I was tempted to call this article “the game has changed for Amazon FBA Sellers”.
But the simple truth is that the game has always been the same!
First, let me help demystify a couple of facts for you.
Amazon FBA is simply a group of warehouses tied together by sophisticated software (which is a digital product incidentally).
Third-party sellers pay a monthly membership fee (digital product) for the privilege to access these warehouses (where very real people work incredibly hard).
BTW– now millions of people pay this monthly membership fee even if they don’t sell a single item in Amazon’s catalog.
There are so many third-party sellers that Amazon doesn’t release the numbers! But to give you a perspective there are more third-party products than Amazon products.
When your products appear in the Amazon “catalog” they are simply sitting on shelves inside of the warehouses across the planet.
Now, if you are considering selling physical products online, e-commerce, this is not necessarily a bad thing.
In the beginning, it was fantastic!
The competition was practically non-existent and regular people were making very good money, without even trying hard.
But the plain truth, if you want to hear it, is that the game has changed.
Now the ‘race to the bottom’ has killed the profit for the regular person (that probably means you) entering Amazon’s catalog.
Here are just some of your hurdles:
- The cost for the physical items that you are buying from China (Aliexpress or Alibaba) is skyrocketing!
- COVID-19 has made shipping times and logistics very difficult.
- More categories are gated (or blocked) in the Amazon catalog than ever before.
BTW “ungating” categories for third-party sellers is a huge business now (and it is also a digital one).
- The Asian manufacturers (folks making your product) are now selling the same product in Amazon’s catalog for less than they charged you to buy it before mark up!
Despite all of these setbacks (as of this writing), a group of marketers is selling their TWELFTH version of their “Amazon FBA Training” course.
Why?
Because their course is a digital product and they make much more money on you buying the course than they ever did selling physical items on Amazon FBA!
This particular group also hosts a big seminar with all of their excited customers paying to attend.
(Is buying a seminar ticket a digital product? I think so.)
The reason that the Single Operated Newsletter category is growing so quickly is that it gives you control.
And because digital products are where the real money is online (and has always been).
Several years ago before the bottom fell out I taught Amazon FBA workshops.
Without any backend or upsell just real strategies and methods for selling private label products on Amazon FBA.
I taught them for about a year, via Zoom, to a couple of non-profit organizations.
This was when the “average” person could still actually make money with the private label product approach.
But even then you still needed to advertise (digital product) the private labeled item in Amazon’s catalog.
“Okay, M.T. the tell me who is making the money on Amazon FBA now?”
Good question. The answer is easy:
- J.B. and Amazon of course (smile).
- Product manufacturers (yes, the folks who make the widgets).
- People teaching you “how” to make money on Amazon FBA.
There you have it.
The new Amazon FBA reality.
Just remember, any kind of coaching, training, or membership is a digital product.
I still find that folks tend to overlook the digital aspect of memberships. Even offline memberships are in essence a digital product.
A perfect example is a gym membership.
You pay that fee each month even if you never step foot in a gym.
Of course, thanks to the pandemic, not many people are stepping into gyms. But Peloton is very happy about that (and so is their stock (again a digital product)!
But I digress.
Digital is the future of e-commerce online. And it doesn’t matter what sleight of hand the presenter is using;
- free physical book upfront;
- ‘discovery’ phone call;
- webinar;
It will always come back to digital products and income.
But, as I said earlier, it was always the real way money is made online.
Think about it.
Nothing is more direct, uncomplicated, and lucrative than digital products:
- They are delivered instantly (no warehouse hassles, etc.)
- The customers get to enjoy or learn immediately.
- And you get paid instantly (and directly) in the process.
The internet was made for digital commerce and in our case Single Operated Newsletters!
Sure you can try to offer Amazon training. But I believe that ship has sailed for most people just getting started online.
And yes the folks I mentioned earlier will make a killing on Amazon FBA.
But if you are not making the online money you want yet and your resources are low I would not recommend it.
To diversify cashflow, or tap into the massive digital income streams without as much competition in lucrative niches take a closer look at PaidLetter.com
This wonderful country that we live in has provided too many resources for anyone of average intelligence to struggle for a living. And the amazing financial resources of the World Wide Web are only a click away. I hope that you choose to take control of this powerful magic and design the life that you want.
Stay Healthy and Enjoy Your Life!
M.T. Smith
Founder & Creative Director
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