Amazon FBA vs Dropshipping

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bdeffinger
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25 Jan 16 04:54:41 pm
I could You help as well...Amazon sounds like a great option but seems a little confusing with drop shipping. Drop Shipping sounds like a great option as i have limited time and no Start up money. Also Amazon's program where they take care of everything on their end. Not sure how it all works. I have read through training and still unsure where to start without a lot of risk. Thanks For any Help!

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fudjj
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Joined: 27 Jul 07
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25 Jan 16 07:30:24 pm
Hi Bryan and welcome to the forum,

Dropshipping is of course a very low cost way to get into the market, that's its big draw. Of course one of its big drawbacks is super tight competition and limited margins. Another advantage it offers is that you don't need fulfillment services such as Amazons warehousing service because your dropship supplier essentially provides you with that service.

Fulfillment services are designed for wholesalers, those who buy in large volume to secure the best price. It then provides them with warehousing space for storage and of course, dispatch facilities to get orders out to customers. With dropshipping, there is no stock to warehouse, the dropship supplier holds the stock for you and of course also then dispatches it direct to your customer.

So with dropshipping, you are essentially acting as an sales agent selling someone else's product. You do all the marketing, you get the sales and fro there, it's all down to the supplier to complete the transaction.


Mark (fudjj)

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Full Member
bdeffinger
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Joined: 23 Jan 16
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25 Jan 16 08:48:14 pm
So is there a way to get started as a drop ship business without any upfront costs... If so how and if not wha would be my best option?

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fudjj
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25 Jan 16 09:27:49 pm
While it's getting very common for dropshippers to charge either an account fee upfront or a monthly fee, the great part about dropshipping, you're costs are essentially limited to your marketing. That said, if you're going to be selling on a platform like eBay then you have to be careful not to get too carried away. A big rookie mistake is that people rush in and list 100s of products because they think, well it's not costing me anything and it's increasing my chances of getting a sale, but of course the kicker comes when you get the eBay listing fee charges.

If you use that method, but don't price competitively enough to create sales volume, then those listing fees can drag you under real quick. When listing a dropshipped item, you also have to be very careful to calculate your costs. Listing costs, final sales costs, payment gateway costs, shipping costs and anything else related to the sale or again, you can end up loosing money on a sold item.

How to get started, well that comes down to research. You have to research your products, research your competitors and then research suppliers. When you've found products that you want to go with, then start listing.


Mark (fudjj)

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SaleHoo.com

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