Dropshipping or FBA- What is More Beneficial?
Selling on Amazon or on any ecommerce platform is a continuous series of tasks from receiving an online order to delivering to the buyers. The overall game of online selling depends on a product’s quality and order fulfillment efficiency. Here, mode of shipping becomes an important factor to consider to serve your customers.
There are many options available to the Amazon sellers for shipping. The sellers can have their own warehouse for inventory and deliver items to buyers through Merchant fulfillment Network (MFN) or they can use Amazon Prime or FBA and even Dropshipping services.
The Amazon sellers say as many as options higher is the confusion. Many Amazon sellers come to us and ask what are the difference among all shipping facilities on Amazon and which should they pick.
Therefore read below to get the confusion clear.
MFN, FBA, and Dropshipping
In MFN, Amazon sellers have their warehouse and are responsible for shipping the purchased products to their customers through their in-house shipping team.
Whereas in Fulfilment By Amazon (FBA), the sellers put their inventory in Amazon warehouse and outsource every shipping action to Amazon, right from a picking, packing to shipping products to the buyers.
Then comes Dropshipping
Dropshipping cuts all the pains and hassles of sellers of filling the inventory and shipping process. It allows the sellers to reach the third-party vendors and manufacturers for direct shipping the products to the buyers. The dropshippers on behalf of the sellers are responsible for shipping and sending every order to the buyers.
How FBA is different from Dropshipping?
- In FBA, you need to put your inventory first in the Amazon warehouse while in dropshipping you don’t need to stock inventory anywhere.
- IN FBA, you need to pay Amazon for keeping your inventory in its warehouse even before you get the order for any product or inventory whereas in dropshipping until you don’t get any order you won’t pay to the vendor. Read: Amazon has changed its FBA Inventory Storage Fees and Policy in 2018
- Amazon is responsible for picking, packing, and shipping while in dropshipping the third-party vendors or manufacturers take care of every shipping action.
- In FBA, you might run the risk of overstocking the inventory and paying extra money to the Amazon while in dropshipping you can save every single penny by spending only when you get the confirmed buying order.
- Dropshipping allows retailing with small expenses without any hassle of shipping and advanced payment to Amazon while FBA charges the sellers in advance to put their inventory.
- Both Dropshipping and FBA share the common feature of handling the returns and refunds on behalf of the Amazon sellers. In either way, you don’t have to bother about customer’s return and refund requests.
- FBA products are Prime eligible while Dropshipping products are not. This means, if you use FBA, your customers can receive their orders as early as possible through prime shipping while in dropshipping the delivery of the products depends on the caliber of the manufacturers and third-party sellers.
- FBA sometimes becomes expensive while dropshipping can be cost-effective for those retailers who are just testifying their efforts in online retailing.
- Through dropshipping, you can integrate your other ecommerce accounts say eBay, Shopify with Amazon while FBA deals only with Amazon seller central account.
- Getting sales through dropshipping or FBA, both promote the chances of winning a buy box on Amazon.
Amazon gives many options to its sellers to ease their tasks. Serving to customers satisfactorily involves shipping a correct item and that too on the time. Here FBA can be counted as more reliable and efficient while calculating the effects financially, dropshipping will be advantageous especially to the novice sellers. Knowing your store needs and your ecommerce strategy, you can pick any of the shipping methods on Amazon.
Evantage offers complete assistance to the Amazon sellers to serve their customers satisfactorily. Right from launching the Amazon store to inventory management and sales-boosting services.
If you want to be a successful Amazon seller, come to us and get your sales graph increasing day by day!