Do you want to start a dropshipping business but are torn between Amazon FBA and AliExpress dropshipping?
Look no further; this article will provide a quick and easy overview to help you make the best decision for your business.
Dropshipping is one of the ways you can make money online, and we’re excited to look at the differences between Amazon FBA and AliExpress dropshipping.
What is Dropshipping?
Dropshipping is a retail fulfillment method where an online store doesn’t keep the products it sells in stock.
Instead, when a store sells a product, it purchases the item from a third-party supplier and has it shipped directly to the customer. As such, the merchant never sees or handles the product.
Why Choose a Dropshipping Business Model?
Dropshipping is a great way to start an online store with limited resources.
As a merchant, you don’t have to worry about stocking or shipping products, eliminating many of the costs associated with running an e-commerce business.
Furthermore, with dropshipping, you don’t need to commit significant sums of money to purchase the seller’s inventory.
What is Amazon FBA?
Amazon FBA stands for “Fulfillment by Amazon.” As an Amazon seller, you send your products to their warehouse, where they store it and handle the shipping of orders to customers when they are placed on Amazon. Many companies use this service because it eliminates the need to store and ship products yourself.
What is AliExpress Dropshipping?
AliExpress dropshipping is a way to sell products without ever stocking inventory. It works by partnering with AliExpress, an online retail platform that carries millions of products from suppliers worldwide.
When a customer places an order on your website, you purchase the item from AliExpress and have it shipped directly to the customer.
Now that you know a little about each business model let’s look at their pros and cons:
Pros of Amazon FBA
Amazon FBA has plenty of advantages, as discussed below.
- First, as the largest eCommerce site, Amazon has a broader reach. You can achieve huge sales now that the company boasts over 300 million active users.
- The second advantage of dropshipping on Amazon is the brand’s trust. As mentioned earlier, many shoppers are more willing to buy from Amazon than other eCommerce sites.
- Third, Amazon also has a robust logistics infrastructure so you can be sure that your customers are getting their orders on time. As you may be aware, delivery turnaround is a key purchase driver, especially among Gen Z consumers.
Another advantage of dropshipping on Amazon is Amazon Prime. For starters, this is an exclusive service that gives members several extras, including shipping.
According to statistics, Amazon Prime increases sales exponentially.
Cons of Amazon FBA
While Amazon dropshipping has several advantages, there are also shortcomings.
- First, there is stiff competition on Amazon. The platform has over two million sellers. So, to stay on top of your game, you might have to invest in marketing or bring down your prices now that other sellers are selling the same products as you.
- Another disadvantage of Amazon dropshipping is the strict rules and regulations. The company is known for banning seller accounts without any warnings or explanations. Simply put, Amazon is not dropshipping-friendly.
- Third, to run a dropshipping business on Amazon, you need a paid subscription, whether the Individual or Professional plans. That means it’s not free to operate a dropshipping business on the platform.
Pros of AliExpress Dropshipping
Starting a dropshipping business on AliExpress has several advantages.
- First, AliExpress is a drop-shipping-oriented eCommerce platform. Even though it started as a B2B platform, today it is B2C and C2C-oriented, so it naturally favors drop shipping. AliExpress doesn’t sell to consumers directly.
- The second advantage of dropshipping with AliExpress is the low prices. As you may know, this is a Chinese company, and most suppliers are from China. The lower manufacturing costs and competition among Chinese manufacturers translate to lower prices.
- There’s also the benefit of packaging. Unlike Amazon, which packages orders using the company logo, you can use custom packaging. This way, you can grow your brand.
Cons of AliExpress Dropshipping
AliExpress dropshipping has advantages, but there are also disadvantages, as discussed below.
- First, there have been many issues regarding product quality. Now that there is no quality control, there are chances your customers will receive cheap knockoffs, which will hurt your brand.
- Second, AliExpress shipments take ages to be delivered. This is especially true if your customers are far from China, where most orders are shipped.
- Slim margins are also a cause for alarm when dropshipping with AliExpress. While the prices of commodities on the platform are low, it means your margins are also low.
- Lastly, the refund and returns process is hectic. In most cases, returns could take up to three months to be actualized. Again, this is something that will hurt your brand.
Verdict: Amazon FBA vs. AliExpress Dropshipping
Both Amazon FBA and AliExpress dropshipping have pluses and minuses.
If you are looking for a platform with a wider reach, better customer trust, fast delivery turnaround times, and exclusive service to members, then Amazon FBA is the better option.
However, if you want access to low prices and custom packaging, then AliExpress dropshipping is the better choice.
It all depends on your goals and objectives as a business owner. Consider both options and decide which one best fits your needs. That way, you can grow your business without any hitches. Good luck!
Frequently Asked Questions
The answer depends on your goals and objectives as a business owner. If you are looking for a platform with a wider reach, better customer trust, fast delivery turnaround times, and exclusive service to members, then Amazon FBA is the better option. However, if you want access to low prices and custom packaging, then AliExpress dropshipping is the better choice.
It depends on your business goals. FBA makes sense if you are looking for a platform with a wider reach and better customer trust. Dropshipping is the better option if you want access to low prices and custom packaging. Consider both options and decide which one best fits your needs.
No, Amazon does not allow AliExpress dropshipping. The platform has a strict policy that forbids third-party sellers from selling products sourced from other platforms. All products sold on Amazon must be purchased through the platform.
Alternatives to AliExpress for dropshipping include Oberlo, Spocket, and Banggood. All these platforms are great options if you want access to more reliable suppliers and better customer service.
Yes, you can lose money with Amazon FBA. The platform charges a range of fees and there is also the risk of customers not buying your products or returning them due to quality issues. To avoid losses, ensure you know all the costs associated with FBA before deciding to use the service.
No, you don’t need an LLC to start an Amazon FBA business. You can open a seller account and start selling your products. However, it is highly recommended that you register for a limited liability company (LLC) to protect yourself in case of legal issues or damages caused by customers.
