Drop Shipping on Amazon

Drop shipping means that a seller does not stock the product in their own warehouse, but passes the order to their supplier so that the product is sent directly from there to the customer. This model is not banned on Amazon; however, Amazon allows drop shipping only when certain conditions are met. Sellers who go beyond these conditions receive a "Drop Shipping Policy violation" notification, and as the violation becomes more serious, suspension of the account may come into play.

In this article we explain in plain language the essence of Amazon's drop shipping policy, the most common violations, the real advantages and risks of the model, and the steps you can take to protect your account.

The essence of Amazon's drop shipping policy

In short, Amazon's policy says this: your supplier can ship the order, but in the customer's eyes and in Amazon's records, you must be the seller. Four conditions are required for this:

• You are the seller of record: As the party selling the product to the customer, you carry the responsibility. This must also be clear in your arrangement with your supplier.
• Only you appear on the delivery documents: The package label, invoice, packing slip, packaging and package inserts must not contain the name, logo or contact details of any seller, retailer or supplier other than you.
• You accept and process returns: Customer returns cannot be left to your supplier; responsibility for the return process lies with the seller.
• You comply with the other policies: Compliance with the seller agreement and all of Amazon's policies, such as those on products, pricing and shipping, continues.

Amazon updates the policy text from time to time. For the current, official version, rely on the help page in Seller Central.

The most common violations

• Buying from another online retailer and having that retailer ship: Buying a product from a store or marketplace and having it sent to the customer in that store's own branded packaging and with its invoice is one of the main practices Amazon does not accept.
• Leaving traces of the supplier on documents: Removing the supplier's name from the invoice is not enough on its own; if another company's details are on the bag, label, box, leaflet or price tag, the violation continues.
• Directing returns to the supplier: Giving the supplier's address as the return address, or making the customer deal with the supplier.
• Keeping out-of-stock products live: A listing staying open even though the supplier has run out of the product leads to cancellations and late shipments.
• An unchecked supplier: The product sent by the supplier not being authentic or not matching the description on the product page.

The advantages of drop shipping

• Low starting capital: Since no stock has to be bought in advance, the investment stays small.
• No warehouse or inventory burden: The supplier takes on tasks such as storage, packing and stock counts.
• A wide product range: You can try new products without taking on stock risk and easily drop the ones that do not sell.

The real risks

• Supplier reliability: Shipping speed, product quality and packaging are in the supplier's hands, but you are the one responsible to the Amazon customer.
• Stock and timing control: If the supplier reports stock incorrectly, the order is canceled; if shipping is delayed, your late shipment rate suffers.
• Thin profit margins: Because many sellers can sell the same product from the same supplier, price competition is fierce.
• Customer complaints: Every damaged, incomplete or late product counts against your account health.

Checklist to protect your account

1. Make a written arrangement with your supplier. Put in a contract or in writing that the product will be shipped in your name, with your business details.
2. Order a sample. Place an order to your own address and check the outside and inside of the package, the invoice and any inserts; there should be no trace of another company.
3. Manage the returns process yourself. Keep the return address and the steps for accepting returns under your own control.
4. Automate stock sync. Have your listing close when the supplier runs out of the product, so your order cancellation rate does not suffer.
5. Enter a realistic handling time. Upload tracking information on time; otherwise you will run into late shipment problems.
6. Document authenticity. Ask your supplier for invoices and authorized seller documents and keep them; you will need them in a possible authenticity complaint.
7. Monitor Account Health regularly. To catch warnings early, check the Account Health page weekly.

If you have received a warning because of drop shipping

First note the ASIN and order examples mentioned in the notification; Amazon assesses the violation through these examples. Then identify the root cause of the problem honestly: did the supplier ship in its own packaging, did another company appear on the documents, or was the returns process left with the supplier? In your Plan of Action you need to write, in concrete terms, the root cause, that you have corrected it and the measures you have taken so that it does not happen again. Our guide How to write a Plan of Action explains these three sections in detail.

Using your right to appeal without preparation can make your next submission harder. Strengthening your plan first is usually the better course.

Frequently asked questions

Is drop shipping banned on Amazon?

No. Drop shipping is allowed if you are the seller of record, only your details appear on the documents and you manage returns.

Can I buy from another marketplace and have the product sent directly to the customer?

No. Another online retailer shipping the product directly to the customer under its own name is one of the practices Amazon does not accept.

Is it enough to remove the supplier's name from the invoice?

No. The package label, packaging, leaflets and any additional documents must all be free of another company's name or contact details.

Who accepts customer returns?

Responsibility for returns lies with the seller, that is, with you. Using your supplier's warehouse address as the return address is risky.

If your account has been suspended because of the drop shipping policy, or you want to have your risk checked in advance, see our Drop Shipping Policy Violation service or book a one-to-one meeting with Orçun Uyar. If you need a tool, you can also read our article SellerRunning for drop shipping sellers. You can find the overall picture of why accounts are closed in our article Why does Amazon suspend accounts?