Amazon FBA VS Dropshipping | Choose The Best For You

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Amazon FBA vs Dropshipping

Dropshipping refers to the seller receives the order, and then freely choose the appropriate cross-border logistics channels to ship the goods to the buyer, waiting for the buyer to confirm receipt of goods.

FBA refers to the seller will send the goods to the Amazon warehouse in advance, wait until the emergence of the order, by Amazon to send the goods to the customer, to realize the advantages of the store delivery. This way the buyer is able to receive the goods in the fastest way.


Amazon FBA vs Dropshipping


Amazon FBA vs Dropshipping

Amazon FBA vs Dropshipping—- logistics efficiency

The logistics efficiency of FBA is much higher than that of dropshipping, because it is local shipping, the effectiveness is very high, it can send the goods to the buyer in the first time, and Amazon will be responsible for any problems in the FBA transportation process.

Amazon FBA vs Dropshipping —- Product Ranking

The biggest benefit of FBA is that it can improve the ranking of the store and products and increase the exposure, which is an advantage that self-shipping does not have.

Amazon FBA vs Dropshipping—- profits

Self-shipping profit is higher than FBA, this is because Amazon has the highest average unit price among the global shopping sites, this is because European customers have a higher quality of life, most of them will shop online and there are a lot of orders, so the profit is naturally high.

FBA is slightly less profitable compared to self shipment. This is because the cost of FBA itself is higher than self-shipping, FBA go sales, self-shipping go unit price. So this is the biggest difference that leads to the difference in profit between the two.


Amazon FBA vs Dropshipping


Amazon FBA vs Dropshipping —- Risks

Self-shipment risk is lower than FBA, FBA shipment is required to sellers to stock up first, which to a certain extent the goods may appear after the risk of stagnant sales.

If the storage cost is too high due to poor sales of goods, it will be a high expense for the seller. Self-shipment does not have this concern, and the goods are shipped at any time of the transaction.

Dropshipping is a method of supply chain management, an order fulfillment model in which sellers receive orders from buyers and have those orders fulfilled by a third-party supplier. This way the seller doesn’t have to store, handle or distribute any of the products and earns the difference between the wholesale and retail prices.

Drop shipping shipping process

  1.  The customer places the order and pays for it, and both the seller and the buyer receive order confirmation information;
  2.  the seller sends the order information to the supplier, they will charge the wholesale price of this product;
  3. the supplier (or on behalf of the shipper), to process the order, send the goods to the customer;
  4. the drop shipper will provide the seller with an invoice and logistics tracking number, which the seller will forward to the customer.

Amazon FBA vs Dropshipping


Drop shipping return process

  1. Customer contact the seller and ask for a return;
  2. The seller asks the supplier to provide RMA (Return Merchandise Authorization) code;
  3. Customer returns the product to the supplier while the address bar is marked with the RMA code;
  4. The retailer refunds the wholesale product to the seller;
  5.  The seller gives the customer a full refund.

If you want to know more about it, click on Amazon Seller Center.

Selling on Amazon and finding a reliable Amazon FBA freight forwarder is a big step towards success.

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