Can’t Fail FBA Business Plan for Amazon Affiliate Website Owners
One of the “hottest” topics over the last year has been Amazon FBA. Until I saw a competitive edge/unique angle I was not going to participate.
Today’s post is about the unique angle I am planning to take and how it can be replicated to unleash some pretty wild numbers! The best part is if you are reading this website than you likely possess the skills to execute this strategy.
What is Private Label FBA (Fullfillment by Amazon) – Very briefly private label FBA is purchasing products from Alibaba(or similar) putting your logo on them, shipping them to Amazon, and listing them for sale on Amazon at a healthy markup. There is a lot more to it than that but that’s the basic idea. The best source of information I have found (and by coincidence a former customer of mine) is Scott Voelker TheAmazingSeller.com and a very cool tool for calculating freight costs is at Freightos. I will refer to his great 100+ podcasts and content throughout this post.
Basic FBA Idea:
So what is my unique angle? My strategy is to build/buy Amazon affiliate sites which are selling products that could be easily Private Labelled and become the seller of these products then rinse and repeat consistently.
There are 3 challenges people most commonly face when starting an FBA business…
- Identifying a product your can be confident will sell
- Generating sales for a newly listed product until Amazon organic sales take over
- Capital to invest in the inventory
This strategy solves number 1 and 2 (but makes number 3 (Capital) worse.
The key benefits of this strategy also alleviate 2 of the biggest stumbling blocks with getting started with FBA…
- Confirm a product is selling before investing in inventory and take all the “guess work” out of picking a winding product!
- Drive sales off the start without having to run any promotions simply by recommending your product from your Amazon Affiliate sites!
The key benefit for me is that I can use my existing skill set of building and growing Authority/Niche sites, creating processes and capital in my business.
- Build/Buy Amazon Affiliate Site Selling a Product that could be sourced as a Private Label product. Building/buying an affiliate site for a vacuum cleaner would not work. EmpireFlippers.com are a great source for buying sites.
- Reviewing the sales data the site is driving identify a product that could be private labelled.
- Do everything recommended by Scott at TheAmazingSeller.com
My Amazon Affiliate Site + FBA Status
I have been working towards this strategy and last Friday decided to pull the trigger on executing it.
Here is what has been accomplished over the last week by my team…
- Over the last year – Grew a website to sell 600 units of a product (not my six figure challenge site) making $1.5k income/month
Over the Last Week:
- Purchased a website with similar traffic but worse conversions ($12k) at EmpireFlippers.com
- Sourced product and got small sales/test lot sent (definitely didn’t do this properly) ($2k)
- Set up retargeting cookies on my website(s) and email opt in to launch the product
- Got approved into Amazon and am currently setting up listings
My aggressive goal for this project is to hit 50 units/day at $10 profit margin/unit within 3 months of pulling the trigger on this strategy. I need to move fast to catch the holiday bump and new years fitness bump. Luckily my wife is fully on board with this and will be helping execute.
Why The Numbers Get Crazy!
Again the downside to this strategy is the upfront investment and the even more complex skillset you need to bring to the table. It would be best to have 1 or both skillsets before starting this model(either Amazon Affiliate or FBA).
One of the downsides to my current online businesses is that I am not able to simply reinvest money at the same rate of return as I made it with. There are ways to reinvest and I do but it is not as simple as selecting to reinvest dividends on say a stock. This model has the potential to solve that problem.
Say you have $100k to invest and spend 50% of it on the purchase or growth of an affiliate website this is what the numbers could look like…
I am sure many of these numbers will be wrong but it certainly shows that there is substantial potential.
Now I am getting carried away (but humour me) if this model was able to be repeated and both buyers of FBA business and Sellers of Affiliate Sites were readily available the rinse and repeat model would look like this…
Other Amazon FBA Related Articles:
Vipon vs Snagshout – which is best?
Samurai.Social – Get free products on Amazon
Great plan Jon! I’m having the same goal with my authority site. Ranking for buying keywords first and selling my own products on Amazon. Not sure how this will work out but i’ll keep you posted 😀
Great Tung, with your experience creating sites that sell well on Amazon I am sure you will be in a good position to execute that model. How many units are you wanting to be able to drive by your website before you pull the trigger and setup the private label product?
I am listening to Scott Voelker for a while now and it is an awesome podcast to start with FBA, which is hot right now. But be careful there might be an consolidation coming. If you like the Amazing Seller podcast you will most likely also love the Freedom Fastlane podcast by Ryan Daniel Moran who makes multiple six figures with FBA per month. Most of the episodes are about FBA. He also talks more about the big picture with the business and what to do when a consolidation comes. You might wanna check it out. I am not affiliated with it in any way, i just love it.
To answer yout question (what might be wrong with your idea?):
Wenn you cant expect to always sell and buy new sites and amazon businisses when you want. It might take months each time to sell and then again to find a new site to buy. But i think you know this. The numbers look nice though and as long as it works for you why not?
Good luck with your business! Ill keep reading.
Thanks, haven’t dug into Ryan’s podcast yet but it has been recommended to me. Not clear on the risk with consolidation yet but feels like inaction would be like waiting around for a Google Update to build a website…not being dismissive just not planning on slowing down for a maybe. It would be prudent for me to learn a few things about this risk though as soon as possible.
I think you are right…the rinse/repeat to $millions assumes there will always be a buyer and seller that is a good fit…that is unlikely to be the case.
Thanks for your comment!
Yes slowing down is certeinly the wrong approach. Instead reinvesting as much and as fast as possible to build a REAL brand with multiple products in the same niche before the consolidation hits, so you are positioned in a nice spot before it gets too hard. And you have a real Business then, which you might sell for a good multiple if you want to.
Thanks for some clarification…this is definitely what I am planning on doing, once I do my research into this I may just shorten my timeline for getting it done.
the big factor is if your private label product will convert like the one that the affiliate site sent traffic to but its a good strategy
Good point Brian… time will tell!
The plan is good in general terms but I think 50% is overestimating the % of sales you’ll get by driving traffic to your own private label product.
I always thought my niche sites main job was getting people onto amazon and after that their amazon experience had the most influence on what they bought.
You’ll certainly do better than another amazon sellers that don’t have $50000 niche sites helping them and it would give you a competitive edge.
But I think the big question is would you be better off investing the whole $100,000 into a range of amazon FBA products?
Yah that is one of the numbers I am really unsure about 50% does seem aggressive but when I look the products I am selling a lot of them are already FBA… time will tell. The $50k into FBA is an option but I think getting a site that will drive sales takes a lot of the difficult first steps out of FBA…very good points though! thanks!
Best of luck Jon! I actually started this process about a month ago. I have been building out an affiliate site with essentially just heavy content and little to no seo (just guest posts where I can) and traffic has been increasing at a great rate. Already got in contact with a factory and TODAY my product is shipping out straight to Amazon. Exciting!
Well done Neil… I didn’t have the balls to ship direct to Amazon without first reviewing it… definitely would make life easier and I will get there with this business. What kind of volume are you hoping to push with your affiliate site?
Well, I got my samples first and they all checked out. I decided I might as well go big and ship directly to Amazon as if I grow the business I will have to do that eventually. Might as well learn now! What a pain customs can be though. The site is still pretty new but pushing 300-500 visitors a day so hopefully will be able to sell a few products daily to start. Plus I plan to give away a ton of products with a coupon for a dollar to get reviews so I sell more organically through Amazon.
Anybody knows if you are breaking any amazon rules by having you amazon affiliate link directed to your own private label products? ( Assuming you are using the same credentials for your affiliate and amazon fba account)
Why would you want your own affiliate link though? Just direct them to your product page. Unless, you want to collect commissions from other people’s purchases.
Unless I am missing something (which is very possible) this 8% would come out of Amazon’s cut and be an additional 8% in my pocket…but like I said I may not understand this correctly.
From my research, that cut actually comes from the product owner. I have seen a few reports from Amazon from other people selling and they have to pay fees for affiliates pushing their product.
Good question… I don’t have the answer but am very interested in it!
Hi Neil & Jon,
I can confirm that the 8% comes from Amazon and not the product owner. I’m doing this with several of my products at the moment and you’re basically getting commission for referring your own product.
If you can push enough product by using your affiliate site it works really well because your rankings in Amazon will start to increase as well. This, in turn, will lead to further sales.
Things are getting mighty competitive on Amazon – you should be doing as much as you can to stand out from the rest of the pack and this is a great strategy to do so. Worst case scenario is that you don’t sell any through Amazon organically (unlikely) and just sell by referring traffic from your website.
The foundation (the affiliate site) remains the critical and more difficult aspect, IMO.
Once you can generate the traffic numbers that you mention you have FBA as well other options to super-monetize the side.
For marketers, the US market is probably the most competitive in the world, but also the one with higher potential. Apart of it, do you target other (smaller) countries with your niche and authority sites? If so, do you have a rule of thumb to identify countries that are worth your efforts for the affiliate (and eventually FBA) business?
Hi Robert, I wish I had answers to those questions but right now I am just making mistakes/learning as I try and implement this plan VERY quickly.
Really good article. Had the same idea not so long ago. If you have a successful amazon affiliate site why not sell the product on Amazon for yourself if you are making consistent sales each month? You take on more risk but you can dramatically increase your income within a short period of time. And, with the availability of FBA and dropshippers it’s getting easier to do (still requires effort and some risk though.)
You go from tiny 8% commissions to getting all of the commission because you are selling it by yourself 🙂
Great article. Thanks for sharing it.
Exactly…plenty more to it than I write in this post but the basic idea sure seems sound.
Great lightbulb moment here. I have a site that sells lots of products and some of them could be $50 profit per unit if I sold them with FBA, which is a lot better than the $8 Amazon pays.
I had been thinking of ways to convert this site to use FBA but couldn’t quite visualize the best way to do it, or whether it was a good idea or not. This proves that it definitely is!
Hey Dom…if the numbers I have assumed holds this definitely shows it can be profitable.
The key is the ability of the affiliate site to drive sales of the FBA product.
What an interesting plan from you Jon Gillham. I knew Scot before but i did not give his lovely site a try to stumbling but with this latest discovery it a must for..
More grace to you elbow for this business discovery…..
Thanks Koya…looking forward to throw myself into this project.
I hope you can keep us updated on your fba ventures, it is interesting.
What kind of tool do you use for your graphics in the post? Do you use a payed tool linke photoshop or a free one link canvas? I am searching for a solution for basic shapes/borders/colors/text link you have here in the first two gfx in this post.
I will definitely keep you posted. Since the core of this model is the affiliate sites and that is where I have more skills I will definitely continue to talk about how to build/rank/improve these sites.
Jon – I admire your ability to take action so quickly on something like this. When I first started out with retail arbitrage FBA one year ago – I had this same idea. But I still haven’t pulled the trigger. None of my current niche sites at the time fit that model.
But the site I am currently working on does fit that model and it is in my plan. I’m taking my time though and making sure I do everything right. Building out the site first and getting it ranking, then once it’s pretty much done I’ll see about focusing on the FBA product.
The biggest benefit I see to this strategy is being able to get your site readers to review your products. Offer a coupon or even a giveaway in exchange for reviews which will skyrocket your organic Amazon sales. After that, you won’t even need affiliate sales from your niche site anymore! You could sell off the site at that point and just keep selling the FBA product. Let somebody else run and maintain the site and earn peanuts from affiliate commissions while you keep making the big money selling the actual product on Amazon!
Thanks Matt, once sales are coming in it makes it a lot easier to commit to selling via FBA. Hadn’t really thought about turning off the faucet of sales once I am making organic sales in Amazon but it would be a way to keep the capital tied up in the site moving (which is a part of the underlying magic behind the numbers). Regarding a list I completely agree right now I am getting 5-10 opt ins per day from one of my sites and have re-targetting set up on them to promote via Facebook and Web PPC once the product goes live (hopefully in the next few days). Good luck with your business.
Yeah that sounds like a plan Matthew… using the niche site to build a list and the list to help with reviews and boosting sales )
Hey Jon happy to see you are doing this, I’ve been planning the exact same process but have yet to figure out a good site structure. Not sure how wide I will go within my niche. Hope I can get some new ideas from you as you blog about it 🙂
Thanks Richard, I will definitely try and share the details.
Great idea Jon,
I think the plan is very perfect, you just have to try it and see what the outcome will look like.
Can’t wait to hear how it goes.
How much cut does amazon take?
If I’m seeing this right, wouldn’t it be cheaper to ship to yourself and pay someone to fulfill it?
Really good information Jon. I like your rinse and repeat calculations at the end. 3-5k a month doesn’t sound like too much. But scaled correctly as you show, this can be a million dollar business in a few years.
Yah those scale numbers definitely look pretty wild! Thanks for the comment.
I was planning on implementing something like this, but is this against FTC regulations? How are you disclosing your relationship with yourself as an affiliate? Wouldn’t this make your affiliate links “biased”?
How are you approaching this?
On all my Amazon Associate websites I have the affiliate disclaimer. Essentially saying I make money by recommending products from this website. You don’t think that covers it?