A Glossary of Amazon Dropshipping Terms for Beginners

Entering the world of Amazon selling can be overwhelming with its countless terms and acronyms. This article will explain the most important concepts you need to know.

Understanding the terminology is the first step to success.

To do business effectively on Amazon, mastering the platform's 'language' is a prerequisite. Below is a list of terms you will frequently encounter.

A business model where you sell products to customers without holding inventory. When an order comes in, you purchase the item from a third party (a supplier), and they ship it directly to the customer. Amazon has a very strict policy on dropshipping, requiring you to be the seller of record and responsible for the product.

A 10-character identification code created by Amazon for each product on their site. Each product has a unique ASIN.

With FBA, you send your products to Amazon's fulfillment centers. Amazon stores, packs, ships the products for you, and handles customer service. This is the most common way to get the Prime badge.

With FBM, you are responsible for storing, packing, and shipping products directly to the customer. You have full control over the process but must also handle any issues that arise.

This is the 'Add to Cart' box on a product detail page. Since multiple sellers can offer the same product, 'winning the Buy Box' (meaning when a customer clicks the button, they buy from you) is extremely important. Influencing factors include price, stock status, shipping speed, and seller ratings.

A key metric in Amazon advertising (Amazon PPC). It's calculated by dividing total ad spend by total ad revenue. The lower the ACoS, the more effective your ad campaign is.

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