Dropshipping V/S Amazon FBA – Which Is Best ?
There are two main fulfillment methods available when selling goods on Amazon: Fulfilled by Merchant and Fulfilled by Amazon (FBA) (FBM). With FBA, Amazon will take care of order fulfillment and storage for you. With FBM, order fulfillment and storage are handled by you (or a third party). Dropshipping is categorized under FBM.
What Is FBA?
Fulfillment by Amazon, or FBA for short, is a service that Amazon offers to take care of all sellers’ storage, order fulfillment, returns, and customer service needs. FBA is by far the most popular fulfillment option. FBA is a great way to manage your Amazon business, regardless of whether you sell private label products or resell products through retail arbitrage.
Advantages Of FBA
Discounted shipping rates for simple shipping and logistics Management Management of Customer Service Quick Delivery More Storage Omnichannel Fulfillment
Disadvantages Of FBA
Increased Returns Product preparation requirements Long-term storage fees Amazon FBA Fee
What Is Dropshipping?
Dropshipping is when a seller posts a product for sale online and arranges for it to be shipped from a manufacturer or supplier without first spending on any inventory. Drop shipping is a popular business strategy among sellers on Amazon and other e-commerce marketplaces because it is simple to get started and doesn’t require a sizable initial investment.
Advantages Of Dropshipping
Low initial expenses Suitable for starters
Disadvantages Of Dropshipping
Competitive chances of slow delivery no control over product quality
Criteria To Be Considered While Choosing The Fulfillment Type
As you can see, each approach has definite advantages and disadvantages. Even though dropshipping and Amazon FBA are roughly similar, choosing one over the other doesn’t ensure a smooth journey because both demand ongoing effort and attention from the seller. You should take both your individual and professional circumstances into account. Dropshipping offers a very low-risk business strategy without the requirement for an upfront investment for those just starting out in e-commerce. Dropshipping may be the best option for you if you don’t like taking risks and want to try out an e-commerce business. Amazon FBA and the significant leverage you’ll gain through Amazon’s existing audience is a huge bonus if you have money to invest and are more willing to take a risk. Even while investing a large amount of money into Amazon FBA does not ensure success, it is a viable alternative if you currently have an online store and want to expand it. Given how Amazon FBA works, you can focus on marketing your company and products.
It’s not an easy decision to make. However, deciding between dropshipping and Amazon FBA will ultimately depend on how much money you can invest and how much risk you are willing to accept. So, consider the following: Are you prepared to put your money into stocks that might or might not be sold but provide you the chance to establish a brand and make substantial profits if you choose the correct product? Do you want to make a small to the no-risk sale of some other person’s inventory, but maybe make less profit on these highly competitive goods? Which option you choose between dropshipping and Amazon FBA will depend on the answers to these questions. Whichever option you select, you must handle it seriously because both Amazon FBA and the dropshipping model require labor to both get started and be successful.