• Very low startup cost / barriers of entry. Shopify is $29 / month, you can get free themes or paid themes as low as ~$20, ad budgets can start low and slowly scale into them
  


• Easy to test several products
  


• Don't have to hold inventory or worry about shipping
  

• Not direct-to-consumer. This means you aren't selling on a platform where they are already customers waiting to buy products. With Shopify, you simply have a website that is 100% up to you to put into the eyes of customers through advertising
  


• Requires lots of optimization: Facebook ads, site optimization, monitoring analytics, etc. You must have the knowledge to know what to look for and when/how is best to change things
  


• Incredibly competitive, possibly saturated. Since the barriers of entry are very low with Shopify dropshipping, there are going to be tons of people who are also looking to enter the market. Without lots of previous experience, you most likely won't have immediate success and it will require lots of trial and error
  


• Very low profit margins. Since you are not ordering in bulk or manufacturing the product yourself, you are paying a higher unit cost which makes profit margins lower. This means in order to make a significant profit, your sales volume will need to be much higher
  


• Risk of backorders. You are relying on someone else's inventory and are only ordering 1 item at a time, which means there is no guarantee that the supplier/manufacturer will have stock when you need it.
  

• Direct-to-consumer. Selling on Amazon doesn't require you to market your own website, you are selling on a platform that already has millions of customers actively using it.
  


• 90% autopilot. You do not have to manage your inventory, manage orders, ship out items for each order you get, manage customer service, etc. because Amazon handles all of this for you. You can focus on scaling your store more by adding more products
  


• High profit margins. Since you are ordering inventory directly from a supplier/manufacturer, your profit margins are much higher than they would be with dropshipping. You are getting bulk prices which are heavily discounted compared to buying 1 at a time
  


• Priority over other Amazon sellers. Since you are utilizing Amazon's FBA service, you automatically have priority over other sellers who are fulfilling their products themselves because Amazon makes more profit off each sale you get. This means you'll get priority on search ranking, buy boxes, etc.
  


• Ability for multi-channel fulfillment. This means you can not only sell your products on Amazon, but also on your own website or other marketplaces while still utilizing their FBA service. This is an incredible opportunity for people looking to scale their business
  


• International capabilities. Since Amazon is expanding their platform to other countries, each supported country is another market you can access by listing your products for sale in that specific market. Another great opportunity for people looking to scale their business
  

• Higher barriers of entry. Since you do have to order inventory, there are higher startup costs for manufacturing + shipping
  


• Requires time to do product research. Compared to Shopify dropshipping, you'll have to spend several hours looking for a solid product to sell that is proven to sell. While this is made a lot easier with online software, you still have to be confident that your product is going to do well before ordering inventory
  


• Fulfillment fees. Amazon doesn't provide all of these services for free, you pay fees for the storage of your products as well as the fulfillment of your products and this eats into your profit margin.
  

(Aug 5, 2018 10:51 PM)James! Wrote:  Just what I was looking for, good article! What can happen if your product is just sitting on Amazon's shelf for months to years, will they charge you, return it or just leave it?

(Aug 7, 2018 04:36 AM)mr_larsen Wrote:  Thank you very much for this thread! I was a bit unaware of Amazon FBA to be honest.
I need to get this straight though.
You buy from a supplier - gets shipped to an Amazon warehouse - Amazon handles everything for you, even putting up your product (?)
Comprendé?

Great thread nonetheless.

(Aug 7, 2018 05:55 AM)JJLPopping2020 Wrote:  You have to create your listing of course.

(Aug 7, 2018 06:31 AM)mr_larsen Wrote:  So you create your listing with xxx given product - then Amazon receives the product at their Warehouse and handles pretty much the rest for you? Of course some administration and management needs to be taken care of, but sounds too simple for me.

(Aug 7, 2018 06:31 AM)mr_larsen Wrote:  So you create your listing with xxx given product - then Amazon receives the product at their Warehouse and handles pretty much the rest for you? Of course some administration and management needs to be taken care of, but sounds too simple for me.

(Aug 7, 2018 01:15 PM)JJLPopping2020 Wrote:  It's simple however you end up paying a total of about 33% of your profits to Amazon.
However, I think this is worth it because Amazon fba service is a PRIVILEGE you pay for IMO.
OP, I have a question however!

Do you reckon a $2000 dollar investment would be enough for this business model? My item price range would be reaching a $15-$25 dollar price and all would be ordered in BULK from asian sites such as AliExpress.
Also, when packaging, let's say you order 100 items from AliExpress and they all come in a big box. You sell every item individually or in a 2-4pack. Do they package every single sale you make into another box and ship it to the customer, or do you have to send it to them properly packaged?
I ask this because I cannot handle my inventory as I don't reside in the US.
Would be nice to hear back from you, cheers.

(Aug 7, 2018 01:15 PM)JJLPopping2020 Wrote:  It's simple however you end up paying a total of about 33% of your profits to Amazon.
However, I think this is worth it because Amazon fba service is a PRIVILEGE you pay for IMO.
OP, I have a question however!

Do you reckon a $2000 dollar investment would be enough for this business model? My item price range would be reaching a $15-$25 dollar price and all would be ordered in BULK from asian sites such as AliExpress.
Also, when packaging, let's say you order 100 items from AliExpress and they all come in a big box. You sell every item individually or in a 2-4pack. Do they package every single sale you make into another box and ship it to the customer, or do you have to send it to them properly packaged?
I ask this because I cannot handle my inventory as I don't reside in the US.
Would be nice to hear back from you, cheers.

(Aug 7, 2018 11:00 PM)exhibitionist Wrote:  Don't buy from Aliexpress. They're dropshippers/manufacturers selling at sale price. Aliexpress is B2C. Go to Alibaba for B2B.


Great comparison, by the way!