Affiliate Marketing vs Amazon FBA
The title says it all, a battle of two business models that are ridiculously popular amongst the online marketers or workers. Affiliate marketing vs Amazon FBA, which of the businesses is better?
Both affiliate marketing and FBA are lucrative businesses online but they all come with benefits and flaws. Want to know more?
Keep on reading here…..
What is affiliate marketing
Affiliate marketing is a digital marketing channel where one promotes other people’s products and earns a commission when a customer clicks on their affiliate links and makes a purchase.
Affiliate marketing has been around for as long as I can remember and it probably one of the easiest ways to start off working online.
It really takes time to get going but once you have established your website to be authoritative, you start earning money passively.
P.S. For one begin their affiliate marketing business, you will really need to purchase a course otherwise it will take you forever to learn and do it rightfully.
Besides when it is done inappropriately, you are more likely not to make any sales hence follow footsteps of the already successful marketers.
Additionally, there a lot of junk courses out there on the internet with literally no value for your money. It’s up to you to make the research about courses to spend your money on. Lucky for you, I got you covered with one of the best courses in the game here.
What is Amazon FBA?
Amazon FBA is a service provided by Amazon that provides storage, packaging, and shipping assistance to sellers.
For those who may not know: FBA starts for Fulfilment By Amazon.
It takes the off the burden of sellers and gives them more flexibility in their selling practices. The program allows sellers to ship their merchandise to an Amazon fulfillment centre, where items are stored in warehouses until they are sold. When an order is placed, Amazon employees physically prepare, package, and ship the product.
It should also be noted that this business model requires an inventory and some cash or income to kick it off.
Interested in learning Amazon FBA, click here.
What is the difference between Affiliate Marketing and Amazon FBA?
This part is probably one of the reasons you crawled the internet or landed on this page. Much as both affiliate marketing and amazon FBA being major money-making methods online, they differ in a way or two; the key differences include the following;
- Affiliate marketing involves you selling and promoting other people’s products and requires no inventory thus less capital needed for investing in. Amazon FBA on the other hand requires large inventory hence more capital required for start.
- Affiliate marketing takes long time to establish especially with a new website to become authoritative and rank high in google or search engines. But once that is done, you start earning passively therefore it’s a passive business. With Amazon FBA, it takes less time to get it going but is an active business and requires hard work. This is because it requires high levels of product research and all related issues like shipping your inventory.
How does Affiliate Marketing work?
In my opinion, affiliate marketing has the most basic work cycle online. These simple steps take little or literally no time to fulfil with the exception of maybe promotion.
First and foremost, you pick or decide on a niche to majorly focus on; such as the fitness or health niche, sports niche, make money online niche, software niche, the list goes on…. This is really important because there are people who get easily bored by repeatedly doing certain things, hence you go for what are passionate about.
Secondly, join an affiliate network, this is a marketplace where affiliate products are availed to customers. They also handle the transaction or payment of your affiliate commissions hence prevent fraud cases you could incur. There are several affiliate networks like Clickbank, Digistore24, CJ, Amazon etc.
Thirdly, you pick an affiliate product to promote and make a commission from. There are different types of products to choose from i.e. high-ticket products and low-ticket products. You will be given an affiliate link that you will use to promote online. Which leads us to the next point….
Promotion. After picking a product, the next thing to do is bring it closer to the potential customers or consumers. This is done through referring to friends via Facebook, or emails. But the most effective ways are by blogging and paid advertising. You decide what method suites your preference.
And lastly, when a customer clicks on your affiliate link and ends up buying a product you earn a commission.
Isn’t that surreal and super easy huh?
How does Amazon FBA work?
As much as I mentioned earlier that it’s an active business model, most of the work is handled by Amazon through its employees. FBA works in the following cycle.
Send Your Products to Amazon.
After purchasing and shipping your inventory or products from whatever part of the world, you have ship them to any of the Amazon warehouses in your location. In most cases they direct you to the most preferable warehouse depending on the types or kind of your inventory.
Amazon Stores the products.
Once your products have reached the warehouses of amazon they are stored safely and in case of any damage, Amazon compensates you.
Buying and shipping of the products
When a customer buys any of your inventory, the transaction is handled by Amazon. Similarly, the packaging and shipping of products to the customer is handled by Amazon through its workers or robots. After a purchase of a product, amazon automatically updates your store.
The needs of your customers are handled by Amazon i.e. if the customer is not satisfied with your product, returns or if they have received the products.
Amazon has a policy of paying a every two weeks, hence it calculates or sums of your total sales through this period and deducts the seller fees. The rest or profit is deposited in your bank account.
Advantages and disadvantages of affiliate marketing?
Advantages of affiliate marketing
- Affiliate marketing is super easy to set up and establish because there is no much technical skill set is required to start.
- It requires little or no money to start it, most cases the only investment is buying of the courses to study and learn the process of doing it.
- There is no customer service required because it’s rendered by the affiliate programs. All the products with affiliate programs provide the customer support and service themselves.
- It is a passive income stream. However, at the start you need to put in some work just like any other business, but when all is set, you start receiving money passively, even when asleep. Lol
- It’s a very scalable business model, especially through paid advertising.
- There is freedom or flexibility to change and try out any other affiliate products which may relatively work for you.
- No inventory or your won products are needed to start this business.
Disadvantages of affiliate marketing
- This is a major blow of market saturation that is to say, there are niches that really saturated and competitive which makes it pretty hard for a beginner to make mark here.
- There cases of commission hijacking as a result of malware and hackers hijacking your affiliate links. This is a big problem in the industry but it’s on very rare cases.
- You do not have total control over the products because your role is to only promote and make sales. Hence there is dictation over pricing and commissions you received.
Advantages and disadvantages of Amazon FBA?
Advantages of FBA
- Just like affiliate marketing, Amazon FBA is easy to start and set up.
- You’re relived of your customer service burdens, why? Because Amazon takes care of everything to do with support.
- The shipping and tracking of a customer’s product is handled by amazon.
Disadvantages of FBA
- It requires inventory to start it thus a lot of costs involved through purchase of the products.
- There are a lot of costs to incur along the journey such as amazon monthly fee, shipping fees, and third-party tools.
- Unlike affiliate marketing, with amazon FBA you entitled to promotion and marketing of your products. Amazon handles the rest with exemption of promotion.
- It requires a lot of work and being active to make more sales with FBA.
- FBA is a little to risky, why? Because when the products are not bought from the store, you incur the loss of buying and promoting the product solely. With affiliate marketing the loss is of not making sales only impacts you on the marketing side.
Affiliate Marketing vs Amazon FBA: Which one is best for you?
This sis a question to self. Having had an overview of both business models, it’s up to individual to make an informed decision basing on their personal situation now in life.
However, for the buds with money at hand, you can start with FBA while those with very tight budget can patiently build their affiliate marketing businesses gradually.
Additionally, if you need a passive source of income then affiliate marketing is for you but it only becomes passive after a certain period of time, from about six to nine months. Meanwhile the active personnel get on board with the ever-demanding Amazon FBA.
If you have reached this far, I believe you capable of making an informed decision upon which business model to take on.
And Oh! And don’t forget to leave queries and suggestions from the comment section below.