Dropshipping vs Selling on Amazon

[Elijah]

Hey, a lot of you seem to sell on amazon. I am pretty new to the online selling topic but I am trying to figure out why they all prefer selling on amazon to dropshipping.
Here are possible advantages I can think of dropshipping:
- You can create your own brand with your website, which you can't do on amazon (can you?)
- You do not need a warehouse
- You do not have huge costs or risks at start
- You do not have a direct price comparison. On amazon everyone can quickly take a look at the othere prices of the product. If you have your website, they first have to google.

Advantages of amazon:
- More trustworthy
- Faster shipping

What is the thing I am missing? In my opinion dropshipping is still the better choice, you do need even pay a percentage to anyone like you have to do at amazon.

 

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[JDx]

I'm a noob here, but some other advantages of using FBA:
- You don't need a warehouse either, you use theirs
- You can still use your own brandname on Amazon. Adding your logo/own label your products will probably be easier if you order in bulk, something that you probably can't do with dropshipping.
- Relatively cheap acquisition of customers through searches on Amazon (bidding on keywords). Otherwise, you'd have to use Facebook ads or Google ads, or Google SEO which can be very difficult to rank high quickly.
- Returns are handled for you professionally. You can't really return a dropshipped product.

In my experience, dropshipping is too slow and too generic compared to the service currently offered elsewhere. But yes, dropshipping does not require a big risk to start, since no inventory is required.

 

[AgainstAllOdds]

but I am trying to figure out why they all prefer selling on amazon to dropshipping.

Amazon controls 43% of US online sales. That's why people prefer it. It also allows for more scale.

- You can create your own brand with your website, which you can't do on amazon (can you?)

Running an Amazon business and your own website is not mutually exclusive. You can create a brand and sell it on Amazon while simultaneously running a Shopify store or something similar.

- You do not need a warehouse

Amazon has warehouses you can use. Look up Amazon FBA.

- You do not have huge costs or risks at start

True. But depends on your definition of "huge costs". A lot of people started on Amazon for $1,000 or less.

- You do not have a direct price comparison. On amazon everyone can quickly take a look at the othere prices of the product. If you have your website, they first have to google.

If you brand and market your product differently then you don't have a direct price comparison either. People evaluate your product separately based around the value it presents.

Advantages of amazon:
- More trustworthy
- Faster shipping

You're missing a lot here. The biggest being ease of sale and scale.

In my opinion dropshipping is still the better choice, you do need even pay a percentage to anyone like you have to do at amazon.

With dropshipping your risk is lower, but so are your margins, turnaround time, and overall growth potential.

 

[Elijah]

Oh ok, now it makes sense.
I heard that most people from Europe ship their amazon products from the USA, because the buyers are most likely from the US, do you know if that is true?
Thanks for your answers so far!

 

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[Walter Hay]

Oh ok, now it makes sense.
I heard that most people from Europe ship their amazon products from the USA, because the buyers are most likely from the US, do you know if that is true?
Thanks for your answers so far!

There are thousands of people who are not US residents and they sell on Amazon USA. Some ship direct from their suppliers to Amazon FBA warehouse, but I think it is better to ship to an independent fullfilment service, where you can have your goods checked, labeling done and then they ship to Amazon at low shipping cost.

There is a low cost Amazon marketing course that covers a lot more than just the subject of selling on FBA in the USA for residents of other countries. The course includes a free copy of my sourcing and importing book. I can't display a link because it is an affiliate link, (because my product sourcing book is included) so I will send it to the OP via PM.

The OP needs to appreciate that the low dropshipping margins will result in a lot lower profit than selling at much higher margins on Amazon, even taking into account the Amazon fees, and the traffic generated by Amazon eclipses anything an individual is likely to achieve.

As @AgainstAllOdds said in his excellent post above, a lot of people have started on Amazon for $1,000 or less.

Private labeling is a great way to make the most out of selling on Amazon, and it is not necessary to buy huge quantities to do that. You can still operate your own eCommerce site and get that information to your Amazon customers without infringing Amazon's rules. All you need to do is to include your website address on your labels.

Walter

 

[LPPC]

If you dropship from China, for example through Aliexpress, then you will have long shipping times if you choose the free shipping option provided by aliexpress. As I've heard, many packages will get lost or there are some other issues with dropshipping from aliexpress. You want returning customers and if the customers are not happy due to for example shipping issues, then they likely won't come back.

If you go the paid advertising route, then a better option would to have your own inventory and have it fulfilled by a fulfillment company if needed. Then you will have faster shipping rates and more control over the quality.

 

[JapaGirl]

There are thousands of people who are not US residents and they sell on Amazon USA. Some ship direct from their suppliers to Amazon FBA warehouse, but I think it is better to ship to an independent fullfilment service, where you can have your goods checked, labeling done and then they ship to Amazon at low shipping cost.

There is a low cost Amazon marketing course that covers a lot more than just the subject of selling on FBA in the USA for residents of other countries. The course includes a free copy of my sourcing and importing book. I can't display a link because it is an affiliate link, (because my product sourcing book is included) so I will send it to the OP via PM.

The OP needs to appreciate that the low dropshipping margins will result in a lot lower profit than selling at much higher margins on Amazon, even taking into account the Amazon fees, and the traffic generated by Amazon eclipses anything an individual is likely to achieve.

As @AgainstAllOdds said in his excellent post above, a lot of people have started on Amazon for $1,000 or less.

Private labeling is a great way to make the most out of selling on Amazon, and it is not necessary to buy huge quantities to do that. You can still operate your own eCommerce site and get that information to your Amazon customers without infringing Amazon's rules. All you need to do is to include your website address on your labels.

Walter

Hi Walter,
can i get the copy too?

 

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[Sanj Modha]

There are pros and cons to both:

Amazon FBA - you're selling off an established platform with millions of buyers, there's massive margins, they take care of fulfilment, shipping and anything else you might need.

Cons - you're not building a brand (customers aren't buying from you, they're buying from Amazon), there's no access to email lists, it's risky sending product to Amazon if it doesn't sell (you pay for storage fees) etc.

Dropshipping - you can control everything from branding to packaging, you have access to email lists (assuming it's Shopify or something similar), you can build a brand etc.

Cons - slow delivery times if it's coming from China and zero quality control since you don't see or touch the products.

 

[Walter Hay]

Hi Walter,
can i get the copy too?

Sent. Best wishes.

Walter

 

[Walter Hay]

There are pros and cons to both:

Amazon FBA - you're selling off an established platform with millions of buyers, there's massive margins, they take care of fulfilment, shipping and anything else you might need.

Cons - you're not building a brand (customers aren't buying from you, they're buying from Amazon), there's no access to email lists, it's risky sending product to Amazon if it doesn't sell (you pay for storage fees) etc.

Dropshipping - you can control everything from branding to packaging, you have access to email lists (assuming it's Shopify or something similar), you can build a brand etc.

Cons - slow delivery times if it's coming from China and zero quality control since you don't see or touch the products.

It is possible to build a brand but you are still at the mercy of Amazon, so you automatically have no control.

The best solution is to also start your own eCommerce site and include the URL in your labeling. For that to be effective in building repeat business you must make your site attractive, and it must have other products to offer to your Amazon customers who visit your site, even if only out of curiosity.

Ideally there should be some immediate reward for them visiting your site.

Walter

 

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