One of the most important decisions that every seller has to make before starting a business on Amazon, is choosing the right business model.
The Dropshipping and FBA business models are popular among Amazon sellers. However, both business models have their advantages and disadvantages. So, if you intend to implement one of these business models, you have to figure out which approach is right for you and your future business. Therefore, first, you have to get answers to all your questions concerning one or the other. In this Jerome Basilio blog, you will find all necessary answers concerning your future business model, in order to make the right decision for your e-commerce business.
First of all, let’s try to understand the concept of dropshipping.
This fulfilment service allows small business owners to launch their business on Amazon in a speedy way. That’s because this business model does not require much investment on your part. You are only required to advertise your products through your Amazon store, and once you get an order, your suppliers will fulfil it right to your customer. Once you get paid, you have to pay for the product to your supplier. One of the most important aspects when you are doing dropshipping, is to ensure that you are working solely with right suppliers who are providing you with genuine and high-quality products.
FBA is another popular business model among Amazon sellers. More and more Amazon sellers prefer to use this method, since Amazon provides them with tons of special advantages. First of all, you do not worry about issues like where to store your items, since you can use one of Amazon’s warehouses for keeping your goods. Another advantage of FBA is that you should not worry about your products’ packaging, since Amazon takes care of this issue too. Additionally, Amazon takes full responsibility for your products’ shipping, and handles returns. By using Fulfilment by Amazon (FBA), you can be sure that your customer receives the best customer service.
The Difference Between FBA and Dropshipping
In light of the above-mentioned information, you can see that both business models are efficient for running a successful business on Amazon since in both cases, you should not worry about vital aspects like customer service. However, there are several differences between these two business models.
When you are doing a dropshipping, it is still your responsibility to handle, orders, payments and stay in touch with your customers by answering their questions. Additionally, you should handle issues like refunds and returns. You still nothing to do with products’ storing shipping and packing; however, try to ensure that your customers get good service; otherwise, you risk receiving negative reviews which will have a negative impact on your business.
At the same time, when you are operating under the FBA Amazon business mode, you can still use all these benefits. Plus, Amazon will take care of your customer service. In this case, all you need to do is to ensure that you do not have missing items in Amazon’s warehouses. Additionally, you should ensure that you are working solely with valid suppliers who are providing you with genuine products, and you will not have any inauthentic issues in the future.
As you can see, there are a few differences between these two business models; however, the pros of Fulfilment by Amazon (FBA)definitely outweigh those of dropshipping. We will continue our talk in the second part of this blog, by providing you with more information concerning both business models. However, if you intend to launch your business on Amazon, but still have some doubts, don’t put too much pressure on yourself.! Jerome Basilio’s professional team will help you handle this process in the most optimal way. By working with our team, you can be sure that your investment goes in the right direction. Do not hesitate to contact us, and put the first stone of becoming the owner of a successful business on Amazon.