If you are researching different ways of making money online, I am sure you have come across affiliate marketing and Amazon FBA. These two are among the most popular ways of making money online.
But which one should you choose? Well, in this post, we will be analyzing both ways, and also share our opinion on which one is better for starters.
Affiliate Marketing
Affiliate marketing has existed for many years. Although in the past it was not done online, people have, for many years, earned commissions by promoting the sale of products owned by others.
In today’s online world, affiliate marketing has proven to be one of the legitimate ways of making money online. It involves promoting 3rd party products or services to a targeted audience, usually via websites, like money saving store, on this site customers can do online shopping for less money.
In other words, you direct a visitor to a vendor’s site by offering more information about the products on vendor’s sites, and if they buy something, you receive a commission for the sales made. Some of the most popular 3rd party affiliate programs include Amazon and ClickBank.
Amazon FBA
Fulfillment by Amazon, popularly known as Amazon FBA, is quite the opposite of affiliate marketing.
It involves selling your own products on Amazon. This model requires you to have an inventory that you display on Amazon stores- Amazon takes care of the storage, distribution, and shipping as well as customer service needs relating to distribution. Of course, this is done for a percentage of the profits.
This means that to get started with Amazon FBA, you need to have substantial product inventory. The good thing about this method is that you get to benefit from the impressive shipping network established by Amazon.
We can, therefore, say that Amazon FBA is a hands-off way of selling products online. You have to conduct product research to see which products are likely to sell then send the product to Amazon with hopes that it will sell.
Comparison – Affiliate Marketing and Amazon FBA
Here are the three parameters for comparison.
Upfront capital
In affiliate marketing just a few tens of dollars are required. On the other hand in Amazon FBA At least $2K for a serious startup..
Learning Curve
The affiliate marketing is less complex, but you need to learn how to manage a website and some bits of digital marketing. But in the Amazon FBA, you need to learn more about product selection, analyzing niches, dealing with manufacturers, and a lot more that entails sourcing of products you want to sell
Time
If you put enough seriousness into affiliate marketing, you can start making good money in one year. But Amazon FBA, can be fairly quick if you choose the right product, but majorly you will have to reinvest the profit back to buying more stock.
Profit
In affiliate marketing, as long as you work hard to make great content upfront and optimize your site for search engines, once this is achieved, your site will need very little work after that. This means you can generate passive income via affiliate marketing.
On the other hand FBA calls for major involvement in terms of restocking. However, you can enlist people to manage the model for you, but this will eat into your profits.
Which Is Best (for newbie)
While no business model can be termed as perfect, it is important to consider what you are willing to invest (time and money) as well as the level of risk you are willing to take.
For starters looking to create an online business without investing a lot of money, affiliate marketing is the way to go. This is because you can realize the benefits without spending a lot of money on doing product research and branding a product.
What’s more, as an affiliate, you can promote a product someone else took a lot of time to create and test and get good returns. In addition, you will not have to deal with sourcing inventory and customer service.
For people with a large inventory, which is rarely uncommon for starters, then Amazon FBA can be an attractive venture. Overall, we can say that Amazon FBA is a high risk, high rewards venture while affiliate marketing is ideal for those who do not want to invest a lot of money. Keep in mind that you can generate high returns doing affiliate marketing with Amazon if you do it right.
