Dropshipping vs Amazon FBA

[LPPC]

Hello fastlaners,

I am currently dropshipping on Amazon with a very reliable dropshipper. I don't have my own inventory as of now and have never used Amazon FBA before. I have to decide whether it is better for me to have my own inventory/do FBA instead of dropshipping. I have 12K USD to work with (saying this just in case this would influence your answer.

My question to you guys is: What are the pro's and con's of having your own inventory/doing FBA? For example: is it a real hassle to import and restock or is it pretty straightforward when you get the hang of it? I've never imported before so I have no imagination as to what kind of difficulties it would bring along.

The advantage for me that I know of when choosing FBA/having inventory is that I will get twice as much profit per sold item because my dropshipper is pretty expensive and I can buy more stock using the money I have. So I will have higher margins. But as of now dropshipping is pretty easy and it goes really well, so I'm looking to figure out whether the switch is worth it.

I would appreciate some answers from you guys who have experience with having inventory in general and using FBA.

Thank you very much!

 

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[JasonR]

This is a hard question to answer.

Are you reselling someone else's product? If you're dropshipping I presume you are.

Are the items big and heavy?

Have you considered the additional sales volume increase with FBA - not just the profit margins?

Have you projected your cash flow needs if you hold your own inventory? If they are cheap products $12k should float it fine, but perhaps not if your goods are relatively expensive.

If you're selling someone else's product via dropshipping, you're playing a losing game. If you found a profitable niche and have some free cash it's a no brainer to import and brand your own product.

Tell us more about your situation.

 

[LPPC]

This is a hard question to answer.

Are you reselling someone else's product? If you're dropshipping I presume you are.

Are the items big and heavy?

Have you considered the additional sales volume increase with FBA - not just the profit margins?

Have you projected your cash flow needs if you hold your own inventory? If they are cheap products $12k should float it fine, but perhaps not if your goods are relatively expensive.

If you're selling someone else's product via dropshipping, you're playing a losing game. If you found a profitable niche and have some free cash it's a no brainer to import and brand your own product.

Tell us more about your situation.

Thank you for your response. Those are indeed good matters to take into consideration. I am mostly selling generic trending products as of now but that will change in the near future for sure. I will slowly move into selling long term products.

But for now I wanted to figure out whether it is a wise idea to start having my own inventory for these trending products. So I was just curious about your experiences with importing products. Having less money but in return having less stress is worth it for me. So I was wondering whether importing brings lots of headaches with it or whether it is pretty straightforward when you've gotten familiar with it. Pretty hard to imagine the possible difficulties with importing when I've never imported before