Amazon FBA vs. Drop Shipping: What’s Best for Beginners?
Will a beginner in eCommerce find the best success with Amazon FBA or drop shipping?
That’s something I’m asked a lot. It’s a great question.
To choose between Amazon FBA or drop shipping on Shopify, there are two questions you need to ask yourself:
- Should I be investing my hard earned money into product stock that may or may not sell?
- Or play it safe and sell someone else’s inventory?
Here’s the quick answer; the best path to success (for beginners) is drop shipping.
If I had no money, and I was starting an eCommerce business or if I only had a small chunk of money I wasn’t really willing to risk, I would without a doubt start making money online with drop shipping.
I know you're probably expecting an explanation to my reasoning. To understand why, you should read this article through.
Amazon FBA vs. Shopify
For Amazon FBA, a lot of risk is involved.
Amazon is a multi-billion dollar business, but if I were just starting my eCommerce business, it would scare me to risk losing my money buying inventory.
The difference with drop shipping is you’re selling other people’s products. So you do not need to invest a huge amount of money to get started.
The Drop Shipping Path
By picking drop shipping you could pay $29 for your first month of eCommerce hosting, and have a profitable store up and running in two or three weeks. Days even, if you pushed hard enough.
Now, the most used platform used for an eCommerce store for drop shipping is Shopify.
No, it’s not the only platform, there are other options. I however, think Shopift has the best platform for drop shippers. Building those stores is what I teach in my courses.
There are certain techniques and strategies you should use if you want an eCommerce store. One of the most important first steps is setting up an eCommerce store. Doing this will open other opportunities during later steps.
The Amazon FBA Path
Amazon FBA has a much greater risk involved if you’re just starting out in eCommerce. With Amazon FBA, you find a supplier in China. Next you’ll wire them a large chunk of change, and they’ll ship your products to Amazon’s warehouses.
Because they store your product in Amazon’s warehouse, it means you must pay for that, too. As you can see, the costs add up.
Let’s face it...There is a significant amount of risk involved with Amazon FBA.
The most important thing to remember when just launching an eCommerce business: You want to keep your risk tolerance very low!
The answer in choosing drop shipping or Amazon FBA for someone beginning in eCommerce is simple. With no doubt or hesitation, the answer would be to choose the drop shipping path.
It is important to remember that Amazon FBA is not a bad platform.
In fact, after you have worked to fine-tune your eCommerce business using drop shipping, the use of Amazon FBA can help increase your profitability.
While you are using Shopify for your drop shipping store as the only platform, it gives you the opportunity to gather useful information on marketing and customer service.
The information can help you make smarter business decisions. As always, your focus is to have an eCommerce business that is the most profitable.
Depending on what your goals are, at some point you may decide the best choice for meeting your overall goals is selling your business.
During that decision process, you will evaluate your business to determine how much it’s worth and take the appropriate steps to sell it.
I hope that answered your question. If anyone else has questions for me just leave them in the comments so I can answer them right away!