

Amazon Affiliate Marketing

Amazon’s affiliate program, Amazon Associates, is a free and popular alternative to dropshipping. Affiliates promote Amazon products through websites, ads, or social media posts.

When someone clicks an affiliate link and makes a purchase on Amazon, the affiliate earns a commission. Rates vary by product category, typically ranging from 3% to 5%.

To become an Amazon affiliate, ensure your website or social media account meets the program’s eligibility criteria before signing up.

Amazon FBA (Fulfillment by Amazon)

Amazon’s Fulfillment by Amazon (FBA) program lets you send your products to Amazon’s fulfillment centers, where they handle storage, packaging, shipping, customer service, and returns.

While FBA can save significant time and effort, it does come with fees, including storage and fulfillment charges, which should be factored into your pricing and profit calculations.

Amazon FBA vs. Dropshipping

Both Amazon FBA and dropshipping let you sell products without holding inventory, but they work differently:

FBA: You send products to Amazon’s fulfillment centers, and Amazon handles storage, packing, shipping, and customer service.
Dropshipping: A third-party supplier manages inventory and fulfills orders directly to your customers.

Understanding these differences helps you choose the model that best fits your business goals and resources.

Amazon Dropshipping FAQ

Is Amazon dropshipping profitable?
Yes, dropshipping can be profitable. Many entrepreneurs earn good income on Amazon, but success depends on choosing a profitable niche, sourcing quality products, and marketing effectively.

Is Amazon dropshipping legal?
Yes, Amazon dropshipping is legal as long as you follow Amazon’s policies—including being the seller of record and taking full responsibility for customer returns.

Is Amazon-to-eBay dropshipping allowed?
No. While dropshipping is allowed on eBay, purchasing items from Amazon to fulfill eBay orders is prohibited. You can sell on both platforms but must use compliant fulfillment methods.

Is Amazon FBA dropshipping worth it?
FBA can be worthwhile if Amazon is your primary sales channel and you don’t want to handle storage, packaging, or shipping. It helps sellers start and scale with lower overhead costs.

Can you dropship for free on Amazon?
Not entirely. Selling requires an Amazon seller account:

Professional plan: $39.99/month
Individual plan: $0.99 per unit sold Additional fees—like referral, closing, or high-volume listing fees—may also apply.

How to Start Amazon Dropshipping: Beginner’s Guide, Tips & Tools