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The Pros and Cons of Dropshipping on Amazon

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Posted 30th March 2016 at 08:58 AM by repricerexpress

Getting that first sale sure is an exciting feeling, sort of like finding out the movie you wanted to watch is available on Netflix. But unless you’re going to be handling every single aspect yourself, there are other factors to consider.RepricerExpressis taking a look at how dropshipping or FBA can benefit you most.

Dropshipping in General
Let’s say you’re not at all interested in creating your own inventory line, for whatever reason.Dropshippingis one of the best alternatives out there, as it allows you to act as the middleman by not dealing with the products at all. Instead, you place an order with a supplier or manufacturer and have them ship the product to the customer. Profits aren’t as high with this model, but you do get the perk of ease and simplicity.

Dropshipping on Amazon
The basic ins and outs of dropshipping don’t really change when you transfer the concept to Amazon, other than you have to take into consideration the quirks of dealing with that particular marketplace. Rather than really explore what makes it so unique, let’s just take a look at the pros and cons of dropshipping on Amazon.

Pros for Amazon
  • As mentioned before, you don’t have to worry about the nitty-gritty of buying and selling. Forget about things like ordering, stocking, storing and shipping, and just focusing on passing on the order and address to the supplier.
  • You’ll have a ton less overhead to pay for with no products to store.
  • You’ll also save money on shipping because you won’t have to do it!
  • Time will become more plentiful because there’s no order fulfilment to worry about — you can focus on growing your business in other areas.
  • A limited product inventory is of little worry because you can ‘present’ huge selections by teaming up with multiple suppliers or manufacturers. Variety, in this sense, can really help broaden your appeal.
  • Doing dropshipping on Amazon means you’re privy to their search engines and marketing tools so you can piggyback on the work that other sellers have already done.
  • You have immediate access to a potentially HUGE audience because of the sheer numbers that buy from Amazon.
Cons for Amazon
  • Having to eat an automatic 10-15% sell fee on every item (Amazon’s rules, not the seller’s) can really hurt, especially if the profit margin for an item is already slim.
  • The seller might tack on another ‘fee’ for you to use their services, making your end profit margin even slimmer.
  • You don’t have much — if any — control over how an item is marketed and advertised because of what Amazon says a product has to have.
  • You might have to deal with more customer support because you’re now dealing with two points, the buyer and the supplier, instead of just the buyer as without dropshipping.
  • Buyers won’t care about what’s going on at the supplier/manufacturer’s end; you’re their only point of contact, so you’ll have to reassure them, even if your supplier/manufacturer is having the issues.
  • You also can’t really develop any sort of warm or lasting relationship with your buyers because of the restrictions imposed on you.
Read the full article on RepricerExpress' blog
Posted in Repricing, Ecommerce
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