dropshipping Archives - Seller Snap Thu, 09 Nov 2023 06:55:56 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.3 https://www.sellersnap.io/wp-content/uploads/2020/07/cropped-favicon-32x32-1-32x32.png dropshipping Archives - Seller Snap 32 32 A Guide to Dropshipping Digital Products  https://www.sellersnap.io/a-guide-to-dropshipping-digital-products/ https://www.sellersnap.io/a-guide-to-dropshipping-digital-products/#comments Thu, 25 May 2023 05:56:50 +0000 https://www.sellersnap.io/?p=21027 In this post, we are going to take a look at how to dropship digital products.

Digital products simply refer to digital assets, media creations, that you can create once and sell infinitely, unlike physical products that need to be manufactured from scratch and have limited (often tiny) profit margins. Digital products are downloadable or streamable like mp3 files or pdfs or media files like png.

Digital products have an infinite supply and thus offer you several additional advantages making them all the more attractive as a business.

• Zero overheads: There’s no need to find a place to store clunky inventory as with physical products or worry about shipping fees that eat into your margins. Just list your products inside your online store

• High-profit margins: You don’t spend anything to reproduce the goods. No recurring costs translate to higher profit margins for your online business as you get to keep the majority of your sales when selling digital products online. You only need time and skills to create digital products to sell

• Automation potential: The orders are delivered automatically meaning there’s no heavy lifting for you in terms of fulfillment

• Digital products also give you a greater degree of freedom to offer free digital products to build your email list. You can also offer a monthly paid subscription that gives subscribers automatic access to the entire suite of your digital content. To sell digital products is to give your audience a licence to access your content

However, that doesn’t mean there’s no challenge involved in creating digital products to sell. It’s true that digital products don’t share the same challenges as physical products do but there are other things to be aware of:

• Your competition is against free content: To successfully sell digital products online you need to succeed against mushrooming sellers with similar alternatives, some of them free. At BrushGalaxy, they countered this by dedicating a section to free brushes and then another (more extensive) section to premium brushes inviting the best of both worlds.

Anyone who came looking for free brushes stayed around long enough and more often than not, was impressed by the quality of digital products and went for the premium options.

To summarize, to be successful, consider the market you’re selling to. Provide premium value when selling digital products, always invent new product ideas, list them on your own website, use creative promotional tactics, and work really hard at developing your brand from the bottom up.

Free Digital Tools

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• You are at open risk of piracy: You need the right tools to protect your digital products, online courses, and other materials against piracy as there will always be someone looking to make a quick buck by copying your digital product.

• Limited options to advertise: Not every channel is open for selling. Facebook or Instagram only allows you to sell physical products through its platforms.

3 Apps for Selling Digital Products

There are many tools that you can use to sell digital products.

• Digital Downloads –It’s a Shopify app that gives your customers an option to download the file when you sell online and get a link to their email showing the product they purchased.

• Sendowl – Sendowl is a great tool with automation built in like expiring links or auto-generated keys when you sell digital products.

• Sky Pilot – This gives you the option to create a membership program that helps you sell files and video streams to customers.

Dropship Education Products like Ebooks or Courses

It isn’t always fun to create detailed content guidelines with massive amounts of textual and video input for an educational digital product that you sell online. You need to spend a lot of time creating presentations, not to say recording, re-recording, and editing videos all while chasing the elusive goal of a successful information product. To create online courses, start with the learner. What do students want to learn with your online course or once they’re done with the online course? Maybe even offer a free trial of your course first.

Use interactive exercises, quizzes, and tests to break down your material making the online courses even more engaging.

You can always package your expertise into valuable content in the form of videos and PDFs and dropship it to others who are interested when you sell digital products online. How? Start by posting tons of tutorials or blog posts about the subject you want to teach to scale your digital product business. Don’t try to sell digital products; instead, sell the consumer’s ability to effectively use the product post-purchase. This presents your idea in a customer-centric light rather than a sales-centric light. As counter-intuitive as it sounds, this alone can result in more conversions.

You can either leverage your expertise to gain exposure for products or you can start from scratch and offer content to increase awareness and leads in order for selling digital products.

Dropshipping Allows you to Use your Digital Assets

Creatives can post digital assets that are licensable worldwide for others to use in their works, including stock images, video recordings, and music.

By offering licenses to companies and individuals, you can charge for the use of your photos, videos, and music. Remember that in exchange for the exposure they give you, some marketplaces can charge up to 50% commission on each sale. There are free tools that help you create digital asset destinations.

Think backward when building such assets. Always ask yourself what content people will want to use.

Membership for Exclusive Digital Items

Creating recurring income is easy if you go about smartly selling digital products online. One smart way I’ve seen a lot of people become successful is product bundling. It’s simple as all you need to do is bundle different products together and then charge a recurring subscription fee from your online store. Bundling immediately increases the value proposition of your digital product in the customer’s minds. If you are selling online courses, bundle different online courses together to sell more of them.

This is a fantastic way to keep a growing library with a small group of dedicated members. Paid digital subscriptions also offer you a way to make money from content marketing efforts. You create more content, and subscribers see value in that and choose to stay on.

You can protect your content behind a paywall providing exclusive access to subscribers-only. Having a dedicated community helps you win chargebacks or completely avoid them.

Dropship Digital Templates and Tools

Digital items can also take the form of tools that allows someone to do tasks that require a lot of time. These act as solutions that address the pain points of specific audiences. You can host these digital product ideas on your own website.

Here are a few examples of digital products to sell:

  • Enterprise files product mockups
  • Resume templates for job seekers
  • Enterprise level software
  • Video editor plugins
  • Procreate brushes
  • Icons, fonts, or UX kits for designers

You can turn your skills and knowledge into digital products that generate a passive revenue stream for several years to come.

Sell any Type of Music or Painting

You may already know about ways to generate money from music or artwork. Digital goods can range from t-shirt designs to canvas prints.

Are you a musician? If so, you can also dropship ringtones or caller tunes that feature popular songs. Are you an artist? As an artist, you can create digital art and repurpose them as wallpapers for PCs or phones. There’s plenty of demand for that.

Dropship Expertise or Services

Services tend to limit what you can earn primarily because your inventory is limited to the number of hours you can accommodate in a day.

Customers often get digital products along with other services as part of their purchase. Designers provide the logo. It doesn’t end there. Next, you need a strategy where you position your services as a package and pair them with digital products.

You can offer consultation for a fixed hourly rate and then sell your customers other products or services. You could also offer a free download tool that will help you generate leads for your email lists, which is a common tactic used by many online businesses. This enables you to sell online. Another good idea is to create a listicle and include several valuable options for your customers.

You can always outsource some parts of your service that are simple but valuable for the end user.

Ideas to Sell Digital Products

It can be difficult to wait for the right moment, but finding a great business idea that you can sell as digital products by following a process is possible. The most important steps of the process are brainstorming, followed by validation.

Brainstorming

Begin with general digital product ideas. Be open to any criticism at this stage as bad ideas can always lead to good ideas for selling online.

You think you can educate people on how to use a product. Let’s say you sell mittens online. You might be able to land more bookings if you can create a course on knitting techniques. This course complements something you already do and builds on your expertise.

Conversely, you can create a fitness tracker for your clients as a digital product, if you’re teaching yoga online. Consider the values that drive your business. What related topics do you want to consider and brainstorm new ideas based on that?

You can teach others to do exceptional photography if your own skills are exceptional.

Research

Research is a fantastic way to generate new ideas and add them to your list.

When you conduct research that shows you a new way to find paint points that customers associated with your business, its principles, and the company.

These are some great places to get your work started.

Facebook Groups for Digital Sellers

You can learn a lot about hobbies and interests of your industry by being part of forums. There are both forums dedicated to selling physical products and to sell digital products.

Compare reviews on other online stores to get ideas about products and see that against your competition. These reviews could be either product reviews or stand-alone reviews posted on different blogs or sites.

Commentaries and blog articles. To develop the idea further, read blog content that your audience reads. Also, read the comments to further develop the idea.

Validating your Digital Product Idea

Before you invest time into an idea, validate the idea. You don’t want to invest too much time or money into ventures that would eventually fizzle out. However, there’s an opportunity for you to validate your idea in different ways:

Keyword Research

page traffic research

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Use the keyword research tool to discover the number of people searching for your subject. This presents you with additional ideas you may have never thought of initially.

Another place is Google Trends. With Google Trends, you can find topics that are growing in search. This shows the opportunities will continue to grow.

Requesting Reviews

Get in touch with clients by email or social media. Conducting a survey is a fantastic way to solicit feedback.

A smaller version of content may be better than a larger one. This helps you validate your ideas.

Digital Dropshipping Products You can Start Selling Today

 

1. eBooks

eBooks are some of the most profitable digital products to sell online that both creators and customers love equally. They are simple to produce and require a little more than written text and some images. eBooks are in another way online courses without video lectures.

An additional benefit is, eBooks are easy to distribute on large marketplaces or online stores. They’re easy to access as people can read them on e-readers, tablets, computers, or even phones.

Ebooks allow you to share anything you are passionate about on any creative market like Amazon KDP or your own online store. You can educate, advise, and curate existing content within an eBook and sell them on your own site or store.

2. Software

The software industry is pretty big and growing and holds the key to passive income. That affords us many opportunities. Selling a piece of software is far more difficult than selling physical products.

The global software market is projected to be worth over USD 1 trillion.

People use computers almost every single day, and apps and codes speed up daily tasks in their personal and business lives. Software is one of the most profitable digital products there is and is an example of a best-selling digital product.

Starting from large companies to small businesses, these are a few examples of types of software products to make and sell.

SaaS email product

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  • WordPress plugins and themes
  • Project management tools
  • Mobile apps
  • Mac apps
  • Linux apps
  • Android apps
  • Web-based SaaS tools

You can turn your code into cold-hard cash.

3. Web-based Applications (SaaS)

SaaS products unlike software products aren’t downloaded from the web and installed on your computer. It’s run inside a browser and these aren’t digital products in every sense of the word but are sold in the same way.

If you run an eCommerce business and want to create a handy application for your customers, you can either turn to the eCommerce app dev company or work with creators directly to buy their digital products.

The number of SaaS tools and apps is huge. Here are some examples of SaaS products you may be familiar with.

File storage services like Dropbox, iCloud, Google Drive

Spotify

Email marketing platforms like Drip or Mailchimp, ActiveCampaign

CRM apps like Salesforce

LMS membership sites like Kajabi

Pick a niche and there will be a SaaS tool built around it.

4. Graphics and Digital Art

As a graphic designer or artist, you can create a variety of both unique and valuable content to sell as digital goods. Digital art gives you access to an ever-growing customer base for your very own online business.

This is a great way to generate recurring passive income online and find lots of potential customers. There are plenty of graphic design tools and services you can offer on top of selling digital art.

You can make these digital goods in your online store:

  • Logos
  • Brand design kit
  • Templates
  • Photo templates
  • Procreate brushes
  • Artwork
  • Stock icons
  • Card designs
  • Swipe files
  • Brushes
  • Backgrounds and more

6. Fonts

Fonts and typefaces are good examples of digital products that will remain popular. As customer preferences change and morph designers need new fonts. Fonts can be created for use on the web, for applications like Docs or Word, and for design work inside Adobe Photoshop.

7. Music and Audio

Both music and audio are powerful ways to communicate messages.

Audio products can include:

  • Lectures
  • Music
  • Audiobooks
  • Foreign language lessons
  • Background noises
  • Karaoke versions of popular songs
  • Sound effects

8. Photography

It’s no secret that internet users often use copyrighted images illegally even without knowing that. However, brands know that they should buy the right to the imagery. Thus, high-quality, premium photos are a sought-after digital product. The biggest consumer of online photographs are bloggers as well as other website owners.

There are multiple photos you can sell:

  • Stock photos
  • AI-generated photos
  • Event photos
  • Backgrounds

Plus, you can sell photos on digital selling platforms like Adobe. Photography is crowded will many competitors that make it difficult to price your photos right. You hardly get paid for the skill and effort you put into the craft making it difficult to earn what you are worth.

However, you can use multiple strategies to build a successful business selling photos. Make it easy to buy photos. A good website is both critical to showcasing your portfolio as well as elevating your profile. The first thing you need to do is make it very easy to purchase photos. Consider whether you should sell photographs individually or provide unlimited downloads to subscribers. With fair pricing and a great selection of images, you can start to do really well selling both indeed or client-ordered photos on your site.

9. Video

Video is an extremely popular format to deliver quality information. Content can educate inform and entertain. You can create videos, package them inside a course, and sell them as online courses.

It’s more engaging than simple text. Some like watching videos at 1.5x to 2x speed.

Users love videos and are happy to pay for the same.

  • Sell online courses
  • Stock Footage
  • Drone footage
  • Special effect templates for motion graphics
  • After effects templates
  • Product reviews video gameplay

Conclusion

What do you think of the different ways to dropship digital products and earn a full-time income online?

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Is Dropshipping Dead? https://www.sellersnap.io/is-dropshipping-dead/ https://www.sellersnap.io/is-dropshipping-dead/#comments Thu, 14 Apr 2022 01:08:14 +0000 https://www.sellersnap.io/?p=18847 While many perks come with running a dropshipping business, many are hesitant to begin because of the massive growing competition. This brings many people to ask, ‘is dropshipping dead?’

For those who don’t know, dropshipping is a fulfillment method where an online retail business (a dropshipper) acts as an intermediary between the supplier and the customer. Once a customer purchases a product from the dropshipper’s store, the dropshipper contacts the supplier. Afterward, the supplier ships out the product directly to the customer. 

Lastly, the dropshipper keeps the profit between the source price and the selling price. With that said, the dropshipping business model has been around for years and is continuously gaining popularity within the eCommerce world.

All in all, the question remains: Is dropshipping dead? We’ll answer this question by looking at recent trends and how the business model brings in profits. By the end, we’ll have a better understanding of dropshipping and if it’s still worth pursuing in 2022.

Is Dropshipping Dead In 2022?

Dropshipping is all around us. Chances are, if you purchase things online, you bought from dropshippers before. In fact, according to Market Data Forecast, the global size of the dropshipping market was estimated at 128 billion dollars in 2020. This number is predicted to increase year by year continuously.

In other words, the world has embraced eCommerce, and more people are buying online than ever before. Meaning dropshippers have the potential to continue earning high-profit margins. Especially with the small investment needed to begin, dropshipping is a highly profitable business model.

Take AliExpress, for example. They don’t have physical warehouses like Amazon. The products there are from Chinese dropshippers who import products from Chinese suppliers we cannot reach. 

When we purchase an item on AliExpress, the Chinese dropshipper then purchases the product from their supplier and ships it directly to our address (hence the dropshipping business model).

With more suppliers, dropshippers can expand their market reach and, thus, increase their sales.

Dropshipping Competition: Is There Still Room For Profit?

Now that we know that dropshipping is a low-risk business model, we can understand why there are so many players in the market. This is a cause for concern for those looking to enter the dropshipping industry  . With the amount of competition, many question how the business model continues to be profitable.

Unlike traditional retail businesses, there is no such thing as product/niche saturation when dropshipping. Sure, some items have more competition on a particular market, but we can dropship from, and to anywhere we want.

Plus, new products are manufactured all of the time. There’s always room to add new products and catch new trends while targeting different audiences worldwide to increase sales and decrease competition.

Ultimately, dropshippers investing in marketing will see the most significant ROI (return on investment). Not only are they increasing their brand awareness, but they are also gaining a competitive edge in the market.

Advertising Costs On The Rise: Is Marketing Still Profitable?

Every year, we notice a slight increase in advertising costs – especially in Facebook and Google PPC (pay-per-click) ads. That’s because we have new competitors joining every year, which increases our ads’ bidding value.

Take a look at how much advertising used to cost 5-10 years ago and how much it costs today. The graph above shows the average yearly spending on advertising. One reason for the increase is more competitors joining the market. And, with that, we have more people bidding to get good ad placements, ultimately increasing the average ad placement costs.

On the other hand, the opportunities and profits increased as well. We have more products to sell and more markets to target. In 5-10 years from now, you’ll see how many opportunities we had today when it comes to online marketing.

We can see that digital advertising spending worldwide is increasing. In 2020, the total ad spend was approximately 378 billion U.S. dollars, and it’s forecast to reach 646 billion by 2024.

So, what does this mean for dropshipping businesses?

It’s clear that the dropshipping business model is growing exponentially every year. With that, we have more competitors trying to get their piece of the cake, resulting in higher ad costs. 

On the other hand, there aren’t enough sellers to meet the growing global market demand. There is always room for more products to dropship to additional markets. That’s why dropshipping will always be a relevant, low-risk, high-reward business model.  

Is It Worth It To Become A Dropshipper In 2022?

The short answer is: absolutely! 

As we saw, dropshipping is on an upward trend. Without the need to store inventory or invest in initial start-up costs like traditional business models, dropshipping is an appealing venture. 

Who wouldn’t want the ability to generate a passive income and work from anywhere around the world? It may sound too good to be true- but with the right tools and knowledge, it’s more than possible. 

Moreover, the explosive growth is mainly due to consumers’ increasing online shopping habits. eCommerce, in general, is growing into an everlasting worldwide trend, showing no signs of slowing down. 

And with the dropshipping business model, we can take part in this success and grow our own business empires. 

Remember that you can choose where to dropship from (what suppliers to use) and to (what selling channel to use), along with the ability to target different markets on a global scale. 

You can do it from anywhere and on your own schedule. Therefore, there’s no limit to how much and well you can profit from dropshipping in 2022. 

Final Thoughts

There we have it! Although we can’t predict the future, we can trust the facts and figures. Dropshipping is not dying in 2022; in fact, it is thriving. The multi-billion-dollar industry will continue growing as long as consumers are buying products. 

If we’re entering the dropshipping market, we must ensure we’re staying ahead of our competition. Using eCommerce tools such as keyword research apps, product research tools, and Amazon repricers can provide a competitive advantage. 

By optimizing in every way possible, especially in product research, online marketing, and providing exceptional customer service, we’ll head towards the path of success. 

There are no limits to how far we can go, and dropshipping businesses are scaling new heights in the eCommerce world. So, take advantage of this information and consider starting your own successful business in 2022. 

——

About the Author:

AutoDS is the leading all-in-one dropshipping tool for eCommerce sellers of all experience levels. Offering automation and expert advice, AutoDS is a time-saving hero for dropshippers across the globe.

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Comparative Guide on Amazon FBA vs Drop Shipping in 2020 https://www.sellersnap.io/comparative-guide-amazon-vs-dropshipping-2020/ https://www.sellersnap.io/comparative-guide-amazon-vs-dropshipping-2020/#comments Mon, 27 Jul 2020 23:30:21 +0000 https://www.sellersnap.io/?p=13331 In the eCommerce industry, one of the highly discussed topics among online sellers is Amazon FBA vs Dropshipping. Despite tons of articles discussing the features of the respective business models, there are still some online sellers and would be online sellers who are confused about which business model to focus on, whether Amazon FBA or dropshipping in 2020. 

The lure of financial success and independence has propelled the online selling industry to greater heights. Headlined by both Amazon FBA and dropshipping, online sellers are sometimes caught up in a dilemma on which business model to begin with. 

Below is a comparative discussion detailing key points about the highly debated topic of Amazon FBA vs Dropshipping. 

Amazon FBA Dropshipping

For first time online sellers, the term Amazon FBA can be quite confusing, especially with terms like Amazon FBM and Amazon SFP that are also frequently discussed on forum sites and discussion boards, along with the term FBA. To begin with, FBA stands for Fulfilment by Amazon.

With the Amazon FBA program, Amazon allows you to send your products in bulk to their numerous warehouses. As an alternative, especially if your Amazon products are coming from China, you can also send those items directly from China to the Amazon FBA warehouse. As the Amazon website states, with the FBA program it would be Amazon who will PICK, PACK, & SHIP your orders. In essence, such a process is viewed as Amazon FBA dropshipping. 

In certain instances and when conditions are met, Amazon sellers may even get FREE shipping, storage, removal, and returns when they try Fulfillment by Amazon. Thus, making Amazon more appealing when it comes to Amazon FBA vs Dropshipping

Watch the video below to learn more about the Amazon FBA program.

 

 

What is Dropshipping?

On the other side of the coin, we have dropshipping as an alternative to selling on Amazon. This type of business model follows an almost similar concept to that of Amazon FBA. However, instead of going to Amazon warehouse from the manufacturer or supplier, items are shipped directly to buyers. 

If you are lucky enough, you may find suppliers abroad that offer a variety of items. Some suppliers would even extend their service to a point of offering tests or sample items before the actual order. For a variety of options for your dropshipping products, you may check ChinaBrands

Getting Started

If you want to get started with any of the two business models, here is an overview of next steps to start your own online selling business, whether via dropshipping or Amazon FBA (Download Detailed FBA Guide Here).

Amazon FBA vs Dropshipping: Advantages & Disadvantages

Similar to any other online undertaking, discussion on Amazon FBA vs Dropshipping will touch the issue of Pros and Cons. To give you a clearer understanding of what may lie ahead of your online selling journey, here are some of the advantages and disadvantages of both Amazon FBA and dropshipping. 

Advantages of Amazon FBA

  • Established Customer Base

One of the main highlights when it comes to Amazon FBA is its reliable customer base. It is estimated that nearly half of the online users begin their product search on Amazon.com rather than Google search. 

With proper Amazon SEO and a better understanding of the Amazon A9 algorithm, you can definitely reach a steady stream of online shoppers from its millions of customers. Statista even highlighted the dominance of Amazon in 2019 when it comes to its U.S. mobile patrons. 

  • Brand Image

When you associate any of your products with Amazon, you would inevitably benefit from the tech giant’s premium brand image. The impact of Amazon branding goes beyond product perception, for the customer service of Amazon will also be associated with your own business. In fact, some online shoppers are not aware that the products they bought were actually sold by third-party merchants like those enrolled in the Amazon FBA program. 

  • Technological Advantage

When it comes to Amazon FBA vs Dropshipping, Amazon is far ahead when it comes to technology. Amazon has its own algorithm that you may take advantage of in order to rank your product in organic search. 

Optimizing your listing is much easier, especially since there are already tested and proven guidelines that Amazon itself and experienced Amazon sellers have laid down. All you have to do is understand and follow the steps provided. In terms of security concerns and/or system glitches, Amazon is also prepared to deal with this. 

  • Almost Maintenance Free

Amazon FBA is a preferred business model by some online sellers because of the easy maintenance. By maintenance, it would include but not limited to product listing maintenance, product storage maintenance and other overhead costs. With Amazon, the usual expenses of an individual seller are drastically decreased. 

Disadvantages of Amazon FBA

  • Costly Initial Capital

When starting an Amazon business, especially with Amazon FBA, capital will be an issue for some sellers. Individual sellers will find it difficult to raise a decent amount to start their FBA campaign. According to a survey, 17%-22% of Amazon sellers started their business with a capital of $2,501 to $10,000. 

  • Single Platform Reliance

One of the concerns when it comes to Amazon FBA would be platform reliance. This means that when your account is penalized or banned, you could lose your revenue source. 

Similarly, competition in a particular niche may also be tough, especially for starters. That is why best Amazon sellers utilize only the best Amazon seller tools, like Seller Snap to outbid their competition. Seller Snap serves as their reliable and trustworthy AI Amazon repricer that is based on Game Theory tactics. 

  • Inventory Dependent for Sales

Amazon sellers should see to it that they will never run out of inventory. One of the factors that Amazon considers for ranking a listing or product is the sales performance. If you lack inventory, then your sales will be affected. 

As a consequence, your ranking will also be affected. And since ranking is designated by an algorithm, you will have to regain your previous product ranking through proper optimization and FBA practices. Thus, essentially suggesting that you will have to start from scratch once again. 

Advantages of Dropshipping

  • Less to no Initial Investment

What makes dropshipping attractive to some online sellers is its required initial investment. To start your dropshipping business, there would be less to no initial inventory cost. This will normally depend on the arrangement you made with your chosen supplier. 

This is the trademark of dropshipping, you will find suppliers online and sell their products to customers. When someone places an order, you will take the money and then place an order with the supplier using the customer’s money. Hence, you are not investing in the purchase of the item, unlike Amazon FBA where relatively massive inventory is needed to effectively run the business.  

  • Low Starting Cost

Another advantage of dropshipping is the low initial investment cost. Although there is less to no expenses when dealing with inventory, you will still be spending money for the establishment of your online store. 

You will have to create your own website and buy some eCommerce themes to be able to display the items you want to sell online. If you are not familiar with website creation, there are free tutorial videos on how you may create your own eCommerce site from scratch, similar to the one shown below. 

How To Create An eCommerce Website With WordPress 2020 Video Link:

 

 

  • Freedom To Sell

Since you own your website, you are free and responsible for the items you will be selling via dropshipping. Unlike Amazon FBA, there is no restriction with dropshipping as long as the item is present in the market.

In contrast to that, Amazon FBA prohibits certain products such as gift cards, gift certificates, vehicle tires, alcoholic beverages (including non-alcoholic beer), and other stored-value instruments.” To know more about FBA prohibited products, CLICK HERE

Disadvantages of Dropshipping

  • Laborious Preparation

In Amazon dropshipping vs FBA, the former is very taxing in terms of startup demands. More effort is needed in dropshipping for both internal and external operations. 

As your point of departure, you will have to do thorough research into your chosen niche for your dropshipping business. Similarly, you will also have to search for the best and most reliable suppliers in the industry. 

On the external aspect of the preparation, you will also have to prepare your website and to communicate with your potential supplier, either via email or phone call. Similarly, you will also need to set up a paid ad campaign to bring traffic to your dropshipping website. 

With Amazon FBA, traffic is already taken care of, especially since  Amazon receives millions of visitors per month. And just most recently, Amazon had over billions of combined desktop and mobile visits. All you have to do when selling on Amazon is to optimize your product listing to be more attractive to shoppers. 

  • Non-Existing Customer Base

As mentioned above, Amazon has an established customer base. In contrast to that, managing a dropshipping business is a risk in the sense that you don’t have an established customer base. That is why you will have to run an initial ad campaign to drive traffic. To help you with ad campaigns, you may check Facebook Ads or Google Ads

  • Handling Returns

Unlike Amazon FBA where Amazon takes care of the returned items, in dropshipping, you will be the one to handle this. This means that you will have to handle the communication aspect of the product return if there would be some errors concerning the product.  

In some instances, if product concern is caused by your dropshipping store, some customers may refuse to return the product and declare the transaction fraud. If such would be the case, your supplier will not replace the item unless the alleged defective item is returned to them. 

  • Low-Profit Margin

With dropshipping, profit margin tends to be on the low side, especially if you are still starting. Your daily or monthly expenses in business-related transactions may simply eat up profit margin, not to mention abrupt fees and costs due to unforeseen events. 

That is why on the onset of dropshipping, it is highly discouraged to make dropshipping as your main source of income. 

Amazon FBA or Dropshipping?

When it comes to Amazon FBA vs Dropshipping, decisions will likely vary depending on different factors. The advantages and disadvantages pointed out are not the only basis for consideration, for you will also have to consider your purpose of entering the online selling industry. Whether it is Amazon dropshipping vs FBA program, sellers should still put in the effort and resources for success. 

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