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Amazon FBA vs. Dropshipping | What Are Their Differences?

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Created on October 18, 2024 – Last updated on February 6, 20254 min read
Written by: admin

Are you considering entering the world of eCommerce but unsure whether to choose Dropshipping or Amazon FBA? These are two of the most popular and successful fulfillment options available. The question is, which one is better suited for your business?

Amazon FBA vs. Dropshipping

In this article, we will break down the key differences between these two methods, comparing their pros and cons to help you make an informed decision. Whether you’re looking for low-risk startup solutions or more automation, this guide will provide valuable insights for growing your online business.

What is Dropshipping?

what is dropshipping

Dropshipping is a business model where you don’t hold any inventory. As a seller, you list products in your store, and when a customer places an order, the supplier ships the product directly to them. For those looking to start selling with minimal costs and lower risks, dropshipping is a great choice. You don’t need a warehouse or worry about logistics. You only pay after a sale is made. However, dropshipping requires careful management of suppliers and effective marketing to bring traffic to your store.

What is Amazon FBA?

How Amazon FBA works

Amazon FBA (Fulfillment by Amazon) is a service that allows you to send your products to Amazon’s warehouse, and they handle storage, packing, and shipping when an order is placed. You won’t need to manage packaging or logistics, as Amazon will also take care of returns and customer service.  Commonly, you can say it is an automated dropshipping Amazon service.

FBA is ideal for sellers who want to leverage Amazon’s vast customer base and logistics network. Products become eligible for Amazon Prime shipping (Amazon Dropshipping), attracting more buyers. However, FBA requires upfront inventory investment and fees for storage, shipping, and fulfillment.

Dropshipping vs. Amazon FBA: Key Differences

dropsure vs. amazon fba

To make it easier for you to understand, We’ve prepared a comparison table that highlights the key differences and similarities between Dropshipping and Amazon FBA.

Here’s a table you can learn about Amazon FBA vs Dropshipping. We hope this will help you decide which option is better suited for your business.

Feature Amazon FBA Dropshipping
Upfront Investment ❌ High startup cost, inventory needed ✔ No upfront investment, pay as you go
Inventory Management ❌ Requires pre-purchased inventory ✔ No inventory needed, ship as you sell
Order Fulfillment ✔ Amazon handles fulfillment ❌ Manual handling, but can use automation
Advertising ✔ Built-in Amazon advertising ✔ Flexible, use any platform (e.g., Meta ads)
Profit Margins ✔ Discounts for bulk orders, but high fees ❌ Higher product costs but no fees
Customer Contact ❌ No direct contact with customers ✔ Full control over customer interaction
Customer Base ✔ Access to Amazon’s customer base ❌ Need to find your own customers
Control ❌ Limited control, Amazon handles everything ✔ Full control over your business
Scalability ❌ High costs to scale, limited flexibility ✔ Easy to scale, especially for new businesses
Risk ❌ High risk with inventory investment ✔ Low risk, no inventory holding

While both Dropshipping and Amazon FBA are effective ways to sell products online, they each have their own unique advantages and challenges.

Choosing between Dropshipping and Amazon FBA depends on your business goals. If you’re just starting out and want low-cost, low-risk options, Dropshipping is a flexible choice. It offers no upfront investment and more freedom to scale. If you have the budget and want to leverage Amazon’s strong infrastructure, Amazon FBA might be the better option. Both methods provide great opportunities for building a successful eCommerce business—so choose the one that best fits your needs.

If you prefer automation and don’t want to handle inventory, Dropsure could be your best choice. (Want to learn more about Dropsure’s platform and features? Please read What is Dropsure for more details.) It combines the flexibility of dropshipping with the automation benefits of FBA, offering a low-risk, no-inventory solution.

 

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Keep Learning

In 2025 and there are tons of dropshipping resources for newbies. You have access to free courses or can pay for courses led by experts. There’s something for every skill level and budget. If your goal is to learn Shopify, or find trending products, or run ad campaigns, there is a course for you. This guide covers the best courses and their main features. We will also share some bonus learning tips. Alright, time to pull out a notebook and some comfy pants because we are getting your dropshipping dreams going! Why Should You Take A Dropshipping Course? Starting a dropshipping business can feel like trying to assemble a puzzle without all of the pieces. You have to choose the right products, set up a working store, and market like a pro. It can feel overwhelming. Thankfully, dropshipping courses can point you in the right direction. It’s like having a personal tutor who walks you through everything. You will discover how to find trending products, create a professional-looking store, and manage profitable ad campaigns. If you want to start a side hustle, or leave your 9-to-5 job, the right course can change the game. It’s like having a roadmap. Why struggle along a path of trial and error when you can learn from someone who has already blazed the trail? The best part? These are courses for all levels. You will find a course that is training for you whether you are starting or wanting to up your game! Key Courses Overview If you are prepared to begin dropshipping, selecting the proper course is critical. Here’s a closer look at the top courses for 2025 and what sets each of them apart. Dropship Lifestyle (DSL) If you are serious about building a long-term, sustainable dropshipping business, Dropship Lifestyle (DSL) […]

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In New Zealand, as online shopping becomes increasingly mainstream and the local environment continues to support small businesses, more and more entrepreneurs are turning their attention to Dropshipping—a low-cost, highly flexible e-commerce model. This business approach doesn’t require you to hold inventory or invest a large amount of startup capital. With just a computer and a stable internet connection, you can run your own online store from the comfort of your home. For Kiwis looking to build a side hustle or generate online income, it’s an especially attractive option. As long as you know how to select products that match market demand, and pair them with basic branding and marketing strategies, Dropshipping can become your gateway to carving out a spot in the competitive e-commerce space. In this article, we’ll walk you through how the business model works, the steps to setting up your store, and the key pros and cons—so you can confidently take your first step into New Zealand’s growing dropshipping landscape. What is Dropshipping? In New Zealand, dropshipping has become an increasingly popular online retail model, especially among aspiring entrepreneurs. The biggest appeal? You don’t need to purchase inventory upfront or hold stock—you can run a full-fledged online store from home without investing a large amount of capital. Compared to traditional retail, dropshipping has a much lower barrier to entry and offers greater flexibility, making it ideal for those with limited startup funds or people looking to build a side hustle while balancing work and family life. The process is straightforward: set up an online store (popular platforms include Shopify, WooCommerce, and even local sites like Trade Me), choose products from a supplier, and upload the product information […]