What is the Best Business Model to get into in 2017?
In this video I cover Amazon FBA, Drop Shipping, Digital Products, Affiliate Marketing and Ecommerce Stores.
Amazon FBA
Amazon FBA is a service by Amazon that stores your products at their warehouses, picks, packs and ships and provides customer service.
Pros:
- If selling thru Amazon you will get the Buy Box more
- “Send and Forget It” – Amazon handles picking, packing,shipping,customer serviced returns
- Volume – You don’t have to worry about warehousing product
- Sale Increase
- You don’t have to worry about shipping product to other International markets
- Product Protection – If the product gets lost, damaged you get reimbursed.
- You can focus on selling instead of fulfilment
Cons:
- You need capital to start importing – $3000 to $10,000
- You need knowledge of importing – you can learn
- You need to know if product is going to sell before investing in buying the product
- Higher Risk if cannot sell you product you may lose money
- Takes Time: 1 to 3 months from importing to selling
- Lack of Control – You can be banned, fees can go up. You have to follow their rules
- Shipping Delays to Amazons Warehouse
- Tax Requirements
- Returns will increase
- Fees for everything and it’s not getting cheaper
- Delayed Payments
- Ruthless Amazon competitors
Digital/Info Products
Digital products are intangible products sold in digital form. Examples are ebooks, webinars, fonts, graphics, software, interviews, courses, themes.
Pros:
- Minimal Storage Cost
- No Inventory Problems
- No Shipping Problems
- Instant Delivery
- Extremely High Margins
Cons:
- Technical Support – Servers, Technology
- Competition
- Easily Copied
- Takes time/money to create a product
- Marketing digital products are more difficult than physical products
Drop Shipping
A method whereby the seller does not stock inventory and transfers orders to a manufacturer, wholesaler or another retailer, who then ships the product directly to the customer.
Pros:
- No Inventory
- No Upfront Risk
- Easy to Setup
Cons:
- Lower Margins
- Rely completely on your drop shipper to fulfil orders
- Lack of control over product quality, time to process orders, shipment errors
- If drop shipper makes mistake, you still need to make it right with your customer
- Additional costs, fees and underhanded tactics
Affilate Marketing
Affiliate Marketing is a form of revenue sharing. Commissions are paid for referring business.
Pros:
- Easy
- No Upfront Costs
- Low Risk
- Passive Income
- Work Anywhere
Cons:
- You don’t own the customer unless they are your customer first
- You don’t control the offers and fulfilment
- You may not get paid your commissions
- Competitors may hijack your affiliate commissions
- Paid Advertising is costly if you are not converting sales
Ecommerce Store
Having your own store on your own domain.
Pros:
- Easy to Start
- Low Risk
- Does not have the costs of traditional “Bricks and Mortar” stores
- Your store is an asset and can be sold
- You can incorporate drop shipping, Amazon FBA, Digital/Info Products and Affiliate Marketing methods into your own store
Cons:
- If you carry stock you will need capital to purchase inventory and storage for products
- If you fulfil orders you will need someone to pick, pack and ship orders
- Competition from Amazon, other marketplaces and other sellers
- You must know how to get traffic to your store
