Your Guide to Dropshipping On Amazon Legally
KEY POINTS:
- Dropshipping on Amazon legally is more complicated than just opening a shop and selling products.
- You must be approved as an authorized distributor of the products you’re selling and each brand must have a dropshipping fulfillment center.
- You must have a Letter Of Authorization to sell a brand’s products on Amazon.
- You must be able to pass Amazon’s compliance department audits.
What Is A Dropship Distributor?
Dropship distributors are authorized resellers or brands that don’t ship products wholesale, but rather operate under direct contracts with dropshipping corporations. They typically work out of a centralized fulfillment center or have a network of fulfillment centers across the country.
Whenever you open a contract with one of these companies, you get access to their entire product catalog. Some dropshipping distributors focus on certain niches such as Lee Mar Pets. They are a Pet Supplies/Pet Food-focused company and primarily have products in that niche.
Other distributors are much larger and carry hundreds of thousands of products across multiple niches. Lee Mar is an example of a wholesaler that has a dropship program you can enroll in. If you are approved at Lee Mar, you are automatically authorized to sell any brands they carry and sell to you.
It’s important to clarify with brands that you sell on Amazon or Walmart as some brands have different terms for Marketplace Sellers.
How Do You Get A Contract With A Dropship Distributor?
Finding dropship wholesalers or distributors is the easy part. Getting approved and licensed to dropship big brand names like Dell, LG, Lenovo, etc. is much more of a challenge.
Luckily, you don’t have to do it alone. That’s where League Of Ecom comes in.
Using our existing network, industry knowledge, and contacts within brands, our Operations Department can easily expedite your dropship distributor applications and guarantee approvals even for brand new corporations.
We know exactly what each dropshipping distributor is looking for from small details on the application to information on your business website, funding types, preferred credit terms, estimated monthly spend, and so much more. We tailor your website anytime we apply to a distributor to ensure we are approved and leverage trade references from our existing network to bolster your application even more.
Each distributor is different. For small distributors, the application is typically just an online form we need to fill out correctly. But for the big fish we like to work with who carry big brands, those applications can take 4 to 6 weeks to successfully open. Then, they can take dozens of email and phone call communications, interviews, etc to be approved.
Our team will handle this entire process for you.
What’s Next After I Get Approved At A Distributor?
After we have our final approval and the dropshipping distributor has sent us all of the licensing, letters of authorization, and other documentation needed to start selling, we can run profit analytics on their product catalog.
Different distributors have different types of catalogs, and some distributors have as many as 500,000+ available products. It’s important to use software to speed up this process. Tools like Wholesale Inspector can make the process go much faster by running hundreds of thousands of analytics in a matter of minutes.
Once you have shortlisted products that meet your estimated profit, sales, price volatility, sales volatility, competition, and historical sales requirements, we can bulk list all of the listings and begin to get sales that same day!
What If Amazon Asks Why We Are Dropshipping?
If Amazon’s compliance department requests information about where we are sourcing products from and asks if we are dropshipping, we can easily provide all the documentation from the distributor that shows we are licensed to sell all of the products listed on our store.
We go above and beyond to provide tracking information for all orders so they can verify the order number from the distributor, where each order originated from, and when it was delivered. Once Amazon reviews this information and verifies we are running a fully approved business model, we are clear to scale as high as your working capital allows!
Takeaways
At League Of Ecom, we will run your dropshipping Amazon business using a 100% Amazon-Approved business model.
The explanation above is a simplified version of our procedures and practices, but it is the general structure we follow when operating a client’s business. We get your corporation all the proper licensing to not only dropship products on Amazon, but also sell big brand products with no issues. We handle all product analytics and listing maintenance as well.
If you’re going to operate a legal dropshipping fulfillment model on Amazon, it’s vital to get approved for contracts with dropship distributors. These contracts will make or break your dropshipping business.
For expert help finding dropship distributors and getting approved, turn to League of Ecom.
