Usually, starting a business will only require you a huge amount of money and a background of the industry you’re planning to operate in. Once you’ve ticked these off your list, you can set up your own brick-and-mortar store and start selling your products and services. However, to effectively run a business and make sure that it stays afloat for the longest time possible, these two components aren’t enough. For you to achieve these goals, you have to market your products, properly store all of these products, pack orders, and ship these to your customers. Accomplishing all of these tasks promptly can create too much pressure, especially for neophytes.
Aside from being one of the world’s biggest online selling platforms, Amazon also offers services to help different businesses thrive and grow. When you acquire this service, you’ll ship your products to one of Amazon’s fulfillment centers, and they will pick up, pack, and ship customers’ orders on your behalf – a business model which is referred to as dropshipping. To paint a clearer picture of how dropshipping works, consider some of its benefits:
1. It’ll be cheap for your business to fulfill orders
When you’re selling products, you’re required to have a warehouse to store all of your inventory properly. You’ll also need to hire people to take care of the orders – from organizing, tracking, labeling, and shipping orders from the warehouse to the customers’ doorsteps. All of these responsibilities will be taken off your shoulders once you use dropshipping services. Amazon will handle all of these for you, and your only job will be to accommodate customers’ orders. This will give you more time to manage other aspects of your business for increased profitability.
2. It doesn’t require an expensive investment upfront
Most people can’t start their own business because they don’t have the financial resources to do it. Regardless of how adept they are in the products they’re planning to sell or the trends in a specific industry, if they can’t make any financial investment, their dreams of becoming a business owner will remain just that – a dream. FBA dropshipping services can turn this into a reality. This service doesn’t require you to have a brick-and-mortar store, a warehouse, and a huge bulk of products. Amazon will take care of your inventory, and you can always buy products from suppliers to resell. You can start running a business as soon as possible!
3. You can sell different kinds of products
You’re not the first or only business that utilizes dropshipping, FBA, or both. In fact, many businesses have been using these strategies for years. But because you don’t have to pay for the maintenance of a warehouse and worry about overhead costs, you can maximize these services by selling different kinds of products. You don’t have to worry about investing too much on these varieties because with dropshipping, you’ll only pay for the products you sold.
If you’re leaning towards this direction, just make sure that you’re marketing your products properly. Since you’re a new business that offers new products, it’s vital that you have a marketing strategy in place. Video marketing is one of the many ways you can promote your products and drive traffic to your online shop.
Fulfillment by Amazon can be used by a wide variety of businesses, regardless of its niche, size, and goals.
However, just like anything else in this world, nothing can all be good – and that includes FBA dropshipping. Aside from looking into the benefits of this business model, you should also be wary of the following cons associated with it:
1. Your customer service will be affected
For a business to succeed in the long term, it should continually engage with their customers. There should also be an avenue for customers to contact the business so the business will know what to improve or what to offer. When you acquire FBA dropshipping, you’ll be hindered to do all of these. Amazon will work as a middleman, and it will be the one who’ll get in touch with your customers. You won’t have any idea what your customers want from your business or if your business is actually doing well in the market.
2. You’ll have less control of the order fulfillment
Dropshipping services might save you from paying expensive costs of building and maintaining a warehouse, but your business can still face grave consequences once a customer isn’t happy with your service or products. For instance, when you use FBA for your business and Amazon commits a mistake in your customers’ orders – such as by sending the wrong product, a damaged product, or an order that’s a month delayed from the schedule – customers will take these against your business. When this happens, you’ll end up losing customers, and you’ll create a negative image in the business. If you want to steer away from these problems, only work with a credible and reputable manufacturer or retailer. How they perform will make or break your success as a business.
3. You’ll rely on another party for stocks
You can also use dropshipping for your business by acquiring products from a manufacturer and sell these as your own. This can be viewed as a convenience, especially for businesses that don’t produce their own products or for businesses that are still testing the waters. However, this is actually a double-edged sword: you’ll not be burdened in producing your own products, but when this manufacturer runs of stocks, your business will, too. You can’t control their inventory, which can result in more idle time and lost customers for your business.
Preparation Is Key
While dropshipping might be an easy and fast solution to create a brand in the World Wide Web, it’s important that you carefully analyze this business model first. The same amount of research you put into knowing your competitors, your customers, and the industry should also be exerted on learning about dropshipping. When you’re able to look at this business model from different angles, it’ll be easier for you to maximize its pros while reducing the effects of its cons.