How is Amazon Different from Mainstream Dropshipping?

When dealing with Amazon you have to invest in the merchandise of the products you wish to sell and store them in the inventories of Amazon. On the other hand, in dropshipping you act the mediator between the customers and the suppliers. 

 

Amazon Dropshiping
Amazon Dropshipping

Read also:  Top Profitable Niches for Dropshipping for 2020

Does Amazon Allow Dropshipping?

Yes, Amazon does allow dropshipping on its platform. But there are a few terms and conditions under which Amazon dropshipping is legal. 

One has to stick to Amazon FBA policy, in which it is stated that a seller cannot buy a product from another online retailer and let the retailer ship products to the customers. 

What is Amazon FBA?

Fulfilment by Amazon FBA is the policy of Amazon dropshipping. Undoubtedly, Amazon is a huge online market and they need certain filters to make their dropshipping beneficial to them as well as the customers. 

See Also: How to do Dropshipping on eBay? Complete Guide

How does FBA work?

When you sign up for the FBA program, there are many benefits that Amazon provides you.

FBA
FBA

The FBA program basically means you sell your product and Amazon does the logistics to ship it to your customer. 

  • Sign up with the FBA program
  • Send your products to Amazon
  • Amazon stores your products in their inventories
  • When a customer orders your product, Amazon will ship it to them
  • All the payment issues, exchange or return everything is handled by Amazon

Isn’t this great? But wait, Amazon does charge you for all these services. There is a certain amount of storage and delivery fulfilment charges to be paid.

Most of the third-party sellers use the FBA program. An estimated 66% sellers of the top 10,000 sellers are signed up with Fulfillment by Amazon program. 

What do you (seller) look after in the FBA program?

  • You choose the products that you wish to sell on Amazon. 
  • There is more time for you to focus on marketing and scaling up your business. However, Amazon being one of the largest markets, some amount of recognition comes handy.
  • Checking on your stocks in the Amazon Inventories. 

Pros of using FBA program for dropshipping on Amazon

Shipping and logistics

Logistics
Logistics

Amazon takes care from packaging to delivering your product to the customers. Nonetheless, in dropshipping, delivery is the most prominent problem. If delivery is being done effortlessly for you, why not?

Return Policies

If your customers have any problems or queries regarding the product, Amazon takes care of it. Exchange and return policies can give any seller a hard time, but the FBA works on it. 

Unlimited Storage Space

Amazon has huge inventories across all the countries it caters to, your product can also reach almost every part of the globe. Storage of your products and shipping them to the desired location comes under Amazon FBA work. 

Lesser Shipping Costs

Since Amazon packs and delivers hundreds and thousands of products together, they are charged less for their shipping. However, which results in lesser shipping costs for the FBA sellers. 

Audience Reach

There are more than 300 million active users on Amazon, you and your products are eligible to reach out to all these people with Amazon FBA.

Cons of using FBA program for dropshipping on Amazon

High Competition

There is a huge competition on a platform like Amazon, especially if you are setting up business lined up against already established and well-known brands. Undoubtedly, the stakes are very high.

No Direct Contact with the Customers

Not only does Amazon receive your product orders but also they are the ones delivering it. Definitely, there is no chance of you interacting with the customers. Finally, all the problems and queries are also approaches and solved by the Amazon team.

Risk 

If Amazon decides to discontinue a few products on their site, they might as well do it. This can shatter your business completely. Without a doubt, there is enormous dependency and risk while working with Amazon.  

No Customization Freedom

You do not possess the power to customize your product according to your will and wish. You have to stick to the terms and conditions of Amazon and work according to them. 

How can you be a good seller on FBA?

Start Minimal

It is very difficult to keep up with a lot of products at the start. If you have fewer products you can streamline your processes and get the correct hang of the entire procedure. Moreover, you can always keep increasing post this. 

Build an Image for your Brand

Competing with the best brands can be a challenge. Absolutely, it is very important for you to build a good image for your brand to keep prevailing in the market.

Work on the SEO

Amazon also works on Search Engine Optimization, just like Google.

Seo
Seo

It is a search engine and if you do not have the correct keywords included in your description, the customers will never find you.

Get Great Pictures for your Products

The picture is the first thing every customer will look at if you fail there not acceptable. Obviously, you need to have the best pictures for your products to sell. 

Every side has two sides which are equally important, so does dropship on Amazon. There are a few advantages as well as disadvantages of dropshipping on Amazon FBA.

Read Also: 10 Most Profitable Service Business Ideas for 2019

All the information is available for you in this article for you to think o dropship on Amazon. I hope this article proves helpful to you. Thank you for reading the whole thing. All the best!  

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