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Dropshipping
vs
Amazon FBA
Which Is
Better?

There are many different ways to structure
an eCommerce business. You have
hundreds of marketplaces and eCommerce
platforms to choose from. As you’re
figuring out your business plan, one of the
most important choices is how you will
source products and deliver them to your
customers.
 ECommerce fulfillment is a vital
 component of every successful online
 retail enterprise. In this article, we
 consider the pros and cons of two business
 models that give you a helping hand
 with fulfillment: dropshipping vs
 Amazon FBA.

What is Amazon FBA?

Amazon is the biggest eCommerce
marketplace in the world. Almost one-third
of the US population has an Amazon Prime
account. When you sell on Amazon, you
gain access to a vast consumer
marketplace.

Fulfillment by Amazon FBA, is Amazon’s

fulfillment service for sellers. With Amazon
FBA, you can offer Prime shipping, which will
help you win the
Buy Box.

Amazon FBA lets even small businesses
benefit from a massive logistics operation.
FBA handles warehousing and picks and
packs your orders. All you need to do is ship
your products to Amazon, and FBA takes
care of the rest.

What is dropshipping?

The dropshipping business model lets you
start a business with minimal capital.
You source products from dropshipping
suppliers and list them for sale. You don’t
purchase inventory until you make a sale.
When a customer orders a drop-shipped
product from your eCommerce store.

Dropshipper ships the item directly to
your customer. Only then do you pay for
the product.
The manufacturer or dropshipping supplier
handles warehousing and fulfillment.
In addition, you don’t have to put out
money up front for stock. You only pay
for inventory after the customer has paid
you. This eCommerce model is great for
starting up on a shoestring. However, you’ll
pay a higher wholesale price for each
product, so your share of the profits will
be smaller.