Dropshipping Vs FBA – Which one is Better?
Dropshipping Vs FBA, the world of eCommerce is the future. People are investing more time and resources to build a stable and steady online business. There are many opportunities waiting to be taken by someone. There are numerous areas that you can invest in and start your own business. Dropshipping and Amazon FBA should be your primary focus. We will talk about drop shipping, Amazon FBA, pros and cons of both. After we explain the concept in detail, you will be able to make a precise decision. Whether you should choose Amazon FBA or invest your resources in dropshipping.
What is Dropshipping?
In dropshipping the store does not receive the product. The store or shop directly communicates with the third-party sellers upon the customer’s request. Then the third-party sellers or wholesalers directly send the goods to the customers upon receiving the address. So, in dropshipping the shop is not involved with the products.
What is Amazon FBA?
FBA means “Fulfillment by Amazon”. Amazon FBA provides great opportunities for entrepreneurs who want to sell big and score big. In this program, Amazon offers storage and delivery services. The sellers need to store their products in one of the Amazon warehouses. Upon order, Amazon handles the shipping services. It is a very reliable and effective way of doing business.
So, which one would be an ideal choice of an entrepreneur Dropshipping or Amazon FBA? Depending upon the type of business they both have their pros and cons. So, let proceed
Dropshipping Vs FBA – Pros of Dropshipping
After knowing about the risk and advantages, this will help you in deciding the perfect business model to choose for your business.
1. Costs Less
Dropshipping does not need a huge amount of capital. It is a budget-friendly business model and is best for starting a new business.
2. Fewer Complications
When a customer orders something, forward that request to the supplier along with the customer’s address. That’s the simple process of securing an order.
3. Fewer Risks
Dropshipping does not need to store or stock items. When the customer’s order something from your online shop. The suppliers take care of everything. Moreover, there is no loss if something goes a little bit wrong.
4. Growth in sales
When starting a business, securing products to sell is one of the primary concerns. But in drop shipping, all the inventory work is handled by the suppliers. All you have to do is take an order from your online shop and fulfill it. How can it help in sales? Well! As a beginner, if you are securing products for your shop, you would only be able to get a handful. Why? Because a shop has a huge list of products and you cannot buy them all as a starter. Your inventory would be limited.
5. Saves Time
Dropshipping saves a lot of time. There is no inventory management, restocking, shipping, or product making. All of these things cost a lot of time. But in dropshipping, a lot of time is saved.
6. Requires no personal Business Space
You don’t need a huge building or a warehouse to operate dropshipping. The only thing necessary is to be in touch with the customers and suppliers.
Dropshipping Vs FBA – Cons of Dropshipping
Not everything is perfect. The dropshipping might be near to perfect but it does come with its fair share of disadvantages.
- Less information on the products
- Hard to get promotions and good deals
- Fierce Competition
Dropshipping Vs FBA – Pros of Amazon FBA
In Amazon FBA, the shop needs attention, customer care, and restocking. All these factors are not included in the Amazon FBA. Amazon FBA only provides easy shipping and storage services.
1. Potential Growth is Possible
Taking care of all the packing and shipment leaves the sellers to focus more on the shop. They can build new strategies and start campaigns to advertise the product. This increases the rate of sales and profits. Therefore, you can scale the business efficiently.
2. Brand Fame
Amazon FBA also focuses on building a good reputation for your brand. So, you don’t have to work day and night to get recognition from the people.
3. Millions of Customers
Amazon is flooded with customers as well as sellers. So, the shortage of customers is out of option. Sellers gain a lot of attention and sales on Amazon. Especially, sellers with unique selling techniques and products. The flashier you are, the more sales you get.
4. Easy Refund Policies and Returns
Amazon offers hassle-free refunds and is easy. When there is a return in process, Amazon takes care of everything. The items arrived exactly at the same place they left.
5. Higher Profits
With a huge customer base and flexibility in selling options, on Amazon, you can make high profits. if you sell on Amazon, you are more likely to make more profit than selling individually or out of Amazon’s base.
Dropshipping Vs FBA – Cons of Amazon FBA
Unlike Dropshipping, the cons of Amazon FBA are quite great in comparison but not as a whole.
- Inventory has no records or proper documentation
- Competition is crazy due to over-saturation
- Not everything will make a profit
- Amazon FBA has a strict policy for safety. Combustible items are not allowed.
- Amazon does not offer direct contact with customers. Customers are only reachable by the seller.
- Amazon FBA costs more
Dropshipping Vs FBA, a simple and direct comparison. After knowing the pros and cons of both business models and analyzing your own requirements. Now, you can decide whether dropshipping suits you the best or Amazon FBA. Amazon FBA does tend to be more advantageous because of the services. Similarly, you can make a passive income source with it. New sellers might have a difficult time securing the Amazon FBA. If the budget to avail FBA is available then there’s no better choice.