fulfillment by amazon
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 Fulfillment by Amazon or Dropshipping: Which Should You Choose in 2021?

Fulfillment by Amazon: THIS POST MAY CONTAIN AFFILIATE LINKS. PLEASE READ MY DISCLOSURE FOR MORE INFO. I GET COMMISSIONS FOR PURCHASES MADE THROUGH LINKS IN THIS POST AT NO ADDITIONAL COST TO YOU. This helps me to continue providing content to my readers.

Are you wanting a big slice of the eCommerce pie going into 2021? Not sure whether to choose Fulfillment by Amazon or Dropshipping?

Did you know that in 2020 alone there were 227.5 million online shoppers in the U.S?! It’s projected to rise to 2305 million people in 2021, and 278.3 million in 2024.

In this article, we’ll dive into a comparison of fulfillment by Amazon (FBA) and dropshipping for you to decide what’s right for you. Read on to discover the pros and cons of each and learn which is the right choice for you to earn money online.

Alternatives

If you decide that you’d like to get started today and don’t want to use Shopify for dropshipping you can use WordPress and WooCommerce. You can set up your WordPress with a few clicks, you can check out this article on setting up your hosting.

You can sign up for Bluehost for as little as $3.95 per month, or SiteGround for a bit more than that but you’ll receive backup for your website included!

What Is Fulfillment by Amazon?

Whether you’re choosing fulfillment by Amazon (FBA) or dropshipping, they’re both an e-Commerce business model. E-Commerce means that you can make money online with it.

With fulfillment by Amazon, you don’t have to worry about shipping, storing, or packing. You don’t have to worry about stacking items in your home since Amazon will take care of that.

When a customer makes an order, then Amazon will fulfill and deliver it. Instead of having to worry about which platform to use, and how to send traffic to your page, you’ll instead use Amazon’s platform.

How to Start?

First, you’ll need to sign up for an account through Amazon. Keep in mind that this costs money.

Along with this, you’ll be paying for the fulfillment process.

Next, you’ll need to find a dropshipping supplier. This is who you’ll get the products from. From here you can decide what products you’ll want to sell.

After this is done, you’ll create your inventory, and list your products. When someone buys a product, then Amazon will fulfill the order.

What Is Dropshipping?

The definition of dropshipping is where you don’t have inventory. You have someone else send the product to your customer.

How it works:

The customer will place an order on your site

You’ll then order the product to be sent to the customer

The supplier will send the product to your customer

No having to worry about storing the items or making them from scratch which saves you time. Dropshipping on your own platform can be a lower priced option than fulfillment by Amazon. Keep in mind that if you’re not doing FBA, then you’ll need to produce your own traffic.

Getting Started

In order to get started with dropshipping you’ll need to either use a platform such as WordPress for hosting or Shopify. Shopify is considered the leader in dropshipping so they’ll have plenty of resources to check out.

If you decide to use a hosting platform, I highly recommend SiteGround and with that, you can use WordPress. WordPress is great for SEO(search engine optimization). On WordPress, you can use WooCommerce to set up your store!

In order to drive traffic you can use social media posts, social media ads, and writing blog posts.

Investment Risks

Keep in mind that Amazon FBA is a higher risk since you’ll need to pay for an account, fulfillment, storage, and other fees. You can choose to opt out of fulfillment by Amazon and handle all of the shipping yourself to save money.

Fulfillment by Amazon costs more than traditional dropshipping as well. You have a higher profit margin with FBA than dropshipping though, and they’ll do the work such as sending out the items.

Pros of Dropshipping

You don’t have to invest as much. That means when you’re just starting out online, you won’t have to put as much into your business. When you’re just starting out, it’s a less risky option and you won’t lose thousands of dollars as easily as Amazon FBA.

Autonomy

It’s on your website so you have the freedom to do what you like for your business. You don’t have to worry about waking up one day and your business being shut down.

Cons of Dropshipping

Lower Profit Margin

Keep in mind that even though you’re getting the item for less, the profit margins will be smaller. Your customers can search online for a lower deal if you try to charge a ridiculous price.

Customer Service

If you choose to go with the traditional dropshipping route then you have to do customer service yourself. That means people screaming for refunds, asking for discounts, etc.

Competition

The competition is high with dropshipping. There are already many people trying their hand at dropshipping since it’s a lower investment. You’ll be competing with others who might offer free shipping or different deals.

Pros of Amazon FBA

You can focus on your business! Instead of having to worry about fulfilling orders, you can keep track of analytics, promoting your brand, etc.

Large Customer Base

You’ll get access to Amazon’s traffic. Amazon is one of the top places people search for products online. You don’t have to worry about building up your customer base.

Returns Handled by Amazon

Don’t feel like dealing with karen yelling at you? Amazon’s customer support will handle returns and shipping.

Cons of Amazon FBA

High Competition

There are many who are trying to make a name for themselves on Amazon FBA. It costs a fair amount to start and then you have to hope that you can stand out.

Not Autonomous

If you don’t abide by Amazon’s rules or they don’t like something about your store, they can shut you down in an instant. It’s only fair since it is their platform that you’re using. Think about the fact that you can put thousands of dollars into your business and make a name for yourself, and then it gets shut down.

Which to Choose?

Deciding on choosing between traditional dropshipping vs fulfillment by Amazon might seem confusing. I highly recommend writing down on a piece of paper the pros and cons for each.

Keep in mind that if you’re just starting out and don’t have much money to invest, then you’ll want your own platform, at least initially.

If you decide to try out Amazon, you can still have your own site. You can send your business cards with products on Amazon to have customers remember you and encourage them to buy from your site.

Fulfillment by Amazon or Dropshipping: Which Should You Choose in 2021?

Now that you’ve explored all about Fulfillment by Amazon vs dropshipping, you should have a better idea which is the right choice for you.

Would you like to read more content about making money online? Check out my other articles!

Are you interested in a low-investment business you can get started today? Sign up today for my free 7-day course on starting a blog!

It’ll be delivered right to your email.

You’ll learn how to start a blog

Choosing your niche

Monetization ideas

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And much more! It’s free to sign up and access the course!

Fulfillment by Amazon: THIS POST MAY CONTAIN AFFILIATE LINKS. PLEASE READ MY DISCLOSURE FOR MORE INFO. I GET COMMISSIONS FOR PURCHASES MADE THROUGH LINKS IN THIS POST AT NO ADDITIONAL COST TO YOU. This helps me to continue providing content to my readers.

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