The real answer to Why Amazon FBA, is why not?! Basically what you are looking at is a highly lucrative business with little to now real investment compared to others. Amazon FBA demolishes so many other start up businesses because it is just really very easy comparatively speaking. I am also, very much involved in other businesses. Real estate is another business I invest heavily into. But, if we decided to break down the cost of each of these businesses you will soon see the minimal investment needed to get into this.
Ok so, lets do just a little bit of math here for Amazon FBA. Lets just say you start your store for 50$ a month on Shopify. Then you decide to pay 40$ a month for the pro membership and sell on Amazon. Account for another $100 for advertising and then $5-10,000 for your product / pictures / shipping.
Aside from some other small monthly fees that is basically your investment. With $10,000 you can create a very lucrative business. Now, lets compare this to storage facilities or any commercial real estate. For a profitable operating storage facility you can pay upwards of $5 million. The same goes for commercial real estate properties. If you decide to jump into the risky business of house flipping you are looking at $100-150,000 overnight.
The problem with those businesses are you need a ton of upfront cash and you need to live near the property. They are great as well but, as you can see ecommerce investing is HUGE and can pay out big time. Amazon FBA helps with all of this. They are basically your sales route to all your new potential clients and it is phenomenal. They provide a platform that is unmatched globally. The only thing that compares are Jet, Alibaba and Aliexpress. However, they are all very, very different platforms.
The thing is Amazon FBA is really not going anywhere. We make up more that 60% of the selling that occurs on the billion dollar marketplace. The longer we are allowed to sell on their platform the more potential exists to bring clients to our own platforms. Shopify is wonderful because it allows us to sell on a very streamlined and efficient ecommerce marketplace.
Amazon FBA has really never been easier. It ships your product, handles the transactions, handles returns, customer service and a provides a platform where you are allowed to advertise and reach out to prospective clients. Honestly it is one of the best things about the digital age that we live in today.
Americans and the rest of the first world countries out there love useless crap that is sent to their doorstep in two days. Now, with groceries, pet food etc. being more easily accessible from their platform many more people are finding Amazon FBA a convenient market.
If you are looking for a business to grow with over the next 10-20 years this really should be in your portfolio. Keep it in mind and as always keep hustling.
Talk to you later!