📦 Amazon FBA vs. Dropshipping – Which Acquisition Makes Sense for You?

If you're planning your next e-commerce acquisition, you’ve likely come across two dominant models: Amazon FBA and Dropshipping. Both have advantages, but they suit very different strategies.

Let’s break it down:

Amazon FBA (Fulfillment by Amazon)

How It Works:
You source products, ship them to Amazon’s warehouses, and let Amazon handle fulfillment and customer service.

✅ Key Advantages:

• Tap into Amazon Prime’s massive audience and fast shipping capabilities.

• Amazon handles fulfillment and returns, saving you time.

• Many FBA brands command higher exit multiples due to scalability and automation.

❌ Key Drawbacks:

• Amazon’s fees (referral, storage, fulfillment) cut into margins.

• Less control over customer data and brand loyalty.

• You’ll need to buy inventory upfront, increasing capital risk.

Where to Source Inventory:

• Alibaba, U.S. manufacturers, private label suppliers.

Storage Solution:

• Amazon FBA warehouses handle storage and fulfillment directly.

Dropshipping

How It Works:
You list products on your online store and your supplier ships directly to your customer—no inventory needed.

✅ Key Advantages:

• No inventory investment required upfront.

• Greater brand control and flexibility (Shopify, WooCommerce, etc.).

• Easy to test new products quickly.

❌ Key Drawbacks:

• Lower margins due to supplier fulfillment costs.

• Longer shipping times, especially if using overseas suppliers.

• Heavy dependence on suppliers for quality and fulfillment.

Where to Source Products:

• Oberlo, Spocket, U.S.-based dropshipping networks, print-on-demand platforms.

Storage Solution:

• None needed—suppliers handle all fulfillment.

Which Business Would You Rather Acquire?

• Choose Amazon FBA for a turnkey model with logistics handled by Amazon and broad market reach.

• Choose Dropshipping for low-risk testing, lean operations, and full control over your brand’s customer experience.

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— Acquire Weekly Team