Evaluating Profit Margins: Dropshipping on Amazon vs. Shopify

Introduction 

Are you thinking of starting your own online business? There are platforms like Amazon and Shopify that can help you set up your business. But first, one key feature you should know about is “dropshipping.”
Both Amazon dropshipping and Shopify dropshipping are great choices for businesses that want to simplify their day-to-day functioning. To learn more about what dropshipping entails and if it can help your business, we recommend you dive into this article.

What is drop-shipping?

Imagine running an online shop. You find yourself stretched thin, worrying about making, storing, or delivering your products. But what if you didn’t have to? That is the magic of dropshipping! A dedicated company handles all these tasks, saving you from daily stress. It’s a great start for anyone new to business.
By dropshipping, you take on the role of an online retailer’s middleman. Product manufacturing, storage, and transportation become someone else’s burden. It’s quite beneficial, particularly if your business is just getting started. Your only concerns should be selling your goods to the appropriate clientele and making sure they receive the greatest after-sale assistance.
Maybe the nicest thing is that you don’t have to purchase a large number of goods at once. When the orders come in, you merely purchase one thing at a time. You can now invest more in your marketing and customer service. Plus, it’s simple to get started because major corporations like Shopify and Amazon offer dropshipping services.
Now, you might be thinking, “But the profit is only 20% to 30%, that’s peanuts!” But here’s the kicker: with dropshipping, you can handle loads more orders than a regular shop. So, in the end, you could be making just as much as a regular shop, and that too without the operational headache.

Amazon Dropshipping

The Amazon dropshipping service is called Fulfillment by Amazon (FBA). With over 280 million visitors each month, Amazon is a platform that all businesses ought to take into account.
The first step is to create an FBA account, register as an Amazon seller, list your products, and send them to an Amazon fulfillment center.
Amazon charges a few fees, such as:

  • Referral fees, starting at 2%
  • Closing fees, starting at ₹5
  • Shipping fees, starting at ₹29 per item

Other fees are based on the programme or services you sign up for.
All of this usually culminates in around 10% of your selling price. Thus, your profit margin largely depends on how you price your product.

Dropshipping Shopify Stores

Shopify offers a unique experience where you can create your entire brand identity using their platform. To the customer, it appears like any established brand or business page. At the back end, however, Shopify handles the load.
Shopify dropshipping provides you with a wide range of choices. It is advised that you conduct extensive research before selecting your dropshipper after setting up your Shopify store and deciding on your specialization. Orders placed by customers at your store are simply forwarded to your supplier, who fills them.
Shopify has an array of suppliers you can choose from. As such, their rates of service vary. But as you will be spoilt for choices, you can choose a provider who fits your requirements and budget.

Shopify vs Amazon Dropshipping A Comparison

While both Amazon and Shopify are great choices for dropshippers, there are a few factors to keep in mind.

Amazon Shopify
Immediate access to a large customer base.  There is a better opportunity for personalisation. 
Limits options for suppliers as it promotes Amazon fulfilment services over others.  Even have the option to choose a supplier with the shipper of choice. 
There is a higher probability of overall profit due to the number of orders.  There is a probability of better profit per item as more dropshipping options are available at competitive rates.

Conclusion

If you are looking for exposure, Amazon may be the platform for you. However, if personalisation and branding take the front seat with you, Shopify offers the kind of service you need.
For example, using a logistics partner such as Shipyaari can have an excellent impact on customer service. With Shopify, you can go with a supplier who avails of their services. Before you make up your mind, we recommend you go through it.
Whether you choose Amazon dropshipping or Shopify, as long as you do your due diligence, your business will most definitely thrive!

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