Dropshipping or Amazon FBA; which is better?

Dropshipping is an ecommerce business model where a merchant markets a product he doesn’t have in stock, he then fulfills the product orders through a third party supplier. 

You can dropship on Amazon as an FBM seller, dropship on Shopify, Woocommerce, Ecwid or other ecommerce marketplace or platform.

Amazon FBA is an ecommerce business model where a merchant buys products in bulk, lists the products on Amazon and ships the products to Amazon fulfillment center, then Amazon delivers any orders to their customers.

Amazon also handles return and customer service.

None of these two ecommerce businesses is necessarily better than the order. It depends on what you want and what stage you are in your ecommerce journey.

I recommend dropshipping if you are a beginner to ecommerce, you haven’t retailed any product online to be sure that it’s a good seller, you don’t have marketing skills, product research skills, web design or other skills necessary to running an ecommerce business.

Dropshipping is the better option when you’re an ecommerce beginner and you’re working on a tight budget 

I recommend Amazon FBA if you have a larger budget, this is because you need to purchase products in bulk and send them to Amazon fulfillment center. 

whereas, for Dropshipping you don’t need to bulk order products as orders will be fulfilled by your dropshipping supplier.

Amazon FBA is the better option when you’re not a beginner to ecommerce. You’ve already retailed products online, you know what products are good sellers and you have ecommerce skills.

This is because, despite the fact that Amazon has a high conversion rate, if you bulk purchase products and send them to Amazon fulfillment center but they turn out not to be good sellers and do not get orders.

You’ll either keep paying FBA fees to Amazon for warehousing your product or Pay Amazon to return the product back to you.

So, the best option when you’re just starting out, is to do dropshipping. This model will enable you to start an ecommerce business with a low budget, test products, gain ecommerce skills and make money online. 

Once you have validated your product and gotten consistent traction on your website then that’s a good time to bulk order the product and ship it to Amazon Fulfillment center as an FBA seller or ship them to other third party Fulfillment  centers.

I do believe that dropshipping is not a sustainable business model in the long term. I only think of it as a means to an end. That’s a means to validating a product and marketing strategy on a low budget before investing on Amazon FBA or other 3PLS.

The icing on the cake is that you also get to learn ecommerce skills and make money online by dropshipping.

You can take our free dropshipping course to learn dropshipping from A-Z.

I hope you find this answer helpful, if you have any questions, please leave a comment and we’ll respond shortly..

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