Selling online offers exciting opportunities for earning a healthy income. A 14-year-old boy in London currently earns more than $30,000 per month from his dropshipping store.
You also have options in how you want to do it. Would you instead use dropshipping or FBA? What’s the best choice for a beginner who is just starting to sell online?
Let’s get into the dropshipping vs FBA debate now.
WHAT IS DROPSHIPPING?
You set up an online store but you don’t need to hold inventory yourself. Instead, you, the retailer, find a supplier you want to partner with. They’ll make or store the products (sometimes both), and ship them to the customer.
That means you never need to hold any stock, handle shipping, or deal with returns. It’s easy to get started, and set-up costs are low.
The downside is that you’ll make less profit on items, and you’re still liable if something goes wrong. Even if the supplier deals with dispatch, your brand is still the ‘face’ of the store.
WHAT IS AMAZON FBA?
It’s also known as Fulfilment by Amazon. You send Amazon your products, and they’ll fulfill orders from their warehouse. They introduced this offer back in 2006.
Unlike dropshipping, you need to find a supplier unless you make products yourself. Buy your products and pay the supplier to send them to Amazon’s warehouses.
You’re already hit with two investments here—first, in the products and then paying for warehouse storage.
If you do make your own products, getting them onto Amazon can earn you excellent visibility. You can also make better profits, and you get to plug into Amazon’s massive customer base.
DROPSHIPPING VS. FBA: WHICH IS BEST?
You only really need to ask yourself one question. Do you want to spend money buying stock that you might not sell? Or do you want to sell inventory someone else holds?
At its core, the question asks you how much you’re willing to risk. If you’d rather start selling online with less risk, choose dropshipping.
You don’t need physical premises or stock. Run your store with nothing more than an internet connection and a laptop.
Yes, there are still risks associated with dropshipping. Choose your supplier with care, and you’ll minimize a lot of those risks.
On the other hand, if you’ve chosen a popular niche and you know how to market your store, Amazon FBA offers excellent profits.
Like dropshipping, you don’t need to deal with shipping and dispatch. Amazon FBA gives you the chance to build your brand on Amazon.
WHICH WILL YOU CHOOSE?
Now that we’ve covered the dropshipping vs. FBA debate, you’ll have a clearer view of which one to choose.
FBA does have advantages, like giving you access to Amazon’s customers and tactics like lightning deals. That said, you need to invest a lot more upfront with no guarantee you’ll earn it back.
Dropshipping offers less risk, which means you can try it out without such an investment. That makes it the better choice for beginners while you figure out what works.