On May 24th, Amazon once again imposed new inventory restrictions for FBA sellers. This new round of restrictions is the latest in a series of inventory limits dating back to March 2020, and comes as a result of FBA centers reaching capacity ahead of Prime Day.
While Amazon’s response is wholly understandable – they only have so much space at their fulfillment centers – their inventory restrictions still hurt FBA sellers. If sellers cannot stock enough inventory to meet consumer demand, they are actively bleeding sales.
So, what can sellers do to capture these sales that they will otherwise miss? Enterprise-level dropshipping. And as it so happens, we’re hosting a webinar about exactly that on June 29th.
Whom is this Webinar For?
This webinar is made for both small & medium businesses and enterprise brands that sell on Amazon. If your online sales rely on FBA, you should strongly consider leveraging dropship as a supplementary solution.
Just take a look at how we used dropship to support MyMedic, a brand in the First Aid category, overcome FBA volatility:
Mini Case Study
In 2020, quantity restrictions at Amazon FBA put MyMedic at risk. Their product was in high demand, but they did not have enough FBA inventory space to meet that demand. We partnered with them to fulfill orders through dropship, enabling MyMedic to continue capturing sales even if FBA ran out of stock.
The results? In a 3-month period, MyMedic sold an additional 2,100 units through dropship – that’s on top of their FBA sales! Without dropship, those are sales they would have simply lost.
How Else is Amazon Dropshipping Useful?
Historically, dropship has been seen as a less ideal option than FBA for Amazon sellers, and that’s still more or less true. Generally, FBA will be the preferred option. However, there are certain times when dropship may be preferable to FBA. Here are just a few examples:
Dropship Is Better For Amazon B2B
Generating over $25 billion in annual sales, Amazon Business offers rich potential. However, large volume orders, combined with FBA quantity limits, often makes dropship a better match for B2B orders.
Dropship Is Superior For Some Products
Not all products are suited for FBA. Plenty of types of products can be fulfilled more cost-effectively through dropship than FBA. This can include:
- Oversized products, such as instruments, sports equipment, or furniture
- Newer products that do not yet have the sales velocity to meet our PO thresholds
- Clothing and other products subject to rapidly changing trends
Gather Purchasing Data
Dropship can serve as a testing ground for FBA, allowing us to learn how products perform in the Amazon marketplace. We apply those learnings to successfully transition products to FBA.
We took this approach with PlexiDor Performance Pet Doors. After a poor experience with a third-party seller, PlexiDor was hesitant to entrust inventory with another FBA seller. They asked Kaspien to start with selling via Amazon dropship instead of FBA to prove we could drive sales and uphold their brand integrity.
We used dropship as a testing ground, building our understanding of PlexiDor’s products within the context of the Amazon marketplace. As we drove sales and earned PlexiDor’s trust, we transitioned products from dropship to FBA. We retained dropship capabilities for all FBA listings, which allowed PlexiDor to capture additional sales when Amazon reduced FBA storage limits.
- 100% of product catalog represented on Amazon
- 30 SKUs transitioned from dropship to FBA
- 75% sales growth year-over-year
- $185K Amazon ad sales at 6% ACOS
Attend our Dropship Webinar to Learn More
These are just a few examples of how dropship can be used effectively to grow your Amazon business. Attendees to our June 29th dropship webinar will learn even more about:
- Why you should set up dropshipping capabilities as a supplement to Amazon FBA.
- How to run Amazon dropship at scale effectively to capture additional sales and validate new products for FBA.
- Ideal use cases for dropship, including oversized products, slow sales velocity, Amazon Business, and more
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