Sophie Howard’s two favorite ways to make money online both revolve around Amazon: FBA, where you sell physical products that are fulfilled by Amazon, and KDP, where you sell eBooks via Kindle. She has plenty of experience doing both, having sold more than a thousand different products through FBA and a thousand different eBooks through Kindle. But what are the pros and cons of each business model? And which one should you do? Or should you do both? Or neither? Read on to hear what Sophie has to say.
The number one advantage of both FBA and KDP is the pile of customers already on Amazon, searching for the very things you could be selling. Be it a cheese grater or an eBook on keto recipes, right? And that’s usually the hardest part in any business, is just getting in front of people who wanna buy from you. Another plus to both FBA and Kindle self-publishing is that there are software and tools you can use that tell you what’s doing well, how much you might make if you sold a similar product or eBook, and basically the blueprint to compete with those top sellers.
Of course, both models allow you to scale quickly. You’re not bottlenecked by shipping, returns, customer support, having to build a big team or manage a warehouse. And you’re not limited by how much traffic you can drive from Instagram. With both models, you’re paid on time, every time, so there’s that too. Amazon also provides you with really great data. For example, which keywords people are searching for before buying from you. This helps you further optimize your listings and potential PPC campaigns to snowball sales.
The differences between FBA and KDP are pretty obvious. When selling physical products on Amazon, you’re looking at more money to get started. Sophie recommends at least ten K. Half for education, a couple grand for your first product order, and some extra for marketing. With Kindle eBooks, you just need to pay a ghostwriter, maybe a graphics person for some cover art, and then you’d also want some extra for marketing and a mentor. But all in, you could launch with a few grand.
Beyond that, the big benefit eBooks have over physical products is you don’t have to waste time, energy, or money managing inventory. That’s the beauty of digital assets. Create it once, sell it unlimited times, right? That’s also why, with eBooks, your margins are better. Whereas, with FBA, if everything goes perfectly, you might take home a third of every dollar you make; with KDP, that number could be as high as sixty or seventy percent. So all in all, eBooks are quite a bit less risky.
KDP is more recession- and pandemic-proof too. You don’t have to worry about China not shipping your products over to Amazon’s warehouse, for instance. Also, with eBooks, it’s easy to take your winners and convert them into other formats. Paperbacks, audiobooks, et cetera. Now, if you’re trying to build the biggest business you can, well, you’re probably not gonna create an eBook that ends up making you seven figures a year. Yet, the top Amazon FBA sellers do that all the time, especially in niches like supplements and skincare.
Since Sophie sells courses on both Amazon models, she understandably goes light on the downsides, so please, allow me to assist. From my vantage point, the FBA process is way too slow and expensive and cumbersome to interest me. Kindle publishing is more appealing, but I still see two big drawbacks. One, Amazon could yank the rug out from under you at any time without warning (and they’re notorious for doing so). And two, even if you’re successful, it’s way too easy for new competitors to copy you.