Making Internet Money and Taking Advantage of the Work From Home Era
Making Internet Money and Taking Advantage of the Work From Home Era
As more and more of us find jobs that allow us to work from home. There is suddently an itch that needs to be addressed. Can I be making more ?
I am your average Joe, a salaryman. Having two Bachelor's degrees in highly competitive fields doesnβt do me any favors or insulate me from a choppy job market. However, to fully understand my sudden urge to build my brand, Iβll explain how we got here in the first place.
Old Schedule
Wake up at 6, shave, and shower every day cause Iβm a hairy bloke. Be on the train by 7. Listen to whatever is on Spotify for an hour & 10 minutes. At my desk by 8:30. First outgoing call by 9. Lunch at 1:30. Leave at 5:30 and be at the train station by 5:45. On the train and home by 7. Cannot think of anything other than sleep by now.
New schedule
Wake up at 8:25. Log onto my WFH setup in my Pyjamas by 8:30. First call by 9. The gym at one and have a quick lunch before returning to work. Done by 5:30-6. I take a quick nap till 6:30. Work on a side hustle from 7-whenever I go back to sleep. The difference is night and day being busy working at 70% is better than looking busy, working at 50%.
The End of the Beginning
But this is normal for many folks today. The difference is that many are squandering this extra time gifted to them, including me. When I first landed my new job, I was playing video games from 8 pm-12 am. A teenager would scoff at those numbers, but Iβm no teen. Then it dawned on me. I complained so much that I had no time to do anything besides my day job. Now I have this golden opportunity, and I am floundering. Time is something you wonβt ever get back. So the first thing I did was sign on as a founding member of this Substack. Which has been a net benefit.
If you believe in death by a thousand cuts, the inverse should apply. Unless youβre Mark Zuckerberg, you will not have one single idea which will make you wealthy. Iβd personally rather have five silver eggs than one golden egg. Enter the E-Commerce space and my next big learning experience. Just like I learned to write, communicate and disseminate complex Macro/FX topics into bite-size chunks on this stack, I will also keep readers abreast of new things discovered in the Ecommerce space and hope you will need to take one less perilous step on your journey.
WARNING: THIS IS NOT A DROPSHIPPING COURSE. Building your own business online is a pain in the ass.
What is the difference between Amazon FBA and Shopify?
Think of a business cooperative. It is a large entity comprising individual bodies that feed into the overarching system. Amazon is a behemoth; however, very few of its goods/services on the marketplace are developed by Amazon itself. You can count them on your hand, Amazon gaming, Amazon Prime, and Amazon Launchpad. The marketplace is made of thousands of sellers ranging from multinational corporations like Apple to your local retailer trying to sell their custom candles in the store. No one seller will make up more than 20-25% of the overall seller base on Amazon. It is, in a way, decentralized. However, we can go on and on about Amazon, but this article is already long enough, and we need to talk about the other guy, Shopify.
What is Shopify and can I shop on it?
Shopify is a new kid on the block. It is not as sophisticated or developed, but it is a scrappy one nonetheless. It is a digital marketplace that does not have any of its products to sell. It is, however, an all-in-one stop for any budding e-commerce businessperson. Every business has a few key things to account for, amongst others, like marketing, operations, product development, payment processing, and compliance.
Learning through example is ideal, so letβs use the example of a handbag. You can sell handbags on both Amazon and Shopify. With Shopify, You will first design the handbag website with their built-in design tool. You will fill out the page with products/services. Then add auxiliary functions like Terms of Service, FAQs, Shipping tracking, Returns policy, Data retention policy, etc.
Then you will connect the site with Shopifyβs Payment processing service called Shopify Payments (your situation will vary based on which country youβre in). Once the skeleton is complete, you then need to connect all of your social media channels to the platform so they can track your Facebook, Google, and Instagram ad and SEO activity. Monitor those channels to see how much revenue is being generated by each funnel. You can also buy and retain your domain on Shopify. You see where weβre getting it. Shopify provides everything that a modern businessperson requires to start an online brand; it is an empty canvas that you can fill out with as much or as little detail as you like. It is creative freedom.
People Need Structure and a Little Hand Holding
Therein lies the biggest issue. Freedom. You can be given the sharpest sword in the world; youβll still blunt it if you use it to hack away at a tree. Shopify is all you need if you want to build your brand. However, that's it. Most newcomers donβt know the first thing about e-commerce. What sells, what people like to buy, or when they want it. It gives you everything except directions. You can make millions as the split between vendors and Shopify is generous, but you canβt even stand on your own two feet and figure out how to source products, let alone make millions. Enter Amazon.
When a Billion-Dollar Company Holds Your Hand and Your Wallet
Amazon has a more structured, rigorous, and restrictive system in place for its sellers. There are three main ways to sell on Amazon. They are:
Retail Arbitrage: If you find an old book at a thrift store for 30c and sell it as used on Amazon for $2
Online Arbitrage: When you find a book selling well on Amazon, buy ten units for $1 with permission to resell for $8 and essentially split the cost/profits with the manufacturer and Amazon
Wholesale: When you buy 100 books on Amazon for a slimmer unit cost but essentially hold a monopoly on that specific product on Amazon(and all the risk).
Private Label: You become an originator. You contract a manufacturer to develop your unique IP, become the Wholesaler/reseller, and sell it directly on Amazon.
All have risks, All have benefits.
With Amazon, you WILL NOT have a discernable storefront. Apple can only copy-paste its page own onto Amazon. Although an independent business, you will be all but invisible to customers and are essentially a cog in the Amazon machine. An employee, but not really. The degree of compliance and rules around Amazon FBA means you cannot build your own brand as you would on Shopify.
However, having said that, you now have access to one of the largest marketplaces in the history of mankind. Amazon is a data scientistβs dream. It is a data-driven enterprise where it is cash in, cash out. Your main concern is selling what already sells well, so the question becomes, how many Harry Potter books should I stock up, and will I have enough to cover my Unit and Shipping Costs?
Marketing channels, Tiktok ads, and SEO largely go out the window as you are piggybacking an established brand. You are more like a trader finding gaps in the market than anything. You will have no loyalty to products and a bestseller one month will be an afterthought the next. I am still learning this. Your life will revolve around Amazon. When is Prime Day, what is the shipping time from China, and how do I minimize costs? Essentially Amazon FBA requires you to think like a CFO, and Shopify asks you to think like Steve Jobs.
Conclusion
We have now scratched the surface. This article is aimed to introduce the two markets and lay out some basics. If you take away anything from this, it should be that Amazon is made for those looking to optimize existing products and piggyback success in some instances until they can develop their own. Having said that, your net profit after fees will be roughly 15-30%. Shopify is for those playing the long game. If you have a long-term business plan and the cash to boot, you will spend an exorbitant amount on setting up everything from scratch, but you will eventually have a brand to your name. Ultimately itβs up to you.
I plan on doing both⦠Come subscribe and see how it goes. :)
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