In the modern era of technology, there are many options for business growth. Due to the advancement in digital platforms and social media, people are trying to do online business. There are several ways to make money online. Millions of videos, websites, blogs, products, and software are launched in the world daily. Things have become unnoticeable due to saturation. This article will compare making money online with Amazon FBA vs Affiliate Marketing, which one is best for beginners.
In this situation, it is very difficult for beginners to bring their business to the notice of others. People often get confused about starting such businesses due to millions of options and competitors. You will also be finding it hard to choose one particular niche. In this tough competition, you need to be proficient in marketing so that people prefer your products to anyone else. The brief marketing knowledge and dedication can lead your path to success.
Understanding how these two business models work will help you decide which business model is right for you and suitable for your passion. Profit-wise or how fast you can make money with it, maybe one of your considerations to decide. Perhaps, you want to know which one is easier to run such business between them? Sit down and relax…, this article will explain all of your questions. But before that, let's understand what Amazon FBA is and what Affiliate Marketing is, and how each works.
What is Affiliate Marketing?
Affiliate marketing is a process of generating and driving traffic to sell the products of other brands and merchants in exchange for revenue. In simple words, affiliate marketing is a business experience through which affiliates get promotion in turn of marketing the products of others. Firstly, the affiliate finds out the perfect niche for which he has enough interest and knowledge.
After deciding on the products, you will earn a commission per sale made through his affiliate link. The more sales made through your affiliate link on the merchant's product, the more you will gain revenue. The link through which a person moves from one website to others is tracked. So, if you want to generate more revenue, you need to drive more traffic and sales through your affiliate link.
How does Affiliate Marketing Work?
Basically, affiliate marketing is a system involving three components in its work. The following are the components elaborating on the working of affiliate marketing.
- Seller
A seller is basically a manufacturer of products, having a goal of selling the products. Nowadays, there are many sellers in the market for marketing their products. For instance, a seller can be a merchant, an entrepreneur, a brand, or others. But all sellers have a common purpose of selling products.
- Affiliate
An affiliated person works as an interactive connection between seller and buyers. Actually, affiliates attract the targeted audience to purchase the products of sellers. By uploading informative content, they persuade the customers to make a sale. And they enjoy a handsome profit as commission as a result of every sale.
- Customer
Customers are considered the driving force in affiliate marketing because every sale depends on their demand, interests, and choices. Affiliates help them choose the best product by making comparisons, writing reviews, and designing tutorials. In other words, the whole process is based upon getting the customers' attraction to buy a product.
Due to these three components, affiliate marketing is considered a three-tier system. In this system, affiliates work as the guide for both buyers and sellers to get a commission in turn. Now, you can understand the working procedure of affiliate marketing.
To make your understanding more clear, I am going to discuss it a bit more. When I create a blog on the products, by comparison, there will be a link to that product as well in my review blog post. When you buy a product by clicking on that link, I will receive a commission. That's how affiliate marketing is done.
What is FBA (Fulfilment By Amazon)?
Fulfillment By Amazon (FBA) is another great service of e-commerce that increases the services and facilities of affiliate marketing. The Amazon affiliate program is used for product storage, packaging, shipment, refunding, and payment of the services. All this takes place between seller and customer through a digital platform all over the world.
If you want to sell your product through the amazon affiliate FBA market, all you need is to deliver your products to the Amazon fulfillment center. After delivering the products to the amazon affiliate center, you don't have to worry about its shipment to customers and payment receiving. Because all other things will be taken care of by Amazon.
All of your delivered products will be stored in the warehouses until they sell out. Whenever your product is ordered, Amazon employees will package and deliver your product to the customer. In short, it has alleviated the responsibilities of sellers in shipping and packaging products.
How does Amazon FBA Work?
The step by step working of Amazon FBA is explained as follows:
- Firstly, you should send all your stocked products to the Amazon affiliate center where products will be stored in any warehouse till it’s ordered. Unless and until your product is purchased from the amazon affiliate center, it will remain safe.
- After shipment of products to amazon affiliate center, listings are made about the category in which it is stored. For instance, if your stocked product is a laptop, it will be stored in the category of Electronic and Gadgets warehouse. If your products get damaged due to any disaster or accident, Amazon will refund you the whole retail price of products. It depicts that it’s safe to store products in amazon affiliate centers rather than your own place.
- The next step is to start product listing and sort them into a relevant category. For instance, if you are listing a Bluetooth headset, it will be listed under the “Electronics and gadgets category.” If your product got damaged, Amazon would offer you a complete refund of the product’s retail price.
- When the customer purchases your product, Amazon will process your payment.
- After that, you need to pack the product and send it to the customer.
- The product will be picked up by the delivery guy later from the Amazon center and is delivered to the customer.
After that, it is followed up with feedback to record user experience and rating of your product. If the customer receives the low-quality or damaged product, he can return it in 10 working days, and a full refund will be provided to the customer.
Your responsibilities as a seller
Amazon takes care of all the complicated and hard parts, but it would be best if you get to do a little part. Your responsibilities as a seller are as follows:
1- Decide your product: First of all, you need to decide what product would sell better in the market. It is important to spend time on your product research as your business success depends on that.
2- Maintain stock: Always keep your stock ready. When your stock inventory runs low, Amazon will send you the notification, but it is your responsibility to maintain it to fulfill all orders on time.
3- Consider Advertising to promote products: Amazon has a market of more than 2.5 billion every month. At the same time, there are 2.5 million Amazon sellers. So, you can say that the Amazon market is quite competitive, and you can only keep up with the best products and proper advertising. Study how to advertise on Amazon before promoting, as it costs a decent amount of money every day.
4- Look for the affiliates: You should also look for the best affiliates running a youtube channel or a blog according to your niche. They will promote your product links in their content or in the video description of their youtube videos. You can provide them commission accordingly.
Watch my video below:
Affiliate Marketing vs Amazon FBA – Pros and Cons
We have discussed Affiliate marketing and Amazon FBA in detail. Let's compare both business models to find what works best for you.
| Affiliate marketing | Amazon FBA |
| Affiliate marketing is the best way to earn passive income every month. You have spent years creating content and your audience. To earn extra cash, you need to promote some products and convince your audience to buy them. It is a risk-free business as you are just promoting other businesses' products while earning a handsome commission in return. Well, make sure to select the best and quality products to promote; otherwise, you will lose your audience's trust. | Amazon FBA is not as simple as Affiliate marketing as you have to do everything by yourself. It includes product research, business planning, marketing, all by yourself, and all this process can take years to create an audience. If you fail, your whole business idea can fail. To be on the safe side, always be very calculative about your products, target the right audience, and learn marketing tactics. Also, you need to do proper Amazon FBA marketing to generate sales. |
| If you are a product owner, affiliate marketers can help you market your product for some part of your commission. But, if you are an affiliate marketer, you need to market other sellers' products in exchange for commissions. Whether you are a seller or an affiliate marketer, you depend on each other for better product reach. Affiliate marketers promote your products through their videos, website, or social media accounts. They help you to reach a wider audience group by using their Whetherresources. | You own your own product, and you are not independent while doing Amazon FBA. Whether you are selling, arbitrary, or doing private labeling, you will get your products. Your audience will know you like the product owners, and you will have the freedom to sell. Also, you will be marketing your products. Amazon will only take care of the shipping, storage, and delivery of the products to exchange a reasonable amount. |
| While doing Affiliate marketing, you don't have to care about the products, storage, or shipping process. All you need to do is marketing to reach a wider audience. The seller will get the money, and you will get a commission. | You need to take care of each and everything. Like you need to check the product's inventory, damages, storage space, etc. Setting up the stock will be a big challenge as well. Overall, it includes huge risks and investments. In case you love taking risks, you can go for Amazon FBA. |
| It doesn't require any investment to create a product or store it. All you need is your youtube channel or a website to sell products. You can go with organic traffic. In case you want fast results, then you can invest in ads. | It requires a huge investment, and you need a team to start this business. Amazon provides all the services, but still, you need to pay Amazon as well. You need to invest in products, freight charges, customs charges, outsourcing charges, etc. |
| You don't have to monitor your progress daily. The shipment and inventory are the seller's headaches. Your job is to promote products, and as long as you are getting commissions, everything is fine. | You need to check everything daily after like sales, product progress, competition, etc. You can go with organic or paid traffic to generate sales, but either way, you need a team of people to run your business. |
What is the success rate between Affiliate Marketing vs Amazon FBA?
Let's discuss in detail what business model success rate is better and why:
| Affiliate Marketing | Amazon FBA |
| You can start Affiliate marketing with no investment. Like you can just start by reviewing products on Youtube, and it doesn't need any investment. | You need at least $2000 to start your Amazon FBA business. So, as you invest the money from your pocket, it would make you more serious. |
| Affiliate marketing is less complicated as compared to Amazon FBA. But, you need social media and digital marketing skills to promote products. | To succeed in this niche, you need to master analyzing niches and dealing with customers and manufacturers. |
| Depending on your traffic method, you may start earning money from day 1, or it can take years if you don't apply the right strategies. | The profit can start immediately if your product is successfully launched in the market. Also, you can buy more stocks if profits keep rolling. |
| You will be working quite hard in the initial stages. Like you have to generate a lot of content either for websites or youtube. But, when you successfully achieve this, you will be able to enjoy passive income every month with a little bit of hard work. | For passive income, you need to get help from people (Upwork, Fiverr, etc.) for listing, image designing, and much more. |
There is a huge success rate in both businesses, depending on your expertise and skills. I recommend going for the Amazon FBA only if you have the investment and complete details about the market.
How much does the average person make on Affiliate Marketing vs Amazon FBA?
Let's compare how much the average person can earn by affiliate marketing and Amazon FBA.
| Affiliate Marketing | Amazon FBA |
| You can easily generate $10 to $5,000 per month from an Affiliate Marketing business. However, when you become a super affiliate, you could easily earn $50k-$100k per month. To determine the profits, you need to consider multiple things like the amount of traffic, the number of affiliate link clicks, track the real buyers, commission rate, etc. | An average person earns more than $1000 per month in sales, and many of them even reach more than $250,000 every month. It reaches around 3 million dollars annually. According to an analysis, almost 44% of Amazon sellers make $1000 to $ 250,000 per month. Almost 6% of Amazon sellers are millionaires just from their Amazon business. |
How long does the average it takes to be successful Affiliate Marketing vs Amazon FBA
| Affiliate Marketing | Amazon FBA |
| For affiliate marketing, it can take six months to several years to become successful. Well, it depends on your knowledge, working practice. Whether you plan to start affiliate marketing via social media, youtube channel, or website, you need to work for around one full year. After that, you might start seeing some decent revenue. You can use more precise timings, and quality content as your success depends on that. Besides that, focus on the SEO part and promote your affiliate products to get more clicks and buyers. | According to 64% of Amazon sellers, they start earning profit within the first year of selling. The profit ratio within three months is 20%, 3 to 6 months is 17%, 6 to 12 months 23%, and within 1 to 2 years is 23%. Some of the Amazon seller's profits cross 4% within two years. The profits are not fixed; they depend on your market research, products, and many other factors. |
How much budget needed to invest to be successful Affiliate Marketing vs Amazon FBA
Let's learn how much amount you need to start Affiliate Marketing or Amazon FBA business.
| Affiliate Marketing | Amazon FBA |
| In general, there is no investment to start Affiliate marketing as you just have to promote someone else's product instead of your own. As mentioned earlier, you can start with a youtube channel or create a page on Instagram or Facebook. If you want to start with a website, you have to spend on hosting, domain, and wordpress installation. Keep uploading content after and start earning a good amount of website clicks every day. | You can start your Amazon FBA business according to your budget. If budget is not an issue, you can start with a huge investment knowing how Amazon FBA works. But if your budget is a little tight, you can even start with $500. The average product cost on Amazon is around $20, and its manufacturing cost will be around $5. You can order the inventory of 200 pieces to start with Amazon FBA and see how it will work for you. |
Which one is best for beginners Affiliate Marketing vs Amazon FBA? And Why?
| Affiliate Marketing | Amazon FBA |
| Affiliate marketing is easy to start. Also, you can do things practically and meanwhile keep learning. | Amazon FBA is quite risky, especially if you are a newbie, it has potential, but you need to learn and analyze the market before starting. |
| Affiliate marketing is best for startups as it doesn't require huge investment. | Amazon FBA is perfect for those who want to invest. |
| You just need a website or a youtube channel to start promoting products using Affiliate marketing tactics. | You need in-depth knowledge of Amazon FBA before investing; otherwise, it will be a lot riskier. |
From my perspective, Affiliate marketing is more beneficial for beginners as it has less risk and more learning. With time, you will learn the market and analyze it deeply. After that, you can decide if you really want to invest in Amazon FBA or not. Till then, to be on the safe side, you can choose Affiliate marketing to earn handsome commissions while promoting other products.
Conclusion
Here I have mentioned Affiliate Marketing vs Amazon FBA along with their complete details and comparison. Now, choosing the one that suits you the best would be your decision. Well, it depends on many factors like your budget, your working style, and your personality. If you don't love taking risks, then the best option for you is Affiliate Marketing. But, if you have a good budget and love to take risks and challenges, you can go with Amazon FBA.
The success rate in Affiliate marketing is quite less as compared to startups. You won't be able to earn thousands of dollars of passive income instantly. Also, it needs a lot of other factors that can't be ignored. So, if you are confident about your startup plan, you must go for business as it yields better results.
That's it for now. Take your time to determine which business model works best for you. Again, if you are just an individual with less money, then Amazon affiliate marketing sounds like a great plan for you to start with. But, if you have a business idea, a proper budget, a team of talented people, and a good product, then Amazon FBA is the way to go.
If you decide to do the Affiliate Marketing business, I suggest you read my blog on “How to Start Affiliate Marketing” so you can learn in-depth how you can start. But if you choose Amazon FBA, I suggest reading my other blog, “How to Start Amazon FBA,” as it will show you more details to start an Amazon FBA business.
If you choose Affiliate marketing or Amazon FBA, I am here to help you. If you are ready to build the business for Affiliate Marketing, you can join the One Funnel Away Challenge. It will teach you step by step and will answer any questions you have. Or, if you are ready to build the Amazon FBA business, you can join Amazing Selling Machine. It will guide you from A to Z to build your Amazon FBA business.
“The only thing worse than starting something and failing… is not starting something.” – Seth Godin.
