Whether e-Commerce Business or an Affiliate Marketing?

A TRUTH about E-Commerce Business and Affiliate Marketing!

In most of the retail businesses, monthly sales will up and down. You have to deal with all stakeholders including vendors for stock quantities, back orders, quality relate matters, price negotiations to earn reasonable profit, etc.

Extended shipping time, headache gaining favorable negotiations, etc. As Chinese vendors are more in international market and when their New Year come around, you just forget about reaching them anywhere till their vacations end. This will greatly affect your forecast about profitability or sales target.

Another big tension, you will regularly keep in mind the stress about UPS working status, Courier’s messing up deliveries, losing parcels, and friendly & effective feedback to customers’ complaints in this full of stress working routine.

This bundle of routine pressures leads towards an unnatural and unhealthy quality of living. In this scenario, you will just take an in-depth breath and will decided to turn off your million-dollar business just because you will not want to deal with such bunch of stresses.

Absolutely YES. You will start looking for some other alternates that will not comprise of all these stressful things. The best alternate you will find is “An Affiliate Marketing”.

An Affiliate Marketer:

An Affiliate marketing is very convenient and is a practice to advertise other’s products or services and receive certain commission on every tick, sale, or inquiry depending on the agreement between the seller and the Affiliate Marketer.

Why Do Not to Start an E-Commerce Business?

This is a shocking surprise!

You do not have to deal with customer services and support related matters, searching eyes catching products, or depend upon others to control your business to generate income for you.

You will just have to focus on ONE THING and that is Marketing.

Once you will figured out it – you will come up with constant cash. Even million dollars in a few months. And most interesting part of this is almost maximum earning part will consist of your profit instead of cost.

About “profit” we can discuss it at some later stage which business gurus are ignoring to mention while promoting e-commerce business.

It is worth mentioning here that It is great to have million dollar business of e-commerce but if you will calculate an the end of a particular period n find that you have only 10% maximum while stress is worth of million dollars, definitely, you have to think about it. 

  

At this figure of profit, you might get work in any company where bundle of stresses is the responsibility of the owner who is owing the business.

As soon as you will learn techniques to generate high profit at the cost of minimum stress that will come in while generating sale leads – you have had consumed your maximum energy. 

Continue to read it, you will find exactly what are you looking for.

You will surely generate hundred million dollars, in a same time, you will earn million dollars through e-Commerce business.

 Reasons Not To Start An e-Commerce Business:

Most of us want to start an e-commerce business because we think that it is very simple and easy to run. We inspire by the lifestyle of business gurus who are delivering lectures on social media, having air-book on a table, traveling worldwide, doing their work from anywhere, spending their 9-5 time. And we also want to get all this.

Well e-Commerce experts say that an e-Commerce business will give you anything BUT not that type of lifestyle you have inspired with.

In e-Commerce business like Amazon FBA etc you must search constantly for the products with high conversion rate, effective negotiations with vendors, procurement of products for stocks, managing competitive shipping arrangements, quality assurance, warehouse related matters, etc. Here it is more important in Amazon FBA, you need to mechanically check your competitors’ pricing strategy. If big gun comes along and is able to out-price you, then all the work you have put into your research and bargaining with vendors are ruined.

At this situation you will not have chance of refund or exchange or returns. You may only have the option to welcome all the inventory you have bought into your home.

Does this sounds comfortable for you?

A lot of people on social media portray that it is very simple business approach with high rate of return, really sick me their words.

Do not know why don’t people give their honest opinion? Why can’t they speak truth? Which is not nice one.

It Does Not Provide a Friendly Environment to a Newcomer:

Exactly this is what forced me to write on this topic.

Being a newcomer, nothing will be given to you in a plate. You have to take every step from scratch. You must search for products with high conversion rate, competitors and their price strategies, prospective vendors, negotiations with them, shipping and warehouse arrangements, and many more. My aim is to teach you well so you can make better decision for your online business what you like to start having all these information keep in mind, instead of just relying upon sugar coated words of the people whose just motive is to inspire newcomers for e-Commerce Business. They intentionally hide hard side of this online business.

In presence of all above full of stress matters I think an Affiliate Marketing is much better one, but here one thing should keep in mind you have to make necessary struggle for your business to make it successful, no one will give you dollars in your hand without effort. Your continuous encouragement is only your reward, so put your maximum to rise your earning graph.  

Its Pricing Strategies and Competition:

Let me explain it. Suppose you have searched a wonderful product that actually the desire of the people and they want to buy it.

Very Nice! Now the issue is its price. You must start search again and this time search for its vendors. You will face a lot of complications in price negotiation. Because price competition is a big challenge for you to face ahead. It is a real arm and ammunition of a seller in field. So only competitive price will give you an edge in between your competitors. People who are selling Amazon courses like PL, FBA, FBM, etc will never mention that it is not for the people with no knowledge of business or even with small amount to invest.

It is very hard to compete with big companies who have investment to buy stocks in bulk and receives incredible discounts in unit price. It is not possible for a beginner to hold its profit margins in the given circumstances. Company which is enlisted with bulk stock will offer very cheap process knowingly that others cannot offer such a low price. Even price without profit margin.

Buyers will switch over because of price competitiveness, this is what really happens on Amazon, e-bay, shopify, etc. And if you will not offer competitive prices – you will lose your sales over a period.

Eventually, you will not have any choice just to remove listing of your product and recall your inventory from the warehouse. Because it is best option left with you to reduce your daily lose of warehouse cost, your time and services cost, etc.  

The company who was give them tough competition was not earning any cent as profit but not losing anything as well.

This is real time, the company was looking for, they will raise their prices up to a wholesome profit margins, while the other like you, the beginners, or sellers with small investment, get stuck up.

Here it is a bitter truth but a reality, this kind of big companies starts approaching its competitors through different means and shows their willingness to buy their stocks in very low prices or even in cents. At that time, this offer will look like a blessing in disguise.

  

It is an important principle of the business; Consumer demands competitive price and always tries to get best discount rates.

It will look very sad, if you will stuck up in any such condition, and end up your hopes, your money, in a very short span of time, and especially, when you did not make any mistake, in whole process you followed, and your competitors compelled you to jump in this hell.

Its Requirement of Working Capital & Cash Flows:

Here is a big question mark “?” looking to you before going to build an Amazon store. Why have you not amazed when someone offers you to build a store for you on “Done for You” basis?

He builds it and even run it for you. Sure, he will charge you in advance US$2,000 to US$20,000 depending upon scale of store to make it up for you and also the profit margin between 25% to 50% in addition to set up cost.

But why is he doing it for you, not for own self? This is a question that really demands an answer from you. Why is he not set it up for own-self and get 100% profit?

The answer is very simple – Working Capital and Cash-flows.

 I would like to explain it to you in a more sensational way but keep it in mind, this is the truth about Amazon store.

For instance, you have a capital of US$5,000 for your amazon store and you bought your sale-able inventory with this capital amount for your first month of business. Here, you assume that you will rollover this capital amount for your next month and so on.  

You have added 20% profit margin in your sale price of the product. This is very rare but for the sake of understanding you can assume. 

So, in first month you earned US$6,000 with the investment of US$5,000 and earned US$1,000 profit, seems good. Right? You’ve US$1,000 in your wallet in first month of your business.

But here situation is not as looks like, during first month you need another US$5,000 to buy sale-able inventory for second month before start of this second month.

Second months, your earning of first month still in process of maturity and once it will mature you can withdraw it.

Your second month is going on and before start of third month, you need another US$5,000 for purchase of sale-able inventory of third month.

See how cash flows works in Amazon Store!

You need US$15,000 to establish US$5,000 worth of a store. This means that you will earn US$1,000 monthly profit with the investment of US$15,000. And you need fifteen months to pull out your investment if all other factors remain constant.

Now, after fifteenth month, you can re-invest your profit in this business. But keep in mind about the big guns of the market…. might makes right…. see above. 

Yes, it is a nice option if you have extra money to invest. But in most cases people want to make it their profession and source of income. If you make it your source of bread and butter and start wholly depending upon it, you burn your boats behind. Similarly, if you know about trading in the stock market, it is somehow similar in nature. Same as “he who has the gold makes the rules”.

   

With your whole sum of capital, you earn tiny profit amount and in fact at high risk and with considerable turnaround time, is really demanded more thorough knowledge before to startup this business.

This is actually the reason why those people offer you their services on “Done For You” basis because it demands gigantic working capital to feed your smooth cash-flows. They work with your capital and get some percentage out of your profit.

Is there any alternate, you can choose?

Here I am sharing with you a story of a successful Affiliate Marketer and his journey towards financial freedom using the Internet.

He gained huge success as an Affiliate Marketer. He simply advertises online others’ people products and service against percentage commission on every tick, sale, or signup as the case may be.

- He does not have any tension of price competition. Even he prefers to sell brands with high prices.

- He does not require to deal with customer support and services related matters. Every inquiry or query is the responsibility of the seller to resolve it.

- He does not worry about profit margins. Always know what he will realize on each sale irrespective of price fluctuation due to market competition.

-  He does not worry about working capital requirements. It is entirely the responsibility of the vendor to arrange and invest for his smooth business operations.

Now, it does not mean that I am opposing e-Commerce because I am against this business model. Not at all.

So as to disclosure, it is admitted that to get approval as an Affiliate Marketer is not as easy as a few years ago when competition was not as much as it is now a days. Any company has affiliate program does not mean it will give to an option to become its part immediately when you apply. In fact, they have thorough review process and you’ve to go through into it.

A struggle is must here as well, but stress is not as much as you realize in e-Commerce. In fact, some senior affiliate marketers offer partnership to beginners, so they can learn the process and get benefit of their experience before to jump into it.

It is  the thing I really believe that can and will help you to get startup.

One day you will have gained access to many affiliate programs independently, simply by stating your past performance and affiliations which might others do not have to compete you. This is the secret of your success in affiliate marketing and your path to success.

I'll really happy to see you a successful person in your life!

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