This a question a lot of people find themselves asking: which of these two models is better. The answer may surprise you — it may not — but to be sure that you understand it either way, we’re going to analyze all the pros and cons of each model and comparing them.
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These pros and cons will be as unbiased as possible in order to keep things more accurate. It should also be noted that regardless of what model you choose, it is possible to make stupid amounts of money with either. Let’s start with what each model is.
Shopify Dropshipping: What is it?
To use Shopify Dropshipping is to create an online store with Shopify. Once you have, you create your own product list, and these lists will usually have products that are geared toward a specific niche or a specific category.
You won’t have nay of these products actually on hand, however. You’ll only order the products on your list after a customer has purchased one. This means that the startup cost for Shopify shipping is very low because you don’t actually pay for your products until a customer has purchased one.
Shopify Dropshipping: Pros
The only thing you have to pay for when starting up with Shopify is the monthly cost of keeping your online store open, which is about 30 dollars a month paid to Shopify itself. Not bad considering everything it could have you pay for right out of the gate.
Another pro is that it’s much easier to build your brand on Shopify. This pro owes itself to the fact that Shopify allows you to collect customers emails, making it easier for you to market to the customers who’ve already proven themselves to have an interest in your products.
You can also use your social media links to market your Shopify store. You can connect it to your Facebook, your Instagram, etc. It’s also just much easier to conduct customer service on a Shopify store.
Shopify Dropshipping: Cons
Now for the cons.
One thing about Shopify is that while it’s easy to start up a store, the same can’t be said for maintaining it. You won’t have any customers at all when you open up shop. No one of the face of the planet will know you have a Shopify store unless you tell people that you do.
The next con (and this could probably be considered the worse one out of the bunch) is that you have to learn and pay for all of your facebook ads. If you don’t do this, you won’t be able to continuously drive traffic to the store as necessary.
You will also have to do a lot of testing before you find the product or niche necessary. This means that while the start up cost for Shopify is fairly low, you’ll still have to devote a lot of time and money to finding the perfect niche. You’ll have to spend this same time and money finding the perfect Facebook Ad for this niche as well.
Finally, product life cycles are much shorter with Shopify Dropshipping, meaning that even if you do find a winning product, it won’t be one forever or even for very long. People will start to pour into your market, and once that happens sales will start to decline. You’ll have to start your search over.
Amazon FBA: What is it?
You should already know what Amazon is, so to start will define “FBA.” FBA stands for “Fulfillment by Amazon.” To use Amazon FBA is ship your inventory to an Amazon warehouse. Once there, Amazon will ship any products of yours that you sell out to your customers for you. Let’s look at the Pros and Cons.
Amazon FBA: Pros
Instead of saving the best for last, we’re going to start with it: there are over the 300 million active Amazon users across the world. This makes it the biggest market place in the world and therefore one of the best places to find an opportunity to make money.
There’s less risk using Amazon FBA than there is Shopify. If you do the proper product research up front you’re almost guaranteed to make money.
Another pro is that you don’t have to pay for ads. Despite this, though, It’s still recommended that you use the Ad generator that Amazon provides. Still you don’t have to use Facebook ads or any other outside ad sources.
Finally once you find your product you’re golden. There’s much less work involved in this process than with Shopify. Once you start making money off of your chosen product, the only thing that you have to do afterward is restock yourself when you run short of said product. No rigorous testing. This in turn makes the life cycle of products much longer (unless it’s a passing fad of course).
Amazon FBA: Cons
There’s a much higher startup cost. With Dropshipping, you don’t have to buy your products outright, FBA is the opposite. You’ll need about a 1000 dollars just to start.
Another con is that it’s much harder to build a brand on FBA than it is with Dropshipping, especially if your main goal is to find profitable products all the time (and whose goal isn’t?).
Another con is that with Amazon, there’s definitely much more research to be done up front. For beginners, the product research phase can be pretty mentally draining, but again, once you find that product, you’re golden. Make sure you have all your checks marked and that you know your product inside out, and you’ll do more than fine.
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Which one is Better?
Most people seem to prefer Amazon FBA, which is understandable. Remember, FBA has a massive market place, one that’s available to you right from the start. Yes, it’s cheaper to start up, but you start to turn a profit much quicker on FBA. The reason is simple: with Dropshipping, you start off with no customers. With FBA you have the potential of 300 million.