EFP 147: Business Model Showdown: Amazon Affiliate Vs. Amazon FBA

Justin Cooke

October 29, 2015

Welcome to our business model showdown!

The Amazon FBA program has been the business model darling of 2015. Between the courses sold, the affiliate programs launched, and the hype on the forums – does the FBA model really deliver? How does it stack up compared to more traditional Amazon affiliate sites?

Amazon FBA Versus Amazon Affiliate Sites – A Showdown of Titans

In this episode we’re going to dig into the pro’s and con’s of Amazon FBA and  Amazon affiliate sites. We’ll make the case for both and let you decide!

Digging the show? Pop on over to iTunes and leave us a review! We’d really appreciate it and we’ll give you a shout on an upcoming show!

Check Out This Week’s Episode:

Direct Download – Right Click, Save As

Topics Discussed This Week:

Part 1: The Case For Amazon FBA

Part 2: The Case For Amazon Affiliate Sites

Part 3: The Hybrid Model

Mentions:

Spread the Love:

“In the branded Amazon FBA model, you can have exclusivity on products and brands.” – Joe – Tweet This!

“With Amazon, you get easy access to payment methods from all their customers.” – Justin – Tweet This!

Are you sold on the FBA model? Affiliate model? Tried both and have some thoughts on the subject? Let us know in the comments!


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Discussion
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  1. Hey Guys –

    I love the Hybrid model because like you said if you have an Amazon affiliate site and start marketing your own private label FBA products you can really increase your margins.

    Justin- when you get a Joe on board for the hybrid model of your sites, I will give you a good rate at fbaprep.com so you aren’t shipping products to the Philippines!

  2. Charles says:

    Hey guys… Hope this finds you well! first time commenter .. Long time listener.

    Ok so I really enjoyed this episode cause this is something that’s been on my mind a lot lately – the oversaturation in what seems to be a time where everyone is now an entrepreneur. You hit on all points I’ve been wondering about with FBA

    HOWEVER,
    I’ve also been wondering what your thoughts are on everyone getting on shopify and starting e-commerce stores with a dropshipping model, which is definitely the reality now with all the dropshipping courses out there these days and all the info in general.

    Where do you see all this going? I wonder what 2 years from now will look like in e-commerce and what’ll be needed then in order to set yourself apart. It almost seems like FBA and the common e-commerce niches are totally tapped and it might not be worth your time now? I don’t know, maybe there’s still some obscure niches out there that could work…not sure

    Have you given this much thought at all? Love to get your thoughts!

    [email protected]
    Charles

    • Justin Cooke says:

      Hey Charles – thanks for reaching out, man!

      I thought we provided an interesting (and needed) counter-point to some of the FBA cheerleading that’s been going on the industry. It’s NOT a unicorn business, but it CAN be effective and still works for some friends/peers.

      That being said, I’m hesitant to head down the “FBA is dead” path. Aside from the fact that I simply don’t think that’s true, it’s also because so many were saying “AdSense is dead” when we started, people are saying “Affiliate sites are dead”, etc. No they’re not…it’s just whoever’s saying that isn’t having success with them right now.

      When it comes to eCommerce (and dropshipping specifically) I think those guys are feeling much more heat from Amazon than they are from each other. The dropshipping guys have been worried about Amazon for a few years and I hear Amazon’s made their model increasingly more difficult or niched down.

      One of the best ways I’ve heard to combat Amazon with dropshipping is to enter niches that require education and domain knowledge. You can still provide a better customer experience if you’re willing to:

      A) Talk on the phone with customers and walk them through their needs/wants.
      B) Know more about the niche/industry and what products go with what

      Yes, eCommerce (and dropshipping specifically) still works. I know others that are very successful in the space and are still creating new sites, entering new niches, etc.

  3. I was really excited when I first heard about Amazon’s FBA from Richdad.com. But I found out the training program offered by Amazing.com was like $5k. My wife won’t let me spend that kind of money on an online training program.

    I tried to negotiate with Amazing.com to teach me, and I’d pay them double after I made money from their training program. They were kind enough to respond promptly. But the answer was – no, sorry!

    So…I spent the next few days and nights learning about FBA. I have freelancer design a product logo for me, I negotiated with a supplier on Alibaba for my product. They put my logo on the product, and on the packaging. They sent me 2 samples (I wanted 5). It was beautiful! I created my first product that I can TOUCH.

    Then..I tried to list the product on Amazon. They need it a UPC. I know what UPC was…but I didn’t know how I could create one. I thought manufacturing company does that. I asked my supplier…he didn’t know. He asked me to give him the UPC and he’ll put it on the package for me. Now I start to feel overwhelmed.

    Next thing…oh was vacation time….house boating in Utah.

    Came back from vacation got an auto charge from Amazon for $39, next month, another $39, then another $39. So I went to change the setting on Amazon. So now it won’t charge me anymore.

    Long story short..my chosen product was a car mobile charger. Mine was beautiful, very slick! But in the end….I determined was too competitive..and the price keep dropping. But to tell you the truth, if I didn’t get stuck with getting the UPC I would have order the product and listed on Amazon.

    All and all…was a great experience. I learn some. I had failed, but I am not defeated. On to next project. Maybe I’ll do another product. A little bit late for Christmas. Darn!

    • Justin Cooke says:

      I hear you regarding the Amazing course – it’s awfully expensive, right? They’ve done a helluva job marketing it, though, for sure.

      It’s too bad you didn’t get Amazon FBA to stick. I DO know people that are doing quite well in the space. Do you think if you would have stuck with it you would have found success?

      Best of luck on your next project!

  4. Anisul says:

    Thanks guys for shedding light on pros and cons of FBA and affiliate model. I agree that hybrid model can be lucrative, but with tools like Jungle scout, we can already predict which products are selling hot and also there are ways to discover low hanging fruits.

    Plus, ranking Amazon affiliate sites and testing the products is way more time consuming these days. Would you like to wait 6+ months to rank your site and then determine which product you want to sell? I understand it’s not just about selecting the item but about controlling the niche.

    But practically, one product launch requires huge amount of time and energy apart from money. So, even though you have a potential list of items to sell as FBA, you can’t scale it up that fast.

    That’s my two cents :)

    • Justin Cooke says:

      Hey Anisul,

      Glad you dug the show, man! Yeah, can definitely predict popular products, but if you have the Amazon site you can actually see (for sure) the products being purchase…in AND around your niche.

      Yeah – looks like you’re either stuck waiting for your affiliate site or you’re plunking down some cash to get started with the FBA model, heh.

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