Learning is key for investors. Being a silent investor is good but usually, it works well when you invest in banking institutions. however, active businesses like Amazon’s, it becomes a reason for failure. Usually, investors face miscommunication or failed partnerships due to a lack of knowledge. By learning the skills, it doesn’t mean the investor has to learn every technical bit and piece.
So how and where should an investor start in the Amazon business?
Consider having at least $10k in the investment available. Yes, even for wholesale FBA business, this kind of amount is realistic to start with.
How much you’ll make by investing $10k?
Well, that depends on the products you or your partner is working with. Many products move with a 20%+ profit margin. However, sometimes we go as low as 10% too. The investment of $10k is not going straight in the inventory buys. You are going to use the money in your education, working partner’s monthly salary, a couple of software subscriptions, etc.
So assuming you have invested about $7k USD in the inventory and you sell it within one month, how much you would be in profit with 20%?
About $1400 USD. Out of which you may have to pay the working partner either in salary or profit share.
So how Wholesale FBA is safer than any other Amazon business model?
Well, you are investing in multiple products that are already popular and selling well on Amazon. You are not reinventing the wheel. You know the products you will be selling have stability and are well known by the customers. The products already have high star customer ratings. But still, you’ll be investing in small chunks of money in different products, test their market and sales and then go bigger on them.
The Reverse Sourcing in Wholesale FBA is aligned in a way, if you or your working partner follows it properly, your goal would be to work with a product giving you at least a $300/mo profit margin. Having 8 to 10 products in such a strategy will put you at $3k/mo profit. Of course, you will need more investment. However, it is easy and achievable. It just takes proper effort and time.
What about Amazon PL?
PL (Private Label) is one of the businesses, in which you build your own brand, you invest a lot of time and money in a single product to start with and later add more to your portfolio. This business returns its fruits after a longer period of time (not instant). The reward in this business is to have your own IP (Intellectual Property) because you own a brand.
PL is a high-risk business in terms of financially and timely as well. You hunt for a product, go through a long time of finding, researching, talking to Chinese suppliers, handling inspection, logistics, etc. And once the listing goes live, you or your skilled partner will work on launching, ranking, and maintaining the listing. The reason I feel it a high-risk business because you have to have continuous efforts of maintaining the stability of the product listing on Amazon. Any customer leaves a negative rating on your product anytime, you have to bring several positive ratings to maintain the sales velocity.
God forbids, if your first PL product did not do well, you would end up losing your heavy investment which can be anywhere between $7k to $30k USD. On top of all, you’ll be behind 1 year from a satisfactory income stream business.
You love Amazon PL but when should you start it then?
I always recommend starting after generating enough income from Amazon itself first. Private Label is a high-risk business. A single mistake can set you back 1 year or make you lose a huge sum of investment. You should always start with Wholesale FBA, you can start with even lower investment compared to what I mentioned above which will at least give you a chance of learning and experiencing how the business is making money.
Wholesale FBA will set you to be making more than enough money in monthly profits. I recommend keep reinvesting the profits as well so your cash flow grows. If you or your working partner spends 1 year religiously in Wholesale FBA and keep adding its profits, you’ll be better off with start Private Label business on a side with the profits you have made in Wholesale FBA already. And by this time, you will have a lot more knowledge and experience in diving into a higher risky business because you have already dealt with several products, you have already seen the Amazon market. You already know what customers want.
Okay, I’m ready to invest. How to begin?
Now, an investor you have two options to start.
1- Enroll in 101 training and learn for yourself. ESP doesn’t guarantee to offer a director but connects you with a director when available from its 101 or Success Camp training students. However, it becomes much easier for you to find VAs and working partners having an ESP 101 investor tag. Once you have a working partner, ESP can help you get started in Wholesale FBA since you already have the training material in place. ESP involved with its set profit shares. So all the products are evaluated by the ESP team before they go live on your Amazon store.
2- The other option is to simply hunt for a working partner in the ESP group. This becomes a bit risky as you are doing it directly without ESP’s involvement. But you must have VSC access to have the firm knowledge of the business model. ESP doesn’t evaluate or approve products for you in this case and you are depending more on your skilled partner’s experience.
ESP doesn’t offer human resources or skilled partners or its services. ESP group does. You just have to find one. There are many Pro Training & PPH students available who will be happy to work with you for a salary or profit share. Post yourself, hunt for skilled ESP students in the group and you may find some reliable resources. However, be ready to waste some time as you may face some unexpected results in this situation and give more trials.