Dropshipping vs Amazon FBA – Ecommerce refers to buying and selling of the products or services through the internet. We are living in the times where E Commerce has grown massively. Moreover, the pandemic of 2020 has caused the world to depend entirely on Ecommerce showcasing the importance of business solutions for people.
Ecommerce has been considered as the most profitable business niche. Also, It has its perks and almost every entrepreneur these days has been involved in taking benefits from it.
The two most beneficial and fast-growing business models in eCommerce are Amazon FBA and Dropshipping.
Specifically, the unbiased and brutally honest truth is that both platforms are excellent. It is entirely up to you to make a deep analysis and evaluate both business solutions to decide which will be the best for you.
In this blog post, we will explain to you the entire concept of Dropshipping and Amazon FBA. We hope that it will help you out in choosing which one is best for you and which one you should choose to begin your entrepreneurial journey.
This post aims to provide you enough knowledge on both platforms where you feel you can choose and continue in that direction.
WHAT IS DROPSHIPPING?
Dropshipping is an excellent e-commerce solution where you as a retailer directly place an order with your vendor, typically any wholesale company. After you have dropped the order of the product and provide them the details of your customer, they will ship the item directly to your customer.
Dropshipping is one of the most easiest retail business that is cost-effective and convenient. In the USA, UK, Canada, and Europe dropshipping has been popular for many past years now. The best thing about dropshipping is that it does not require large investments. Therefore, even low-scale traders can get benefits out of this eCommerce solution.
WHAT IS AMAZON FBA?
Amazon FBA (Fulfillment By Amazon) program is a great opportunity for entrepreneurs who cater to a large audience. Also, it is considered the most ideal eCommerce business solution and it is known for its remarkable scalability.
This program offers warehousing as well as shipping services for your items or products. FBA has a unique approach because Amazon deals with the huge market for popular products. These products are also eligible for great shipping promotions, that is, Free Super Saver Shipping as well as Amazon Prime. These offers make FBA more beneficial.
Dropshipping vs Amazon FBA
We are going to give you the details of the pros and cons of both the business solutions. You will be able to decide which one to choose.
Dropshipping
Read the details below for the advantages and disadvantages of dropshipping.
- Less Investment
It does not require a big amount of capital for starting. It saves you from huge initial investments which might be a burden for you as a huge businessman.
- Less Responsibility
Once your customer has placed an order, you will book that order with your supplier. Your supplier will prepare the order, pack it, and ship it to the customer. The supplier will also handle the returns from the customers.
- Negligible Risks
As a dropshipping business owner, you don’t need to maintain an inventory stock. If your transaction is not great there is still no loss. The only expense you require is to start and maintain your online store.
- Multiplicity
Moreover, Dropshipping vs Amazon FBA- the higher the diversity of products, the higher sales are possible. Make sure you have 4 to 5 products in larger quantities to generate good profits.
- Time-saving
It is the most important aspect of dropshipping. Every business requires time and dedication. But in dropshipping, you have an edge of not being indulged in packing, shipping, or managing an inventory. This makes it the most ideal solution for young entrepreneurs who are concerned about saving their time.
- Location
Also, You can smoothly run the operations of your business from anywhere by the online shopping store by just keeping in touch with your suppliers and customers. Dropshipping does not force you to remain static and work from office only.
- Less Profit Margins
The returns in terms of revenue are comparatively less. You cannot have too many profits on the products as there might be other people dropshipping the same product at different prices.
However, there are some dropshipping products out there in the market that can generate higher profits. You can look for them and choose accordingly.
- Scant Information
There are chances that your supplier may not provide you with the complete details of the product. Therefore, there are higher chances for you to not be able to answer all the queries from your customers about the product they might be interested in.
Amazon FBA
Read the details below for the advantages and disadvantages of Amazon FBA.
- Time to Focus and Scale
Amazon takes care of the packaging and shipping process for you. It also provides excellent customer services. Therefore, there is nothing left for you to do and you will have a lot of time to focus on scaling your business.
- Successive Goodwill
It allows you to establish your brand name for yourself. You will get all the brand recognition you need from Amazon. But, It is quite easy and your online store will be able to scale effectively.
- Larger Customer Base
Creating a customer base is usually a tough job for almost every entrepreneur. Fortunately, the Amazon FBA program will give you access to their massive customer base and you can extract results anytime you want.
- Better Profits
So You can sell products at higher prices on Amazon. The credit goes to the brand image of Amazon.
- Returns and Replacement policies
Customer service is the priority task of Amazon FBA. It will give you a chance to maintain loyal customers. You don’t have to worry about anything be it shipping, packaging or customer queries.