Amazon FBA vs Shopify vs Affiliate Marketing

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Hello once again guys welcome back to the channel hope you’re having a great day so far so what we’re gonna be talking about in this video today is the best possible online business to start and i know that there’s a lot of different options out there in terms of starting your own online business we talked about a lot of different ideas here on this channel but

There are three core areas or businesses that i think are talked about the most and so what i wanted to do in this video is do a comparison of these three businesses because if you’re anything like me you guys are getting bombarded on youtube and facebook with ads surrounding shopify amazon fba or affiliate marketing and it’s probably something like trying to

Take a sip from a firehose if you’re trying to explore these different businesses because you have so much information coming at you at once now i’m just going to be transparent with you guys i am an affiliate marketer and so naturally i’m going to be biased towards affiliate marketing here but i’m going to try to do my best to give you guys an honest overview

Of these three different businesses to maybe help you better understand you know which one might be a good fit for you but if you are actually looking to start one of these businesses i would highly recommend following some other youtubers who do shopify or amazon fba and learning from them as well because of my obvious bias here towards affiliate marketing and

In particular i’ve never really talked to anybody who does shopify one of my close friends jordan the millionaire millennial i’ve done some videos with him he’s quite successful with amazon fba and i’ll link up the interview series i did with him in the description below he’s a great person to learn from if you’re looking to explore this idea and learn more about

Amazon fba but that being said let’s break it down let’s look at these three different business models and talk about the differences between them so first of all the age of these different businesses how long have people been doing shopify in amazon mostly in the last five to ten years now amazon and shopify have both been around for 15 to 20 years but only in the

Recent years has it really become a viable business to essentially you know have your own shopify dropshipping store or do you know amazon fba and if you guys aren’t familiar with these businesses at all essentially what you’re doing with shopify is doing drop shipping so you’re buying a product from overseas typically from alibaba or aliexpress and then you’re

Bringing it over here to the us maybe you’re repackaging it and then you’re selling it for a higher price over here and you’re essentially just the middleman making that profit now the difference between shopify and fba is primarily the fact that amazon is going to be fulfilling that order so you order stuff from again alibaba in most cases you ship it over here

To the us and it goes to an amazon warehouse for fulfillment assuming you don’t have any packaging going on in between and then when somebody orders your product off of amazon while amazon is going to fulfill that entire order and then third of all on our list here you know we have affiliate marketing which is a business model that’s been around for 25 plus years

Since before the internet was even around a lot of people don’t realize how old affiliate marketing is but it’s essentially just getting paid for referrals so just to give you guys a really simple example here let’s say you’re a realtor and you have all these friends who are you know painters and they do woodwork and they do all these different things now i don’t

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Know if this is allowed in terms of referrals well let’s say for example somebody who buys a home says hey i’m looking for a painter do you know anybody let’s say you passed them that business card and then you tell that guy hey i referred you this customer and you earn a commission in the process now i have no idea about the legality of being a real estate agent

Or if you can earn kickbacks so that’s not the point of that example i just want to show you how you know versatile affiliate marketing can be and how it’s been around for decades beyond that let’s talk about the biggest thing that i think people need to understand about these businesses and that is the profit margin a lot of the times you’re gonna see people on

You know youtube or facebook advertising these stores that are doing twenty thirty forty thousand dollars a month in revenue but what they’re not telling you is what is their profit margin on those sales because typically what you’re gonna find with shopify and amazon fba is your profit margin is around thirty to forty percent so if you had a shopify store doing

Ten thousand in revenue you would expect your profit to be you know three thousand to four thousand dollars that is where affiliate marketing is completely different because if you’re doing it right affiliate marketing should be a 90 plus percent profit margin business because there’s literally no expenses associated with this business there’s no inventory there’s

No ads if you don’t want to have them and so it’s a super lean business model where you could easily see a 90 plus percent profit margin with it moving on cost to get started you know what are the operating costs to get up and running i’m sure there’s people out there telling you you can do shopify and amazon with $100 but i honestly don’t think that is quite

Right because there are going to be some costs associated with any business you start but i found some resources online that kind of helped us understand this it says to start a shopify store it’s going to cost you around $500 to $3,000 and to start up with amazon fba that’s more like 2,500 to 4,000 dollars now the big difference between these two businesses and

Affiliate marketing is that you can absolutely start affiliate marketing for free because you don’t need to buy anything it could be as simple as starting up a youtube channel where you’re gonna do product reviews or you’re going to open up a wordpress website and in order to get that up and running a self-hosted wordpress website is not going to cost you a lot

Of money at most maybe a hundred dollars for a year of web hosting and a domain so we’re not talking about a large upfront investment moving on let’s talk about order fulfillment do you have to fulfill orders with shopify yes you do do you fulfill orders with amazon fba absolutely now that’s something that a lot of people will outsource but it is still a part

Of this business there’s absolutely no order fulfillment with affiliate marketing because the person who you refer that sale to is going to fulfill that order customer service there is going to be some element of customer service involved with shopify if somebody is unhappy with the product and they want a return there’s going to be customer service involved with

An amazon fba business above and beyond their contact with amazon there is no customer service with affiliate marketing because you’re not directly dealing with the customer you are passing that lead on to that business or service or whatever you’re affiliated with and they’re going to maintain that customer relationship if they have a problem they’re gonna call

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Whoever you referred them to they’re not going to be calling you you are not a part of that process moving on inventory yes you have inventory with shopify and if you’re doing it right and dropship incorrectly you’re ordering your stuff from overseas bringing it to the us and then you’re shipping it here otherwise it’s gonna be 30 or 40 day shipping in some cases

Which people are not going to be happy with amazon fba it’s a little bit better because the amazon warehouses are fulfilling those orders for you but you do have to keep track of inventory levels and order new products and have them ship to that warehouse there is no inventory with affiliate marketing and there may be inventory but you’re not dealing with that side

Of the business you’re passing the lead and then whoever sells that product or service it was obviously no inventory with a service but whoever sells that product is going to fulfill that order so let’s say for example you are affiliated with bose headphones and you earn a commission for passing those leads let’s say you earn you know a five dollar commission by

Referring somebody over to purchase a pair of bose headphones well bose is going to be the one who talks to that customer they’re gonna be the one who fulfills that order ships the product handles customer service they’re keeping track of inventory all you did is pass over that sale and earn the commission in the process moving on do you need to run ads what you’re

Going to find is with shopify a lot of it is based on running ads interest-based ads on facebook whether it’s the wolf mug or whatever you want to talk about here you’ve seen in the ads it’s trying to find a niche product that you can sell and running ads to people on facebook amazon fba in the beginning you’re probably going to need ads to get your product up and

Running and get that sales velocity so you will have to in most cases figure out how to run you know either facebook or google ads affiliate marketing you can run ads if you want to but you can also just rely on organic search traffic if you’re not interested in running ads moving on what is the biggest pro of each of these businesses and then the biggest con well

The biggest pro of the shop five store in my opinion and this could also carry over to amazon is that it’s completely behind the scenes if you don’t want to be in front of a camera nobody knows who owns these shopify stores or amazon fba stores the biggest pro of doing amazon fba as you’re able to capitalize and piggyback off of the number one ecommerce platform

Out there and as amazon grows the sales on amazon grow and these independent sellers are making more and more money in the process and if you look at the projected growth of e-commerce over the next few years it is a good trend to be a part of and then the biggest pro with affiliate marketing in my opinion is that it can be around something you’re passionate about

I make the majority of my affiliate commissions from brokerage accounts and investing platforms and that’s something i’m super passionate about which is finance and investing so i’ve taken a passion of mine figured out how to build a business around it and i’m able to do something i enjoy and write articles and make videos about things that i really love is anybody

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Super passionate about e-commerce or shopify they may or they may not be but if you are looking to do something that’s passion oriented i think affiliate marketing is the best option for you now the biggest con of each of these three businesses number one since a lot of shopify sellers are simply running these interest-based ads on facebook it does become a bit of a

Race to zero in terms of your profit margin because let’s say for example you’re selling that wolf mug and you found a perfect niche in your running ads to these people it’s only a matter of time until another shopify seller builds a similar store selling wolf mugs to that same target audience now you’re competing against each other in terms of the same customers or

Potential audience meaning that your ad prices are going to climb up higher and your margins are going to get slimmer the biggest con with amazon fba is that there is a product lifecycle involved with anything you’re selling now that may be a two year lifecycle it could be a five year lifecycle or more but in most cases you know the product you’re selling today on

Amazon is not going to be the same one you’re selling two or three years down the road so you constantly have to be looking for new products or have somebody on your team doing that for you and then by far the biggest of affiliate marketing is it takes a very long time i can tell you that most people if they’re doing the blogging approach building up a blog they’re

Not going to make any money for the first in some cases 12 to 18 months because that’s how long it takes to build up authority and get substantial traffic to your blog i know people who have done amazon and shopify that have gone to you know 0 to $10,000 in the course of six months so it is quicker in most cases to get up and running with shopify or amazon fba but

It all has to make sense for you and it has to ultimately be a business that you’re interested in running the issue is if you build a business that you don’t like you’re essentially just gonna build a job for yourself and eventually you’re gonna want to get out from under that and so i always encourage people to build something that they actually like from the

Beginning it’s going to be a much easier process anyways guys that’s gonna wrap up this video i hope you enjoyed it let me know in the comment section down below which of these three business models are most appealing to you and if you are interested in learning about my business model which is affiliate marketing it’s primarily based around building an audience

And monetizing with affiliate marketing and so i have a free five step blueprint i’m gonna link up in the top link in the description below which goes through the five steps you follow to build a following or build your tribe online and then eventually that is when you can use affiliate marketing to make money from that audience so that ebook is the top link in

The description below completely free i’ll be sending that to you over facebook messenger but thank you guys so much for watching this video i hope you enjoyed it and i will see you in the next one

Transcribed from video
Amazon FBA vs Shopify vs Affiliate Marketing By Ryan Scribner

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