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Home > Amazing FBA > Ways to Sell on Amazon – the 5 Main Business Models
Podcast: Amazing FBA
Episode:

Ways to Sell on Amazon – the 5 Main Business Models
Category: Business
Duration: 00:21:14
Publish Date: 2020-01-24 23:00:37
Description: Comparing Ways to sell on Amazon - 5 Amazon Business Models There are in fact multiple ways to sell on Amazon. But most Amazon sellers tend to fixate pretty early on a particular one of the ways to sell on Amazon. If you google "How to sell on Amazon", chances are high that in fact what you're going to be shown is how to private label products on Amazon (I know - I've looked!). "How to sell on Amazon" often means "How to do Private Label" Private Label IS a great way to sell on Amazon - if it's the right model for you.  What is NOT usually made clear is that private label means doing a large amount of work, spending very considerable sums and being willing to take a considerable risk. I know because I've done it multiple times and helped others do the same for about 4 years now.  You have to know how to do product research on Amazon; pick or design products; get them ordered (probably in China)and imported, then how to do an aggressive launch. Each of these skill sets is quite big - but the biggest by far is product selection or design and working with a manufacturer. It's a great skillset to develop but not to be underestimated. The other main ways to sell on Amazon Leaving aside non-physical products, like Kindle books or other Media products, there are in fact many more ways to sell on Amazon than the ones you may have deep-dived into. Here's a useful comparison table... Retail Arbitrageweekly or Monthly orders$100Simplest, cheapest, most legworkThis is the simplest, cheapest way to start selling on Amazon. But it's hard to scale and hard to get consistency. Very very cheap to start Very Low Risk Start selling within a week or two Turn over your cash fast Very inconsistent Sales Very seasonal Sales A lot of manual labour Hard to scale Not defensible No Intellectual Property Not a sellable businessOnline Arbitrageweekly or Monthly orders$100Still cheap, still quick, more complexSource anywhere . But again, it's hard to scale and hard to get consistency. Very very cheap to start Very Low Risk Start selling within 2-4 weeks Turn over your cash fast Again Very inconsistent Sales Again, very seasonal Again, not defensible Again hard to scale A lot of labour, this time at a computer No Intellectual Property Not a sellable businessWholesalersOrder every 1-2 Months2000The king of consistencyMore capital and training to start. Once set up, it's very easy to scale and easy to get consistencyModest capital to start Low to moderate Risk Start selling within 2-4 weeks Turn over your cash pretty fast Very consistent Sales Seasonality depends on product type No manual labour. A lot of research & emails, calls to start. Little work to continue. Easy to scale Moderately defensible once you've built No Intellectual Property (but you can own contractual relationships) Can be a sellable businessPrivate LabelOrder every 3-4 Months5000Your Own (Sellable) Brand Much more capital, training & time to set up. Easy to scale winners. You keep more profit and more controlMore serious capital to start High Risk, High Reward 3-9 Months to start Cash tied up for Months Consistent sales from WINNING products Seasonality depends on niche Lots of research & comms for each new product line. Easy to scale ONCE you have a winning product Defensible if your research & product are on point You own most Intellectual Property Proven to be very sellable businessesAgency Model$500Your Own Agency, helping other brands selllots more training and experience (1-2 years) to set up. But you have no skin in the game - so startup costs are low. Low capital to start (but...team costs) Lower capital risk, moderate reward Amazon selling experience of 1-2 years 1st Littlecash in business to start Sales Consistency depends on brand partners Seasonality depends on product type Lots of research & communications Scaling requires hiring, training & managing staff Becoming more harder to defend You own some Intellectual Property in processes pot...
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