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The Difference Between Amazon FBA and Amazon Dropshipping

21 Jun 2020 Developer News
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Amazon has really grown since its launch. What started in the garage of Jeff Bezos selling books, has grown into a multi-million company selling almost everything you can think of including professional services. Amazon has its presence in almost every market there is. Back in 2019, it has an estimated 150.6 million mobile users accessing the application. It also has services for individual sellers such as Amazon dropshipping and Amazon FBA (Amazon Fulfillment-by-Amazon). Due to its immense popularity, Amazon has become a great platform to start your business with. They are also known for their excellent customer service and there are a lot of materials on the internet you can read if you are new to Amazon. Their services are not free, though. If you are an individual seller, you might need to read on their subscription plans and assess which one will benefit you and your business the most. You can read reviews about Amazon FBA and Amazon dropshipping in a lot of forums so make sure you did your research before committing to a plan.

What is Amazon FBA

Amazon FBA (Amazon Fulfillment-by-Amazon), as the name suggests, fulfills the customer orders for you. You will need to send your products to their warehouse and let Amazon do the magic. Your products will be available on their platform and customers can purchase from there. Amazon will do the packing and shipping and handles the entire transaction as well. Sales transactions are automated; therefore you will just need to wait for the sales to be sent to your bank account. Part of the Amazon FBA service is notifying you when your stocks are low. It is your responsibility to make sure that there are enough stocks of your products in their warehouse. Other than that, it is also your responsibility to promote and market your items.

What is Amazon Dropshipping

Amazon dropshipping, on the other hand, does not require you to send stocks to their warehouse. What you need to do is find a third-party supplier for your products and then have them pack and deliver the items to your customers. Your products will not go into an Amazon warehouse or even your own warehouse. It will come directly from the supplier to the customer’s doorstep. Unlike Amazon FBA, you will not need to pay for bulk of stocks. You will only pay the supplier for the items once a customer has placed an order. You need to be aware that since the items will not be sent to you for quality assessment before it is sent to the customer, that there is a probability that the item may be defective or substandard.

Which One is Better?

It depends on your game plan. Long time Amazon sellers suggest using Amazon FBA instead of Amazon dropshipping because the profit is higher. But this means you will need to shell out a huge amount of money to buy stocks of your product. We suggest you read on Amazon FBA and Amazon dropshipping further and suggest which of the two services will fit your budget and will help your business grow.

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