05/08/2022
Top3 Amazon business models -
1. FBA wholesale
2. Drop Shipping
3. FBA Private label (PL)
1. WHOLESALE FBA
WHOLESALE
With wholesale, you typically buy direct from the manufacturer – or from a middleman – and buy in larger quantities in order to get a lower price than you would at a retail store.
This is usually a business model you'd tackle after selling on Amazon for awhile. With wholesale, it's extremely important to understand things like sales ranks and sales history.
So you might buy 10 different products and get four of each — that's “going wide.”
But when you get into wholesale, you'll enter the world of “going deep.” In this Amazon business model, you'll often be required to place a minimum order worth hundreds of dollars.
PROS:
Lower purchase price means higher profit
As you find profitable items, you can reorder them over and over, thus increasing your product line every time you find a winner
When your purchase price is lower than other sellers, you have a better chance at winning the Buy Box because you can go lower on your sales price if needed
Buying in larger quantities allows your business to be more passive. It takes less effort to sell 100 of the same item than it does to sell one of 100 different items.
You can scale your business
CONS:
Larger investment of capital
Bigger risk than retail arbitrage because you are buying larger quantities. There is always a chance you get stuck with large amounts of a product you can’t sell.
2. DROPSHIPPING
When sellers drop-ship, they purchase from a retailer or wholesaler and then have the order sent to the customer.
This is the one business model listed that we actually DO NOT RECOMMEND!
Some sellers like this Amazon business model because they don't have to handle product. They feel there is a time savings for not having to prep and possibly a money-saver, too, if you've ordered enough product that you'd need to hire someone to help prep and ship it.
We stay away from it because we like to be more hands-on. With drop-shipping, you never get to inspect product before it gets shipped to the customer and you don't pack and ship it yourself, according to your standards.
PROS:
Sellers don’t handle the merchandise
No upfront cost
CONS:
Lack of quality control; seller doesn’t have the opportunity to inspect the product, nor to ensure that packing and shipping is handled in a way you would approve of
You run the risk of a product being out of stock and not being able to fulfill a customer's order
Many of the companies promoting “DropShipping” are actually running as MLM companies
This is not an area we have used or explored, so we don't have any recommendations for further learning at this time.
3. AMAZON FBA PL
Private label refers to the practice of purchasing a product and then putting your own branding onto it. Many times, Amazon sellers will purchase a product from China and then attach their own brand, logo and marketing to it.
This is one Amazon business model, along with wholesale, that has gotten more attentionrecently, as the list of restricted items got larger and some sellers found themselves suspended (usually temporarily) for selling those restricted brands.
With Private Label, you own the brand!
You don't have to worry about getting in trouble for listing products that are banned. And you can pretty much wipe out your competition because you branded the product yourself and created the listing.
This is the best business model.
In this model we hunt profitable product whose profit up to 30 percent.
Suppose we invest 30,000 Dollars then our monthly revenue will be 22000$ within 6 months we get 22,000 dollar back, means within 6 to 7 months our investment return and after 6 months monthly we earn 30% of 30,000$ which will be 6600$ per month.
And another beauty is that if we mantain 6000$ profit for 6 months then we can sell this business multiply by 30.
Suppose 6000*30=180,000 Dollars within 1.5 years.
FBA PL Is the best business in Amazon.
PROS:
Little to no competition because you are the brand owner
More control over price
No worries about items becoming restricted
You are building a sellable brand
Can have multiple product lines in one brand as you find winners
CONS:
Riskier than retail arbitrage and wholesale because the product typically has no ranking or sales history to draw upon
You have to market your products
You typically must purchase in larger quantities
Regards;
Abid ali
Amazon Virtual Assistant & Consultant
