How to Make Money Online: Amazon FBA vs. Drop Shipping Review

By on November 5, 2018
How to Make Money Online

FBA – or Fulfillment by Amazon – and drop shipping are both order fulfillment methods wherein you as an online seller don’t need to store, package, and deliver the products you’re selling to your customers all by yourself. As the inventory and logistics aspects of running your online retail store are out of your hands when you use either of these two order fulfillment methods, you can save time and space and make more money along the way. But Amazon FBA and drop shipping do have some significant differences that would make you want to choose which among the two is more suitable for your business.

Why Choose Amazon FBA?

Say that you printed an initial thousand copies of your 500-page novel. At first, you may be fine with stocking boxes of your book in your attic, basement, or garage. But once the demand for your novel increases that you need to print tens of thousands of copies of it, whatever storage space you have in your house may not be enough anymore.

Also, you may already be working on a follow-up to your novel that you decided to expand into a series. You may, thus, not have the luxury of time to build a dedicated website where interested buyers can order your novel online. You may also not have the time to process each order and go to a courier to send a copy of your book to each customer who ordered it via your author’s website or on social media. So, you registered as a seller in Amazon and sold your novel there instead.

As an Amazon seller, you enjoy the following perks:

  • Amazon takes care of fulfilling every order made for your novel via its FBA system.
  • All you need to do is deliver the thousands of printed copies of your book to an FBA warehouse nearest you for storage.
  • When a customer buys a copy of your novel via your Amazon online store, Amazon will package your book using its branded, tamper-proof packaging and then deliver it to your customer’s doorstep.

Amazon FBA is suitable for you if you create your own the products that you sell online, just like the example above. Other products that are successfully sold under the Amazon FBA system include knitted baby clothing and woodcraft construction kits, to name a few.

Why Choose Drop Shipping?

Meanwhile, instead of writing books that your target audience may either buy from you or download a digital copy of somewhere, you decided to sell skin care products that you don’t make yourself. Instead of buying boxes of products from a manufacturer or supplier and stocking them somewhere in your house before selling them online, you can use drop shipping to fulfill customer orders.

Drop shipping works this way:

  • First, create a website of your own or sell your skin care products in an e-commerce platform that supports drop shipping.
  • Once done, you can start accepting orders of your skin care products from customers, collect their payments, and use the money to buy the said beauty-related items from the manufacturer or supplier at a wholesale price.
  • The manufacturer or supplier then delivers the skin care products that your customers purchased from you.

Drop shipping is suitable for you if you aren’t making the products that you’re selling. Other items that you might want to drop ship are ready-to-wear clothing, cellphone accessories, and party supplies, to name but a few.

Conclusion

A whopping 40% of the top 10,000 Europe-based sellers on Amazon used its FBA service as of 2017. On the other hand, up to 33% of online sellers in the USA have adopted drop shipping as their main order fulfillment method. Regardless if you’re an online seller residing in Europe, USA, or some other country, you can make more money out of using either Amazon FBA or drop shipping than if you handled inventory and logistics of your online business on your own. You may want to partner with journalreview.org affiliates to maximize your earning potential.

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