In my last monthly update I talked about my main plans for 2018: these are Amazon authority site, Amazon niche sites, dropshipping, Amazon FBA and this blog. I also mentioned about trading crypto currency, which is a very new thing for me. Crazily, in my first post on 3 October 2017 I talk about having seven different possible income streams!
To be honest with you, I’m concerned that I’m not working quickly enough towards my internet marketing goals. Basically, the savings I have will run out around end-August 2018 so I need to start earning a lot more than the £414 I earned last month (that was revenue as well, not profit!). Otherwise the dream will be over and I’ll probably have to go back to the corporate world….which I certainly don’t want to do.
So, in a nutshell, I really need to pull my finger out and put some solid plans together for earning cash…and then act quickly on these. It’s not that I’m being lazy at all, its just that sometimes I lack focus. I have read loads of places that you need to put a plan together, execute it, then modify or scale. The trouble I have is that I have an overview plan of what I’d like to do but no detail (or focus).
I think the other thing thats holding me back is too much attention on Amazon niche sites. I spent some time last night going through my 4 different business models (Amazon sites, dropshipping, Amazon FBA & crypto trading), and quickly evaluating them based on the following criteria:
- Effort/time involved. There is only me so I need to maximise my time/£ ratio
- Return on Investment (ROI). How much will I get back for every £ I spend?
- Speed of ROI. How quickly will I get my ROI back? This is where Amazon niche sites are currently falling down.
- ROI risk. Is my £ investment at risk? How likely could I loose all the investment?
- Strategy/blueprint. How easy is it to turn the business model into a process? This is essential for replication.
- Scalability. How easy & quickly can the model be scaled? Is it simply a case of invest more and get more back?
I wrote the evaluation up into a simple table. Rather than type up into a table, I though it easier just to show my notes:
I scored each of the four business models on a high, medium & low basis. As some of the highs were “bad” as well as “good” (e.g. ROI risk) I scored each criteria 1 to 3 (1 being bad, 3 being good). I then totalled up the score for each model and you can see the “ranking” at the bottom of my notes photo. I’ll try to explain the rationale behind each score below:
- Crypto trading – requires a reasonable amount of time a day to monitor trend, trade, etc, although you can set up alerts/buy & sell limits to semi-automate this. As I illustrate in this post, the returns can also be reasonable over a short period of time. I think out of all the models, this one has the least risk, especially if you adopt a safe trading strategy. In terms of replication and scaling, there are plenty of examples of people adapting a trading strategy and then scaling by adding more funds.
- Amazon FBA -with this model there is a reasonable amount of work upfront in terms of research and sourcing the product but after that, for one product at least, it should become more of a semi-passive income. There are plenty of examples of people getting a good RIO using FBA but it requires a fair amount of capital up front to get started. Its also a while between placing and paying for products and receiving your first orders from Amazon. There is a also a reasonable risk of your products not actually selling and I’ve seen cases studies of people launching say 5 products but only 3 being successful. Worst case though you could always liquidate your stock at cost to break even (assuming you don’t have loads of it!). The main thing for me is that Amazon FBA is a “real business” – you have products, suppliers, customers and you have big potential to scale the business that you own outside of the Amazon FBA platform.
- Dropshipping – the most attractive points about the dropshipping model are that (a) as an eCommerce model, your stock (and capital) exposure is minimal as you are not holding any stock, and (b) as it tends to rely of paid traffic to drive sales, then once you have found the optimum ad set-up, you can then scale it heavily. It would also be straightforward to create a process for identifying and testing products in your store. The other positive is that this model can offer quick ROI as you get fairly fast feedback from the paid traffic ads that you place. Something does concern me about dropshipping though, its a little bit “scammy”, just look YouTube for how many video there are of people “making millions”. However, I think dropshipping could teach me a lot about eCommerce so it would be worth experimenting and investing in this model in parallel with Amazon FBA, so that when I’m ready I have the necessary skills to transfer the FBA products onto other selling platforms.
- Amazon (affiliate) niche sites – don’t ge me wrong, I love niche sites, but I just don’t see them any more as a long term business model (unless you are a very big player). Back when I started niche sites in 2013/2014 it was reasonably easy to find a “best xxx” keyword, build a 5 page site, rank on Google within a few weeks and then build a few PBN links to get you in the top 3. Most likely, you would then be earning £500+ per month per site. However, things have changed massively since then. Google has got a lot, lot smarter a making niche site builders jobs a lot tougher. There are things like the “sandbox” (which holds back site rankings and traffic for around 3 to 6 months) and delayed link building effects (so you don’t know what works and what doesn’t) for starters. Niche sites can be a very profitable business model with very passive income, however, the fact that its very difficult to know what £ spent has what effect is not very good business sense. It also makes it incredibly hard to replicate and scale if you don’t know what works and what doesn’t.
So after the analysis and thought, what am I going to do differently on my journey? Basically, I will re-align my focus to the following:
- Amazon FBA – to me this is the most solid long term business model and will receive the most focus. I will continue with the plan I stated in my December 2017 update: “My plan for the Amazon FBA project in January is to complete the keyword/project research phase and end up with a shortlist of around 10 potential product ideas. For this I’ll also need to purchase the JungleScout Chrome extension.”
- Crypto trading – this only entered my sights over Christmas but I’ll follow the plan I set out in this post. The thing I like about crypto trading is that I can semi-automate certain activities (alerts, limits) so I can work on FBA most of the time.
- Dropshipping – as I already have a site set-up, it would be crazy not to continue with this and practise Facebook and Instagram advertising. I have a basic plan: “set an advertising test budget for around £200 and run a mix of product/audience ads for a number of days to get some experience.” I need to develop the plan a bit more though so this will probably be detailed more in an upcoming post.
- Amazon niche site(s) – I will only focus on my top earning site. As the ROI is difficult to assess then I will keep the spend down to a minimum by utilising existing Web 2.0/PBN properties that I have and handwriting the content myself. In terms of priorities, I will only work on this site when I have completed the monthly tasks for the FBA and dropshipping projects.
Well its good to get my thoughts on “paper” and I have a lot more focus now. I just need to get on with it and take action!
As always, please leave any comments or questions below.