Now let’s move over to discussing the pros and cons of Amazon FBA to help you choose between Dropshipping and FBA model.
- Larger customer base – you will have access to Amazon’s massive customer base.
- Brand recognition – FBA allows you to build your own brand identity with tools like A+ content and brand stores.
- Returns and replacement – Amazon helps process customer service, returns, and replacements.
- Better profitability – generally, the FBA model allows you to sell more for a good margin.
- Professional customer support – Amazon hires professionals to handle customer inquiries, returns, and refunds. They manage issues 24/7 and save you the trouble of getting someone to handle customer issues.
- Huge capital – you need to pay a fixed amount to avail Amazon services, not to mention inventory and storage fees.
- Limited product mix – you have to carefully consider your product portfolio since launching and on Amazon can be quite expensive.
- High dependency – you don’t have control over technical glitches in the backend or if Amazon decides to suspend your listings or account.
- Limited contact with customers – Amazon holds the record of your entire clientele, not you. You have limited access to your customer’s information.
- Sending products to Amazon – You have to follow very specific guidelines to send your inventory to Amazon, like labelling products and packaging dimensions. Failing to do so can lead to stranded inventories and more fees.
It’s not an easy decision. Ultimately, it will all boil down to how much investment you can make and how much risk you are willing to take.
Choosing the right fulfilment strategy can make or break your business. So do your research first and evaluate all the pros and cons.
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