Amazon isn’t killing dropshipping. Amazon is an e-commerce marketplace whereas dropshipping is a fulfillment model. Although Amazon FBA stores is a huge competitor for Shopify and Amazon FBM dropshippers, the dropshipping fulfillment model is still profitable in 2021.
What is Dropshipping?
Dropshipping is an e-commerce logistics and fulfillment model whereby a dropshipper lists and markets products on an e-commerce store and product orders are fulfilled by a third party supplier.
The dropshipper does not keep inventory of the product he markets but has an agreement with a dropshipping supplier who ships product orders to his customers .
What is Amazon dropshipping?
Amazon dropshipping, is an e-commerce business fulfillment model whereby Amazon sellers (FBM sellers) do not keep inventory of their product but have a supplier/dropshipping partner who ships the product to the customers whenever the dropshipper receives orders on Amazon.
Amazon’s policy is strict about dropshipping! There are do’s and don’t when it comes to Amazon drop shipping! It advisable to read and understand Amazon policy before dropshipping on Amazon or selling under the FBA program!
It’s better to be well informed than to be ignorant and kicked out of the Amazon seller program for policy violation reasons. You can read our article on Amazon dropshipping to learn more about dropshipping on Amazon!
Amazon FBA vs dropshipping
Amazon FBA which stands for “fulfillment by Amazon” is an Amazon seller program whereby FBA sellers purchase products in bulk and send them to the Amazon fulfillment center.
Amazon ships customers orders, handles returns and customer support and then remit the store’s earnings to the Amazon seller.
However when dropshipping on Amazon, it can’t be conveniently done via Amazon FBA program! Amazon dropshippers usually go for the Amazon FBM program.
“Fulfillment by Merchant ” Amazon program allows the merchants to fulfill others by himself or his team, therefore an FBM seller can convienently dropship on Amazon since he doesnt have buy and send products to the Amazon fulfillment center. You can learn more about FBM vs FBA.
Advantage of Dropshipping model over Amazon FBA;
- Cheap to start; the dropshipper doesn’t have to buy products in bulk, ship products to Amazon warehouse or pay Amazon FBA fees This makes dropshipping under Amazon FBM or under other platforms like Shopify and Ecwid cheap to start!
- Low risk; if a dropshipper lists and markets a product and discovers that the product is not in demand, he could easily unlist the product and list a new product at no cost to him! However, if an Amazon FBA seller ships a product in bulk quantity to an Amazon fulfillment center and finds out that the product isn’t selling! He’d be at a greater lost because he’d either keep up with the hope that the product would sell and continue paying Amazon warehousing FBA fees, or pay for Amazon to ship the products back to him or pay for Amazon to destroy the products.
Advantage of Amazon FBA model over dropshipping;
- Customer experience; Amazon FBA sellers get to give their customers top notch experience! This is because Amazon handles the shipping, customer support and returns. Amazon guarantees 2 days FBA shipping to its prime customers! However, Amazon FBA sellers pay Amazon FBA fees for these services.
Is fulfillment by Amazon killing dropshipping
Fulfillment by Amazon is not killing dropshipping! Many North Americans trust buying Amazon FBA products and the prime customers love the two days shipping therefore Amazon FBA sellers are a huge competition for dropshippers.
Nevertheless, Dropshipping is still very profitable for Dropshippers selling winning products, on a store that is optimized for conversion with a good digital marketing strategy.
Is Amazon killing dropshipping and is dropshipping shipping dead ?
Dropshipping is not dead. The claim that Fulfillment by Amazon is killing dropshipping is not true. The low entry barrier and low risk involved in dropshipping has made it a very attractive way to start an e-commerce business with low capital and make money online.