Why Choose Amazon FBA?
Lesson 11 Chapter 1 Module 2
In Lesson 4 I told you that "Amazon gives you all the ingredients you need to start a thriving online business on a silver platter".
Let's see what they are...
Whether you open a physical shop in your local community or start a new eCommerce business online, one thing remains true: if there's no customers, there's no sales and your business dies before it had a chance to start.
In internet language, we talk about people who visit a website as traffic.
Traffic is like the flour in a bread recipe. Flour (normal or gluten-free alternatives) is pretty important to bake a bread, wouldn't you say?
Let's imagine each visit to Amazon represents a 2kg bag of flour. How many bread loaves could you bake with 2 billion bags of flour?
THAT's the power of Amazon... The entire Amazon Marketplace (that's all 16 mentioned in this lesson) generates over 2 BILLION visits per month.
But let's be realistic... We won't be selling to the whole world. We will be focusing on the Amazon UK (and greater Europe) Marketplace(s).
The entire Amazon Europe Marketplace generates about 200 million visits a month.
Let's use the bread example again: how many bread loaves could you bake with 200 million bags of flour? But let's be even more realistic... You only get to bake 0.001% bread from the 200 million bags of flour in one year.
That's 200,000 bread loaves over the course of a year. Now, I want you to imagine that each of those bread loaves represents just £1.00 (one British Pound) in pure profit.
Here's the bottom line: even if you could make just £1.00 profit from 0.001% of the entire Amazon Europe Marketplace, you would still generate a whopping £200,000 profit per year.
That's R3,727,630 profit per year at the current exchange rate.
But you won't be making just £1.00 profit per item. The industry standard is at least £4.00 profit per item. I hope you're getting just a little bit excited right now.
Traffic is the lifeline of your business and Amazon can give you all the traffic you'll ever need.
Customer satisfaction is like the salt in your bread: the right amount of salt makes bread taste so, so good. But too much salt ruins it.
Happy customers = perfect amount of salt to bake the most delicious bread.
Unhappy customers = too much salt.
But when learning to bake bread, adding the right balance of ingredients can be tricky. As anyone knows who has followed baking recipes perfectly, the end result is not guaranteed. You have to experiment until you can bake the perfect bread.
The same is true in business. You will experiment until your business runs smoothly and it is successful. But there's a major problem: your customers will not be patient and excuse you for "still learning the ropes".
So how do you make money while you learn?
They pride themselves on one thing: the customer is always right.
They do it to such an extent that it sometimes infuriates the best of sellers. Not all sellers agree with them, but Amazon's policy works. They are the number one trusted online brand on earth.
If you're just starting out and no one has ever heard of your brand, Amazon shoppers will automatically trust you with their money just because you sell on their platform.
While you are "learning the ropes" Amazon will take care of your customers. They'll contact them and ask if they're happy, they'll handle any questions and concerns your customer may have and they'll even handle any returns for you.
Using Amazon is the fastest possible way to introduce your brand and build a loyal customer base from day one. If you give them a high-quality product, they will buy from you again and again (and again).
Here's a simple recipe for success:
Introduce a high-quality product on Amazon = Happy customers + good reviews = more happy customers. Repeat.
There's one more thing a bread needs to be perfect: leaven.
Leaven is the stuff that makes a bread loaf rise. Different types of leaven will affect the end result. Want an 'OK' bread? Use baking soda or commercial yeast. Want the best bread anyone has ever tasted in their lives? Use sourdough.
In the same way, how you fulfil orders will affect your customers' ultimate experience. It influences whether they will buy from you again in the future or not, and whether they will recommend your brand and product(s) or not.
By using the FBA service, you don't have to worry about:
Just like using sourdough as leaven ensures the perfect bread, Amazon FBA ensures a satisfying experience for your customer(s).
The above "ingredients" can make or break your business.
Now, you could try and do it on your own. And you might even be successful. Many people have done it. Many people will continue to do it.
Doing it on your own takes time though - it can take at least three to five years before your business starts to show promising results. Apart from time, it will cost you considerably more money than starting with Amazon.
Do you have that kind of time or money?
Before we start with the new Chapter (we'll discuss different Amazon FBA business models), I'd like to know how you feel about Amazon now compared to when you started with this course. You can either leave a comment below, or you can send me an email at email@example.com. I look forward to hearing from you. I'll answer each of you personally.