Dropshipping vs Fulfillment by Amazon (FBA): Which Model to Choose

Dropshipping vs FBA: Which Model to Choose

Dropshipping requires no inventory - supplier ships directly to customers. Low startup costs ($100-500), low overhead, high competition. Margins are tight (10-20%). Supplier quality control is risky. Shipping times are often longer (2-4 weeks). FBA requires purchasing inventory upfront. Amazon handles storage and shipping. Startup costs higher ($2,000-10,000) for initial inventory. Margins better (40-60%). Fulfillment fees reduce profits but include customer service. Inventory risk - unsold stock ties up capital. Dropshipping suits testing new products cheaply. FBA suits proven products and scalability. Many sellers use hybrid approach.