Amazon Dropshipping Guide: Simple Steps for Starting Your Amazon Dropshipping Business
Updated: Sep 13, 2021
If you want to become an Amazon dropshipper, here are the necessary steps to get started.
Step #1: Set Up Your LLC and EIN
Here are the benefits of registering as a Limited Liability Company (LLC):
Personal assets (e.g. car or home) are protected in case of any business debts, claims or lawsuits
LLCs aren’t taxed as separate business entities and members report profits and losses on personal federal tax returns
Profits and losses are therefore funneled through the business to each employee
You’ll also receive an employer identification number (EIN) in accordance with IRS guidelines.
Step #2: Set Up A Bank Account
Set up a bank account that allows for easy online banking. We suggest JP Morgan Chase Bank, but others are good as well.
Step #3: Apply For A Credit Card Which Provides High Cashback Or Great Rewards Points Programs
Credit cards help you pay for the items you need to buy so you can start selling immediately.
Additionally, choosing a cashback credit card provides another revenue stream for your business that’ll offset many of your expenses. You’ll be using the credit card a lot, so the rewards will add up quickly (2%).
Credit cards come with purchase protection, additional insurance, and fraud protection which covers the risk of spending with new suppliers.
If you play this right you will get paid out by Amazon once every 14 days, while only having to pay your credit card once every 30 days (without having to pay financing fees). This means this business can be run with no out of pocket investment at all.
Cash back credit cards that we recommend:
American Express Plum
Rewards points cards we recommend:
Chase Ink Business Preferred
Step #4: Set Up Your Pro Merchant Amazon Seller Central Account
Setting up your professional account costs $39.99/month and you’ll be able to list unlimited products. To start you’ll want to set shipping times to 3-5 business days and select free shipping. Go to Settings> Account Info > Your Services > Manage.
Pro Tip: Steal our templated shipping terms and make them your own.
Step #5: Connect Your Amazon Account to a Business Bank Account
Sales revenue is transferred electronically via Amazon to dropshippers. There must be a specified bank account for deposit – Amazon doesn’t pay through online payment channels (e.g. PayPal) or credit cards.
Quick Tip: Ensuring your business address is associated with your account will prevent payment delays. Your address should be located in a country supported by the selling region.
Furthermore, turn off open listing seller notifications through your Amazon Seller preferences to avoid constant emails from Amazon. (Uncheck “open listing report”) unless you want to get bombarded with emails :)
Step #6: Sign up for A Cashback Program
If you have to source an item, such as a punching-bag from Walmart to resell, you’ll earn extra (sometimes up to 15%!) by ordering through one of the previously mentioned cash back websites.
Below is a breakdown of the steps you’d need to take:
2. Choose Walmart.com to open in a new tab
3. Purchase punching bag
4. Check out with choice of payment
5. You will be paid out your rewards on the schedule that the site supports
The above is a generalized example and there may be minor differences in the process when using each program. Similar to cashback credit cards, these programs offer additional revenue stream for your business.
Step #7: Use These Automation Tools to Get Started
OAGenius Sage is the perfect tool for streamlined inventory, cost price and order management, automating operations so you can focus more time on building your business.
OAGenius’s Gravity product sourcing extension enhance product research efforts. The OAGenius extension, in particular, offers browsing, comparing, filtering, and buying/selling tools that promptly pinpoint lucrative arbitrage opportunities.
Informed.co automates repricing to ensure the best profit margins and boasts proven “buy box” success.
Feedback Genius automates follow-up emails and garners positive reviews for your products as well as gathering valuable feedback from customers. The software also contains valuable tracking number information, helping you automate both “shipment notification” messages and “after delivery check-in” messages.
Lastpass is a free and versatile security software that generates strong, rotating passwords and contains tools that automate logins so you don’t waste time fumbling for passwords.
Step #8: Draft Customer Service Email Templates
"Reports show 55% of businesses believe that strong customer service leads to increased sales"
As a dropshipper, that means responding to customer emails. Do so in a timely fashion by drafting templates for the following common customer emails:
Client upset about pricing
Lost package – reach out to the shipping company
Delayed or backordered item
Customer requests cancellation for an order that was already placed
The order has been successfully canceled
A customer requesting tracking
A customer received a damaged item – request photos
A customer received a damaged item – photos received
Pro Tip: In the interest of time-efficiency, download our free templates for Amazon customer service success!
Step #9: Set Up Quickbooks For Online Accounting
Keeping tabs on expenses is essential for your business’s financial health. For instance, you may find that outsourcing is hindering your bottom line because salary can account for up to 52% of a business’s operating budget!
Set up an account on Quickbooks with your business bank account and credit cards.
Mint users can seamlessly monitor bank, credit card, investment, loan balances, and transactions while setting budgets and financial goals.
Step #10: Download Seller Central Phone Application
The phone application helps you keep an eye when you are on the run! Also it’s fun to watch the money rolling in.
It should take no longer than 2-3 weeks to have all of your business affairs in order. Once you are set up the right way there should be nothing stopping you from listing items and making sales!
If you made it this far then Congrats! You are now once step closer to becoming an Amazon online arbitrage genius!
Have A Question?
Submit your questions to firstname.lastname@example.org or simply message our website chat to get in touch with out success team (found at the bottom right hand side our website).
Percent of a Business Budget for Salary. From Chron:
7 customer service email templates (ready to handle the toughest customers!). (2019, January 4). From SuperOffice:
Why Do I Keep Getting Emails From Amazon About Open Listings? (2015, July 28). From SellerExpress: https://support.sellerexpress.com/hc/en-us/articles/201008347-Why-Do-I-Keep-Getting-Emails-From-Amazon-About-Open-Listings-
Increase Your Profits When Doing Online Arbitrage with eBates.com. From repricerexpress:
Using Credit Cards for Buying Amazon Inventory. (2017, May 17). From Payability:
Do I need to form an LLC to start selling stuff on Amazon? From Quora: