Facebook Driven Dropshipping Vs Amazon FBA

Facebook driven dropshipping & Amazon FBA are two completely different ways of conducting e-commerce.

So different, that even the choice of products are almost always exactly opposite of each other.

On Amazon, while selecting a product to sell you make your best effort to avoid selling a fad, craze or a trend. You look for years and years of history, up-to 5 years, and only then make a decision if the product is worthy of the launch. You’re looking to keep the review ratings up, returns low, and ideally you want to sell the same products for several years. You spend one time to rank your products, and then rely on getting a return on your investment with organic sales over a long period of time. Due to this, you can often also sell your listing or store for up-to 3 years of net profit.

With dropshipping, most sellers plan to do the exact opposite; selling a fad or a craze. You’re ideally looking for something that has a lot of wow factor. Ideally it shouldn’t be a trend before and is some new kind of gimmickry. You plan to sell $1 million worth of it in the first month, or first the quarter, and once that’s done, no one ever talks about the product again. Fidget spinners could qualify as one of the best-selling dropshipping products and of course they were a fad. Because you make all the money right there, you store often flips for nothing. There’s often no or little lifetime value of the customer outside of the first sale.

Dropshipping needs no inventory and you can make a ton of mistakes. Wrong product selection costs you $100 in Facebook ads. You can test 30 products, lose $3000, and make it all back on your 31st product on your first day. With Amazon FBA, you can’t make any mistakes. You are pre purchasing inventory with hundreds of units to avoid going out of stock and to satisfy minimum order quantity requirements. You’re often risking tens of thousands of dollars with each product launch.

Dropshipping will often better suit those who are cash-strapped and have smaller appetite for risk. Amazon on the other hand is for big boys.

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