Amazon dropshipping is one of the most famous passive income methods in the world. Many Sri Lankans are also interested and currently earning a good income from it. As long as you meet with Amazon’s criteria, you can dropship without an issue. We thought that knowing the pros and cons of Amazon dropshipping in Sri Lanka would give you some valuable insights to decide if this is your new passive income or not.
Also, owning an online store is a great way to get more sales and upgrade your business into eCommerce. Find out the pros and cons of running your own online store vs. other platforms like Amazon.
What is Amazon Dropshipping?
Amazon dropshipping is an e-commerce business model that allows individuals to sell products on Amazon without physically handling inventory. Instead, sellers partner with suppliers or wholesalers who handle the inventory storage, packaging, and shipping. This means you can run an online store on Amazon without worrying about stocking products or managing logistics. It's a hassle-free way to start your own online business!
Tip- Did you know that offering free shipping can increase your sales? Click here to read more.
Pros of Amazon Dropshipping in Sri Lanka
- eCommerce Opportunity: Amazon is a global marketplace with over 300 million customers actively seeking products. By tapping into this vast customer base, Sri Lankan sellers can access a ready market, potentially leading to higher sales and profits.
- Low Startup Costs: Starting an Amazon dropshipping business requires minimal investment compared to traditional brick-and-mortar ventures. There's no need to invest in inventory upfront or rent a physical store. This makes it an affordable option for aspiring entrepreneurs in Sri Lanka. Find out how you can easily upgrade your Brick & Mortar store.
- Flexibility and Location Independence: Amazon dropshipping allows you to work from anywhere with an internet connection. Whether you're based in Colombo, Kandy, Ampara, or any other city in Sri Lanka, you can manage your online store and process orders remotely, providing you with freedom and flexibility in your work-life balance.
- Wide Product Selection: With Amazon's extensive product catalog, you have access to a diverse range of products to sell. You can choose popular niches or cater to specific customer demands, giving you the flexibility to adapt and experiment with various products to find the right fit for your business.
- Low risk and Low Space: With Amazon FBA, you don’t need to worry about paying for the shipping logistics or to pay for large warehouses. Find out how personalized shipping and delivery can help online businesses to grow.
Cons of Amazon Dropshipping in Sri Lanka
- Intense Competition: As Amazon dropshipping gains popularity, the competition among sellers also intensifies. Standing out and gaining visibility amidst the sea of sellers can be a challenge for new sellers as well as sellers that don’t do promotions or run any ads. To succeed, you'll need to develop effective marketing strategies, optimize your product listings, and constantly adapt to market trends.
- Fulfillment Challenges: While dropshipping eliminates the need for inventory management, it also means relying on suppliers or wholesalers to handle order fulfillment. This introduces an element of risk or mistakes in shipping that can impact customer satisfaction and your reputation as a seller.
- Longer delivery times: Even though it is not the seller's fault, the delivery might be months late unless you have taken additional steps to guarantee a timed delivery.
- Geographic Limitations: If you don’t own the products you may have restrictions on shipping products to Sri Lanka or may charge higher shipping fees due to the distance. This can limit your product options or result in higher costs, affecting your overall profitability.
- Zero quality control: In Amazon dropshipping, most of the time sellers use suppliers from outside, rather than mass producing the products themselves. In this case, as the seller you have zero control over the products you have listed because once the order is placed, the product is directly shipped from the manufacturer or your supplier to the buyer. You don’t get a chance to check the product quality.
Some facts depend on whether you are dropshipping your own products or selling from a manufacturer or supplier.
One is the profit margins. Another is whether you are a new seller or not. The competition factor does not affect much if you can find a less competitive niche to sell and then you can avoid price wars and keep high margins. Also, your knowledge about the market trends, and selling tactics as well as promotions play a big part in getting your Amazon dropshipping journey a success. And don’t forget that you have to pay Amazon for using their platform as well as the sale commissions they take. Learn more about the fees associated with online selling on other platforms.
Surely it is a profitable passive income. As always we suggest you should always do proper market research and prepare a business plan before you start.
According to Seasonsway.com here are some things you should avoid in Amazon dropshipping.
- Not having enough product sourcing or stocks ready for shipping.
- Purchasing products from another online retailer and asking the retailer to ship directly to your customer.
- Shipping orders with packing slips, invoices, or other information related to seller information other than your own. (Sending fake intel)
Amazon dropshipping presents an exciting opportunity for Sri Lankans to establish a profitable online business. With low startup costs, flexibility, and access to a wide range of products, it offers the potential for a steady stream of passive income. However, it's important to be aware of the intense competition and fulfillment challenges that come with this business model. By staying informed, implementing effective marketing strategies, and carefully selecting reliable suppliers, you can maximize your chances of success in the world of Amazon dropshipping.
Amazon dropshipping can be a viable option for Sri Lankans to explore the many opportunities of e-commerce and unlock their entrepreneurial potential. Will you be choosing Amazon dropshipping as your passive income in Sri Lanka?