How to Automate Amazon Dropshipping In 2024

Ready to take your Amazon dropshipping business to the next level?

Automating your store is a game-changer that will save you time, boost efficiency, and help scale your business—all while keeping you compliant with Amazon’s rules.

This guide will walk you through the essential steps to automate your Amazon dropshipping business, from finding reliable suppliers to syncing inventory and automating order processing. Let’s get started!

What is Amazon Dropshipping?

Dropshipping on Amazon is a business model in which you sell products without holding inventory. When a customer orders, you purchase the item from a supplier, who then ships it directly to the customer. 

Here’s a breakdown of how Amazon dropshipping works: 

1️⃣ List the products you want to sell on Amazon, ensuring they comply with Amazon's guidelines.

2️⃣ A customer places an order on your Amazon listing.

3️⃣ You purchase the product from your supplier, providing them with the customer's shipping details.

4️⃣ The supplier ships the product directly to the customer, using your branding and packaging as per Amazon's policies.

5️⃣ You manage customer communication, handle any issues, and keep the profit margin from the sale.

Why Automate Your Amazon Store?

Now that you know what Amazon dropshipping is all about, let's dive into the fantastic benefits you can enjoy and some challenges you might encounter.

✅ Low startup costs

Amazon dropshipping doesn’t require heavy upfront investment like traditional stores. 

Since you don’t need to buy inventory in advance, your initial costs are lower, and there’s no risk of unsold stock. 

Instead of spending on warehousing, you can focus on marketing or product branding. For example, you can offer various custom phone cases on Amazon and only order them when customers purchase, making it easier to get started with limited funds.

✅ Wide product selection

Dropshipping allows you to offer a wide range of products without worrying about physical storage. 

This flexibility lets you test different items and quickly add trending products to your store. 

For example, if eco-friendly kitchen gadgets are on the rise, you can add them to your store without the hassle of managing inventory and keeping your business relevant.

✅ Scalability

Scaling an Amazon dropshipping business is simple since suppliers handle inventory and shipping. 

As your online store sales grow, they manage the additional orders, allowing you to focus on marketing and customer acquisition. 

With global suppliers, you can also reach international markets without dealing with the challenges of cross-border inventory management.

The Challenges of Dropshipping on Amazon

With the good comes the bad—before implementing Amazon dropshipping automation, consider the possible challenges you might encounter. 

⚠️ Compliance risks

Amazon has strict policies for dropshipping, and failing to comply can lead to account suspension. 

You must be the seller of record, manage returns, and ensure that packaging reflects your branding without third-party info. 

Policies change frequently, so staying updated and regularly auditing your processes is critical to avoiding violations.

⚠️ Supplier reliability

Your business depends on reliable Amazon dropshipping suppliers. If they fail to deliver on quality, run out of stock, or cause shipping delays, it affects customer satisfaction and Amazon’s seller metrics. 

Vet your suppliers, maintain communication, and monitor performance closely. Having multiple suppliers reduces risk if one falls short.

⚠️ Thin margins

Competition on Amazon can lead to thin profit margins, especially with fees and fluctuating supplier costs. 

To improve profitability, focus on niche markets, offer unique products, and optimize costs. Repricing tools can help you stay competitive while protecting your margins.

⚠️ Customer service is your responsibility

You're fully responsible for customer satisfaction, including returns, refunds, and inquiries. Poor service impacts your ratings and sales. 

Automate communications, set clear return policies and respond promptly to customer questions to maintain a positive reputation and high seller ratings.

Step-by-Step Guide to Automating Dropshipping on Amazon

Source: Pexels 

Step 1: Understand Amazon's dropshipping policy

As we mentioned above, before you automate your Amazon business, familiarize yourself with Amazon's dropshipping policy to avoid any violations that could jeopardize your seller account.

You can use dropshipping to fulfill orders only if you:

✔️Are the seller of record of your products.

✔️Identify yourself as the seller on all invoices, packing slips, and external packaging.

✔️Remove any packing slips, invoices, or external packaging that identifies a third-party dropshipper.

✔️Accept and process customer returns.

✔️Comply with all other terms of your seller agreement and Amazon policies.

The following is a big no-no for drop shipping on Amazon: 

❌ Purchasing products from another online retailer (e.g., ordering from Walmart to fulfill an Amazon order) and having that retailer ship directly to customers.

❌ Shipping orders with packaging or documentation indicating a seller's name other than yours.

Step 2: Choose a profitable niche with product research software 

You’ll need to do some market research to find a profitable niche. Use tools like Jungle Scout or Helium 10 to analyze market trends, product demand, competition, and profitability.

To increase your chances of success, look at sales trends for products with high demand but low competition. 

These tools can help identify trending products, estimate sales volumes, and provide insight into competitors' pricing strategies.

Also, look at Amazon’s best-selling products in your niche and on Amazon’s search results. You’ll find a wealth of ideas here. 

Keep the following criteria in mind when choosing your products: 

➡️ Choose lightweight and easy-to-ship products, as this reduces shipping costs and simplifies logistics. These tend to be the most profitable products. 

➡️ Avoid seasonal items; focus on products that have steady demand throughout the year. Think pumpkin-spiced items for Fall and Halloween costumes and decor. 

➡️ Lastly, ensure your products are priced competitively, leaving room for a healthy profit margin after covering Amazon fees and supplier costs.

Step 3: Find reliable suppliers

Finding the right supplier is crucial to having a successful dropshipping business. 

So, when it comes to finding reliable suppliers, we highly recommend taking your time and doing your homework. Here are a few tips to find the right supplier for your Amazon store. 

1️⃣ Utilize multiple search methods

• Online directories: Websites like SaleHoo, Spark Shipping, etc., have checked and approved lists of suppliers. They often have free trials or cheap plans to try them out.
• Wholesale websites: Alibaba and Global Sources let you talk directly to manufacturers, but you need to be extra careful to find ones who do dropshipping.
• Google it: Search for things like "[what you sell] dropshipping suppliers" or "[where you live] wholesale suppliers" to find ones you might not know about.
• Trade shows and events: These events allow you to meet suppliers and see their products for yourself.

2️⃣ Evaluate potential suppliers thoroughly

When you have found a supplier, assess the following key criteria:

• Product quality and selection: Is the supplier's product range suitable for your target audience? Request samples to ensure quality meets your standards.

• Pricing and minimum order quantities: Can you achieve profitable margins after accounting for supplier costs and Amazon fees? Watch out for suppliers with high MOQs (Minimum Order Quantity) that may strain your budget.
• Shipping times and reliability: Speedy shipping is crucial for customer satisfaction. Look for suppliers offering fast and reliable shipping options to your target markets.
• Customer service and communication: Prompt responses to inquiries and issues are vital. Test their communication responsiveness and assess their willingness to assist.
• Reviews and reputation: Check online reviews and ratings to gauge their overall reputation. Be wary of suppliers with consistently negative feedback.

3️⃣ Contact and vet suppliers

If your supplier passes all the requirements above, reach out to them to inquire about their services. 

Ask about their dropshipping policies, fees, return process, and any specific requirements.   

Don't hesitate to negotiate pricing and MOQs for shipping terms, especially when establishing long-term relationships.

Lastly, small test orders should be placed to assess product quality, shipping speed, and overall service before committing to larger orders.   

Step 4: Set up your Amazon Seller Central account

Now that you have found a niche and a reliable supplier, you can move on to the next phase: setting up your Amazon account.

Information needed before you start

• Business information: Business name, address, and contact information if registering as a business. If you don’t have a company, you can use your details.
• Tax information: Your tax identification number or social security number.
• Bank account information: This is for receiving payments from Amazon.
• Credit card: A valid credit card for Amazon seller fees.
• Phone number: For verification.

Begin the registration process

1. Go to the Amazon Seller Central website.
2. Click on the "Sign Up" or "Register" button.
3. Follow the prompts to create your account. You'll be asked to provide your business or personal information, tax details, and bank account information.

Choose your selling plan

Amazon offers two selling plans:

1️⃣ Individual Plan: No monthly subscription fee, but you pay $0.99 per item sold, plus other selling fees. Suitable for sellers who plan to sell less than 40 items per month.

2️⃣ Professional Plan: $39.99 monthly subscription fee, plus other selling fees. No per-item fee. Ideal for sellers planning to sell more than 40 items per month and access additional features like inventory management tools and the ability to offer special promotions.

Complete your seller profile

After choosing your plan:

• Provide additional business information, including your store name, logo, and return policy.
• Set up your shipping settings, including shipping rates and handling time.
• Familiarize yourself with Amazon's selling policies and guidelines.

Step 5: Check if you need approval to sell your products

Some dropshipping products need special permission on Amazon. 

This is because Amazon wants to ensure certain items are sold responsibly. This includes things like collectables, music, and watches.

There are two ways to check if you need approval:

1️⃣ Category approval: Go to Amazon's overview of product categories and see if your product's main category needs approval.

2️⃣ Specific product approval: Some individual products might still need approval. Search for your exact product here to be sure.

Step 6: Find Amazon dropshipping automation software

Once your Amazon seller account is set up, it's time to streamline your business with automation tools. 

The right dropshipping automation software can save you time and help your business grow. Amazon automation software typically offers features like:

• Product importing: Easily bring product listings from your suppliers into your Amazon store.
• Efficient inventory management: Keep track of your stock levels in real time so you don't oversell.
• Order fulfillment: Automatically send orders to your suppliers so they can ship them to customers and get updates on the shipping status.
• Price monitoring: The software checks if your supplier changes their prices and updates your store prices to keep you profitable.
• Order tracking: Give your customers automated updates on where their packages are.
• Supplier management: Connect product listings to multiple suppliers and easily choose the best one for each order based on, for example, stock levels or location.
• Product customization: Before products go live in your store, edit their titles, descriptions, and prices so they match your brand.
• Sales analytics: Get reports on how well your products are selling, what people are buying, and how much profit you're making. This helps you make better decisions.

Evaluate the Amazon dropshipping software features 

When you're comparing an automation tool, keep these things in mind:

✅ Amazon integration: It has to work smoothly with Amazon Seller Central, so all your information stays up-to-date.

✅ Ease of use: A simple design and clear dashboard will make the dropshipping process easier.

✅ Good customer support: Choose a company that offers helpful support if you have problems.

✅ Room to grow: The best dropshipping software should be able to handle your business as it gets bigger.

Do your research

Before you make a decision, do a little bit of homework: 

• Read reviews: See what other Amazon sellers say about the software.
• Join seller communities: Talk to experienced sellers online; they might have good recommendations.
• Look for success stories: See if the software company has examples of how they've helped other businesses.
• Try it out: Most automated dropshipping software offers free trials or demos. Take advantage and test the product. 

Step 7: Connect your Seller account to your chosen Amazon dropshipping software 

Once you have selected your software, you’ll need to get it up and running. Work with your provider to connect the software to your Amazon account.

We can’t stress enough how important it is to learn how to use your dropshipping software. If you don’t understand how it works, you will have problems down the road. 

Take advantage of any tutorials or training materials to get comfortable with all the features.

Step 8: Connect your suppliers

The next step is to set up integrations with your dropshipping suppliers. Many automation tools can automatically sync product data, inventory levels, and pricing from suppliers or any custom supplier that offers API or FTP access. 

Make sure your suppliers are compatible with your tool, or add them manually if needed. This connection helps update your store in real time, ensuring accurate product listings and stock availability.

Step 9: Import your product listings

The next step in automating dropshipping on Amazon is to import product listings from your suppliers into your Amazon store. 

For example, dropshipping tools like Spark Shipping will gather complete product data from your suppliers. 

We then consolidate the data in one easy-to-use product catalog personalized to you, allowing you to easily upload the product data to your Amazon store, including to existing Amazon ASINs.

Step 10: Automate inventory management

Once your product listings are live, it's crucial to ensure you can manage inventory efficiently. This is where automating inventory management becomes essential. 

Automation tools like Ecomdash, Skubana, Sellbrite (and Spark Shipping!) sync your supplier's stock with your Amazon listings in real-time so you always know what’s available. 

They also send low-stock alerts to help you avoid overselling and disappointing customers.

Inventory tracking across multiple suppliers

Inventory syncing becomes even more critical if you’re working with multiple suppliers. Automation tools can track stock levels across all your suppliers to prevent overlap or confusion. 

These tools ensure that each supplier's product inventory is updated in real time. For example, if one supplier runs out of stock, the system can automatically switch to another supplier with inventory available, ensuring continuous sales without stockouts.

It’s also important to set reorder points for each supplier. 

By defining minimum stock levels, your automation tool will trigger automatic orders when inventory is low, helping you maintain consistent stock across multiple suppliers. 

This not only keeps your listings accurate but also ensures smooth fulfillment without delays.

Step 11: Automate pricing 

Pricing is king when it comes to your Amazon dropshipping business. Making frequent price adjustments is a real competitive advantage. And yes, you can also automate this aspect of your business. 

Automated pricing, also known as “repricing,” helps you keep your product prices competitive without constantly monitoring and manually adjusting them.

How to automate pricing

To automate your pricing strategy, use repricing tools like RepricerExpress or Feedvisor. These tools automatically track competitor prices and adjust yours accordingly, helping you remain competitive without constant manual updates.

Step 12: Set up order processing 

Order processing is the series of steps that happen after a customer places an order on Amazon. 

This includes forwarding the order details to your supplier, shipping the product, and ensuring the customer is informed of tracking updates.

In a manual setup, this process can be time-consuming and prone to errors, especially as your business grows. 

How to automate order processing 

➡️ Automated order processing: When an order is placed on Amazon, tools like Spark Shipping automatically pull the order details and forward them to the correct supplier or fulfillment center. This eliminates the need for manual order forwarding.

➡️ Set custom routing rules: Spark Shipping allows you to set custom rules for routing orders to different suppliers based on criteria like product type, destination, or cost. This ensures the most efficient supplier is selected for each order.

➡️ Real-time stock and pricing updates: The software continuously updates product prices and stock levels from your suppliers to your Amazon store. This ensures you’re always selling in-stock items and maintaining competitive pricing, reducing the chance of overselling.

➡️ Order confirmation and status updates: Spark Shipping automatically confirms orders with your suppliers and updates the order status in your Amazon Seller Central account. This ensures a smooth workflow from order to fulfillment.

Step 13: Automate order tracking 

Order tracking involves keeping customers informed about the status of their shipment, from the moment the product leaves the supplier to its delivery. It includes updating tracking numbers and shipment statuses.

How order tracking automation works

➡️ Automated tracking number retrieval: Spark Shipping automatically retrieves tracking numbers from your supplier as soon as the order is shipped. You don’t need to manually request tracking information, saving you time and reducing the risk of errors.

➡️ Automated tracking updates to Amazon: The tracking numbers are automatically uploaded to your Amazon Seller Central account, ensuring that the information is immediately available for your customers. This eliminates manual entry and ensures accuracy.

➡️ Automated customer notifications: As soon as the tracking number is updated, Spark Shipping can notify the customer of their order’s shipping status. This keeps your customers informed without needing you to send individual updates.

➡️ Shipment monitoring: Spark Shipping continuously monitors the shipment status and ensures real-time updates. If there are any delays or issues with the shipment, you will be notified immediately, allowing you to manage any potential problems proactively.

Step 14: Monitor and adjust rules

Once you've set up automation software for tasks like pricing, inventory, and order processing, it's essential to regularly monitor its performance and make adjustments as needed. 

Automation tools are powerful but work best when fine-tuned to your business needs and market changes.

Automation tools work based on the rules and strategies you set. However, market conditions, competitor behavior, and customer demand can change over time. 

Regular monitoring ensures that your automation strategies align with your business goals and adjust to market shifts.

One Thing You CAN’T Automate 

While automation can streamline most of your Amazon dropshipping business, customer service is one area that still requires a human touch. 

Providing excellent customer service is crucial for keeping your ratings high, building trust, and encouraging repeat customers. 

However, it simply can’t be fully automated because it involves understanding and responding to real customer needs and concerns.

Why should you improve customer service? 

Amazon values seller ratings and customer feedback. If customers feel ignored or unsatisfied, they’ll leave negative reviews, which can hurt your reputation, sales, and chances of winning the Buy Box. 

Friendly, helpful, and timely responses are essential for keeping your customers happy and your ratings positive.

Here’s what you can do to improve customer service:

✅ Respond quickly: Fast, thoughtful responses show customers you care.

✅ Be upfront: Keep your customers in the loop about any delays or problems with their orders. 

✅ Handle returns carefully: Personally managing returns and refunds ensures a smooth process and reduces the chance of unhappy customers leaving negative feedback.

✅ Make it personal: While you can use templates for common questions, always add a personal touch to your replies. Customers appreciate knowing someone is really listening to them. You can still use automation for basic tasks like sending order updates or follow-up emails, but you should be responsible for anything that involves resolving issues or answering more complex questions.

Final Thoughts 

You’ll streamline operations and unlock growth potential by automating your Amazon dropshipping business. 

With Spark Shipping’s Amazon Automation Dropshipping Integration, you can:

• Automate product uploads
• Sync real-time inventory updates
• Adjust pricing automatically
• Automate order fulfillment
• Provide instant tracking updates

Plus, Spark Shipping works with any vendor, supplier, or marketplace, including Amazon’s global marketplaces like Canada, the UK, and more. 

Want to see how it works? Try a free demo today and see how easy it is to take your dropshipping to the next level. 

Add Spark Shipping through the Amazon App Store and start automating with just a click!

FAQs

What is Amazon dropshipping?

Amazon dropshipping is a business model where you sell products on Amazon without holding any inventory. When a customer places an order, you purchase the item from a supplier who then ships it directly to the customer. You handle customer communication and keep the profit margin from the sale.

Why should I automate my Amazon dropshipping business?

Automating your dropshipping business saves time, boosts efficiency, and helps scale your operations. Automation handles tasks like inventory management, order processing, pricing adjustments, and order tracking, allowing you to focus on marketing and customer acquisition.

What are the benefits of Amazon dropshipping?

Benefits include low startup costs since you don't need to invest in inventory upfront, a wide product selection without worrying about storage, and scalability as suppliers handle inventory and shipping logistics.

What challenges might I face with Amazon dropshipping?

Challenges include compliance risks due to Amazon's strict policies, supplier reliability issues affecting customer satisfaction, thin profit margins due to competition and fees, and the responsibility of managing customer service and returns.

What is dropshipping automation software, and how does it help?

Dropshipping automation software streamlines your business by automating product importing, inventory management, order fulfillment, price monitoring, and order tracking. It reduces manual workload and errors, allowing you to focus on growth.

What aspects of my Amazon dropshipping business cannot be automated?

Customer service, strategic decision-making, and personal interactions cannot be fully automated. They require human judgment and a personal touch to manage customer relationships and business growth effectively.