Pros and Cons of Amazon Business Models

Pros and Cons of Amazon Business Models

Because anybody can enlist for an Amazon seller account doesn't mean they'll be successful at it, or that it's even the correct marketplace for them to sell on. This blog investigates the pros and cons of the different Amazon business models so you can choose what the best fit for you is.

Popular Amazon Business Models

1. Amazon Private Label

At the point when you sell as an Amazon private label, you're purchasing things in bulk from a vendor or maker and putting your own brand on it. They're generally generic things that appear to be unique from significant brands, so you probably won't confuse them with huge name pieces. Consider things like child food, tidbits, people's garments, home stylistic themes and that's only the tip of the iceberg.


  • You can engrave your own decisions and style on the product and brand.

  • You will choose the amount to order or create as opposed to being obliged to a company's decisions.

  • You don't need to follow through on brand name costs, so you can rival lower prices and win more clients.


  • It can take more upfront investment to make a private label — time and money spent in brand/logo design, fabricating a strong relationship with a supplier/manufacturer, spreading the news about your label, marketing its interesting parts, and so on

  • You'll need to work more earnestly at setting up trust for a not-yet-known label, particularly contrasted with more seasoned, better-known brands.

  • A great deal of product quality is out of your hands and you'll be depending on your supplier/manufacturer to make good pieces.

2. Amazon Wholesale

When you sell wholesale, you buy from a manufacturer in bulk at wholesale prices, then sell them at a higher cost on Amazon.


  • It'll be genuinely simple to source products however long the maker makes them.

  • You'll additionally have a genuinely simple time restocking inventory if the item is selling admirably — more noteworthy flexibly implies the maker will make more and you'll have the option to request and sell more.

  • You get the advantage of selling established brands, so you don't need to zero in as much on driving awareness to the item or building a client base.


  • You could confront tougher competition on Amazon on the grounds that different sellers need to capitalize on the discount benefits, as well.

  • You may struggle finding a product not sold on Amazon already (all so you can guarantee strength as its only dealer).

  • On the off chance that you don't have a long or proven selling history, you may get rebuked by brand owners from selling their products.

3. Dropshipping

Dropshipping is the point at which you go about as the middleman among customers and vendors or suppliers. Customers put in a request with you, you tell the provider or seller, and they fulfill the order to the client.


  • Since you needn't bother with an inventory of items, you won't need to stress over inventory listings and selling/fulfillment fees.

  • You don't have to pay any startup costs in light of the fact that the vendor has just done as such.

  • You can sell the same number of items first thing as the vendor has in stock or can sell.


  • You have no state at all in the product lineup that is created, which could conceivably line up with what your customers need.

  • Your buyers are at the impulse of the seller's shipping and fulfillment methods and timing, not yours (and not Amazon's).

  • Things like late shipments, damaged products or different types of shakiness can put your Amazon record and reputation in danger.

3. Retail Arbitrage on Amazon

Lastly, the Amazon plan of action of retail arbitrage includes you finding extraordinarily cheap items and selling them at a higher price and benefit on Amazon.


  • You don't have to chip away at brand recognition on the grounds that the products' brands are now settled.

  • What you charge and how much profit you make frequently comes down to the deals you're willing to source and how well you can spiff them up, so there's a great deal of control in your grasp.

  • By far most of startup costs are inventory-related, so you can keep them pretty low.


  • In case you're not well-practiced at discovering deals, you could be investing a great deal of energy searching for and buying truly reasonable things.

  • Since you're depending on discovering deals, you'll make some extreme memories scaling things up.

  • You could confront truly solid competition, particularly with things like electronics where buyers are happy to pay somewhat more for the most recent product with all the features.

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