Amazon announced on the seller's end to update the platform's delivery policy and further regulate the delivery standard of dropshipping sellers at the beginning of 2021. This is a nightmare for cross-border online business owners who mainly focus on dropshipping.
Amazon's new policy
This lengthy policy can be summed up with only three sentences. To ensure the user experience, Amazon strictly prohibits the following 3 direct delivery methods:
● Lack of record on the shipment to identify the seller
● Any retailer's tag, excluding the seller, appears on packing slips, invoices, or external packaging
● Information of seller on packing slips, invoices, external packaging, or elsewhere of the order does not match the original seller's information
In other words, when using the dropshipping model, the seller must ensure that he/she is always the seller on record, and any information that can be seen by consumers, including the names, logos, and labels, must be his/her own and without any incorrect information.
Impact of the new policy on dropshipping
But it is known that dropshipping is a retail fulfillment method where a store doesn't keep the products it sells in stock. Instead, when a store sells a product using the dropshipping model, it purchases the item from a third-party seller and has it shipped directly to the customers. As a result, the seller doesn't have to handle the product directly and make profits from the difference in costs. In most cases, the third-party sellers in this model are often manufacturers, and this is when the problem occurs for the information of their brands will inevitably appear on the packaging of the goods.
It is an inevitable choice for Amazon to issue the new policies. Dropshipping doesn't reflect well in terms of product quality, logistics efficiency, and user experience. It may even affect the user experience on Amazon and harm the platform ecology. To maintain users' favorability, Amazon's new self-delivery policy excludes dropshipping in a way.
However, as for the sellers who have already started cross-border dropshipping business, the new policy cannot possibly put an end to their career. And there are two solutions for these sellers:
First, when you have enough shipping orders regularly, it is easy to make deals with the supplier. Then you can ask the supplier to modify the packaging without any information about its brand on it. But you are very likely to pay for the extra labor costs incurred.
Second, when your order quantity is relatively small, the supplier may not be willing to cooperate with you. In this case, to avoid violations, you must check the parcels and remove the supplier's trademarks or information before sending them out. You can either have the supplier send the goods to you first, and then deliver them to the consumers, or add more personnel for delivery and inspection at the supplier's location. Whether it is to increase the delivery process or increase the number of inspectors, the extra money incurred is quite considerable.
However, with a low threshold and the small capital needed for starting up a business, the dropshipping model is regarded as a quick start-up method for cross-border e-commerce business. As the new policy issued, sellers on Amazon have to pay more, and the advantages of dropshipping are not so salient. What's more, the freights of some products with low unit prices are higher than the product cost. Whether they should continue their businesses become a question for Amazon dropshippers.
The dropshipping model is not only adopted by Amazon; it is very common in the eCommerce industry. Through the SaaS platform, you can build an online store without any restrictions. As long as you select the product and find a suitable supplier, you can quickly start a cross-border business. With Amazon's policy being stricter, the independent website is undoubtedly a new way out for dropshippers, for instance, Shopify. If you still want to stick with the marketplace, eBay is another option.
CJdropshipping (CJ) is a China-based one-step service platform that provides all kinds of services specifically designed for dropshippers, for example, product sourcing, automatic process processing, shipping and customized products, etc. CJ is perfectly connected with eBay, Shopify and other online shopping platforms for the sake of dropshippers. Even if Amazon stops you from syncing orders to CJ's platform, you could still achieve it with other platforms. Furthermore, CJ can be the answer to keep your dropshipping business running. CJ will purchase the products you want from third-party suppliers and let them ship the products to CJ warehouses. After products pass the quality inspection, CJ will then use its own special shipping methods to ship the parcels out. By switching platforms, Amazon's no longer the barrier. You can find more strengths of CJ here.
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