Platform Overview
Amazon FBA Overview
Amazon FBA requires inventory investment with Amazon handling fulfillment. Higher startup costs but more control over product quality.
Dropshipping Overview
Dropshipping requires no inventory with suppliers shipping directly to customers. Low startup cost but lower margins and less control.
Fee Comparison
| Aspect | Amazon FBA | Dropshipping | Notes |
|---|---|---|---|
| Startup Cost | $1,000-$10,000+ | $100-$500+ | FBA higher investment |
| Product Cost | Wholesale pricing | Supplier pricing | FBA cheaper products |
| Per-Order Profit | 20-40% typical | 10-30% typical | FBA higher margins |
| Time Required | 2-5 hours/day | 1-2 hours/day | Dropshipping less |
| Risk Level | Medium-High | High | Lower investment, higher competition |
| Inventory Control | Full | None | Dropshipping no control |
| Shipping Speed | Prime (1-2 days) | 7-21 days | FBA major advantage |
Our Recommendation
FBA offers higher margins and Prime eligibility. Dropshipping requires less capital but offers lower returns.
Key Takeaways
What to Consider
- Platform fees are only part of the equation - factor in fulfillment, shipping, and your time.
- Consider your product type and target audience when choosing between Amazon FBA and Dropshipping.
- Use our Profit Calculator to estimate exact costs.
Frequently Asked Questions
Is Amazon more expensive than other marketplaces?
Amazon's referral fees (8-17% by category) are among the highest in ecommerce. However, FBA (Fulfillment by Amazon) bundles storage, picking, packing and shipping into one cost, which can work out cheaper than self-fulfillment for individual sellers. Compare total landed costs, not just listing fees.
What is the difference between FBA and FBM fees?
FBA (Fulfillment by Amazon) adds $3.22-$52.38 per unit in fulfillment fees on top of referral fees (8-17%). FBM (Fulfilled by Merchant) only pays referral fees but requires you to handle storage, picking, packing and shipping yourself. FBA is usually better for sellers doing 100+ orders/month.
Data Methodology & Disclaimer
Fee data and benchmarks in this article are sourced from official platform documentation and cross-referenced with publicly available rate schedules as of April 2026. Calculations use standard fee formulas; individual results vary based on product category and specific listing details.
Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or tax advice. Check the latest rates at each platform's official seller fees page. Fee structures reflect publicly available information as of April 2026 and are subject to change. Always verify current rates before making financial decisions.