Amazon Seller Dictionary

This dictionary is designed to help Amazon sellers quickly understand the most important terms used inside Amazon’s ecosystem.

Dropshipping

Learn the essentials of Amazon Dropshipping, policy compliance, and how to maintain a sustainable supply chain without holding physical inventory.

What is Amazon Dropshipping?

Dropshipping is a business model where the seller accepts customer orders but does not keep goods in stock. Instead, the seller purchases the item from a third party and has it shipped directly to the customer. While it requires low upfront investment, Amazon has strict policies—such as being the seller of record on all invoices and packaging—that must be followed to avoid account suspension.

Key Challenges in Dropshipping

  • Maintaining strict compliance with Amazon’s Terms of Service
  • Managing thin profit margins due to high competition
  • Lack of direct control over shipping speeds and product quality
  • Constant risk of supplier stockouts causing order cancellations
  • Protecting seller feedback and account health metrics
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