What is popularity?
Why anything gets popular?
Which exactly are the traits required to make something famous among people?
These concepts should be cleared before discussing the topic ahead.
Popularity, it is an adjective which has the mightiest impact on a person’s life and on every other thing in this world. This is the era of distinction and universality; people like to be famous and make the things popular which worth the word. Nothing gets fame without paying the cost and same goes with this Most Popular Business Model around the globe- Amazon FBA (PL).
Today we are going to discuss why FBA (PL) is reaching the peak of notability and why everyone is interested to invest all of his nest eggs with the least fear of getting them drowned down the drain! So, let’s start it…
PERCENTAGE OF PRIVATE LABEL (PL) SELLERS AMONG ALL THE OTHER BUSINESS MODELS ON AMAZON
You can get an idea of the popularity of anything by looking at its number of users. This is exactly I’m going to represent here to show you the level of distinction FBA (PL) lies on among all the other 6 models on Amazon.
A survey conducted by Jungle Scout in which the percentage of 1000 sellers was broken down between the other famous Business Models on Amazon. It reveals that 71% of sellers choose FBA (PL) method to sell on this huge selling giant, while 26% were wholesale users, 20% were the user of Retail arbitrage, 15% use Online Arbitrage, 8% are drop shippers and 6% sell handmade goods.
This huge percentage of FBA (PL) user shows the highest extent of its popularity. You now might be wondering what are the reasons of this huge difference? Let me tell you…
DIFFERENCE BETWEEN TWO MOST SELLING BUSINESS MODELS ON AMAZON
If we take two most popular business techniques used by most of the sellers on Amazon (though the percentage of FBA (PL) is much higher than the wholesale) and make a comparison of both then we can understand why FBA (PL) is the most desirable method of selling on Amazon. We will discuss the differences step by step.
FBA PRIVATE LABEL- FBA (PL) is a business model which offers you to sell your own brand. You need to purchase your inventory from the manufacturer on Alibaba (the most common wholesale platform) or some other website, give it your brand name, design your logo, decide your packaging and send it to one of the warehouses of Amazon.
AMAZON WHOLESALE- In this model you get the already branded products from the distributors and send them to the warehouse of Amazon. You don’t make it your own brand, don’t have a complete control of it, you just start selling someone else’s products. It requires more effort with less profit margin without any asset making outcome.
FBA PRIVATE LABEL- If you are planning to invest $25k to $30k and looking for a profitable business then Amazon FBA (PL) should be your choice. Almost 62% PL sellers invest even more than that to get started because it gives a higher percentage of the surety of investment return with an elevated profit margin.
AMAZON WHOLESALE- This model requires less investment as compared to FBA (PL) but the profit margin is also lower than that. Almost 51% of wholesalers on Amazon invest less than $2500 to get started.
FBA PRIVATE LABEL- FBA (PL) allows you to make 20% to 30% profit and sometimes you can make even more than that. A study shows that 55% of Private Label sellers make $5000 monthly and this figure becomes larger with more efforts. Learn more about What is Amazon FBA PL and is it Right for Your E-Commerce Business?
AMAZON WHOLESALE- Whereas in Wholesale model, don’t expect your profit to be more than 10% or maximum 15% to 20% (rarely). 59% of wholesalers make less than 20% profit out of their whole investment.
FBA PRIVATE LABEL- It is an automated business model without less time and effort once its launched and ranked. According to a survey, 57% of sellers spend less than 20 hours per week while 12% are spending less than 4 hours a week on their business.
AMAZON WHOLESALE: This is undoubtedly a really time-consuming technique with an exertion of limitless efforts. According to stats, more than 50% of wholesale seller spend more than 20 hours to run their business. While 19% have to be available for more than 40 hours a week.
FBA PRIVATE LABEL- The most appealing part of FBA (PL) is that you are selling your own brand and are creating an asset which can be flipped anytime after spending a year. It is like a gold mine for you, you can cash it whenever you want by multiplying your per month profit with the figure of 30. Yeah that’s how it results in the end… isn’t it great?
AMAZON WHOLESALE- Don’t forget that you are selling someone else’s brand here, no matter how much profit you make per month but you can’t flip it. You will come to the point from where you started at the day when you decide to leave it and go for another opportunity, whereas FBA (PL) will end up with an asset of 30 times bigger than your monthly profit.
Everybody knows about the increasing demand of Amazon FBA (PL). I made an easier comparison with the two most common methods to sell on Amazon to understand the worth of Private label. Now you can easily evaluate why it is getting popular among new and existing sellers.
It allows you to create a flip able asset with less time, less effort and more profit under the shade of your own brand. You enjoy many other perks by being able to register your Trade Mark and creating your own listing without even having the constant fear of losing the Buy Box (an opportunity to get sales when more than one person is selling the same brand).
It is suggested not to put your highest extent of energies on the tasks which are not going to give you the same extent of outcome. You have gone through the entire article; you can now decide very well whether the hype regarding Amazon FBA (PL) is justifiable or not! I know the answer… Learn more about Amazon FBA PL – A Journey Towards Million Dollar Flip-Able Asset