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I’m going to talk about something that I’ve always alluded to in my monthly income report, but did not elaborate much on previously. This is an experimental project between my team, E-Alchemists, and a local company.
One of the reasons why I feel ready to talk about this project now is because over the past months, after publishing a post of my authority site project, ieatandeat.com, I’ve received quite a number of requests for joint venture projects with various companies to handle their online marketing and to sell their products. I had to turn down quite a few because I felt that they didn’t add value to my current business.
However, it’s finally time to give this new project and case study the attention it deserves!
While trying to create more authority sites, I started to think that Amazon niche sites are not long term and basically the business model of the niche site is like this:
1) Identify a niche
2) Research keywords and look for the keywords that has organic traffic volume and little SEO competition
3) Hire writers to create product review content
4) Setup the niche site and add affiliate links
5) Start SEO and wait for it to rank
6) Repeat the step from 1 to 5 and roll out new niche site
Out of 10 niche sites, there will bound to be at least 2 to 3 niche sites doing well, giving you passive income while hoping that a google algorithm update wouldn’t destroy your niche site.
Doing amazon niche sites also does not add value to the users, the only thing that the user does is to read product reviews and then click the link and go to Amazon to purchase the product. The same user will not come back to your niche site and purchase other product.
I am not saying the Amazon niche site business model doesn’t work, it’s just that it doesn’t work for me.
Then i started to do research on Amazon FBA Business Model.
There was a lot of buzz recently regarding Amazon FBA business model especially from a post from Chris where he shared how he make over $12k in his first 68 days on Amazon FBA.
Here is how Amazon FBA work
I personally never tried this business before basically this business is like this:
1) Look for a unique product at Alibaba.com
2) Contact the manufacturers and order a sample
3) Receive the sample product and start to take pictures
4) Add in your logo and product packing and start to manufacture and create your amazon listing
5) When products is ready, start to ship to Amazon FBA warehouse
6) Amazon will processed the product in their warehouse
7) Listing goes live on amazon and start to sell
Here is what I don’t like about this Amazon FBA:
1) Manufacturing start up cost – can be quite high depending on your products
2) Shipping or Freight cost – can be high depending on what kind of logistics company you are using
3) Amazon Fees
4) You will have inventory issue and is depending your on sales at Amazon.
5) You don’t own the customers because they are from Amazon
6) Eventually if the product is selling well you will start an e-commerce site yourself and break free from Amazon FBA.
So after going into deep research and I confirmed that amazon niche site and FBA business is not for me I started to look for another angle to do e-commerce. It happened that one of our client wanted to launch their e-commerce site and is looking for developer to develop it. We saw an opportunity in their niche and here are some facts:
The client already very successful in their niche offline and everyone know the BRAND name
It is highly recognized by industry players and they had already had a lot of customers for the past 10 years.
If we launch their e-commerce site and it will be easier for us because they already have an audience.
So instead of engaging our online marketing services, this client agreed to joint venture with us and also give us a 15% commission of every item sold online.
In return, we will provide all in one online marketing solution to their new website and also a 15% commission of every sale made online. We will control all their web properties which include the website, social media and email listing.
Our JV partner which is our client will do the order fulfillment, coming out with new product, inventory management, shipping and customer support.
We started this project in January 2014, it took me and my team a few months to sort out some of the issues. There were web hosting, products and workflow issues. During the first 6 months, we were also not sure what to expect as this is the first joint venture website. The only thing we do is create e-commerce function on the existing website and also migrate their web hosting to our server because we wanted to control everything.
There was nothing much done, except the SEO had been running and we only manage to make a few hundred per month. Finally in November 2014, the management decided agreed to do a website revamp according to what we proposed.
So in January 2015, we launched the new site and also took control of their social media accounts which include facebook and instagram.
In 2014, we only managed to have 15k visitors in total, and is around 1.1k visitors per month.
However, in the first 6 months after we launched the new website and also took control of their social media accounts, we doubled the traffic.
For the first 6 months in 2015, we had already increased the traffic from 1.1k visitors per month to 2.2k visitors per month. Things we did differently this time:-
I am quite happy with the result in terms of traffic.
|Month||Visitors||Net Sales $||15% Profit Sharing $|
For the whole of 17months into this niche e-commerce project we only managed to earn $4549.19.
Overall I feel that the first 12months of into this project was gathering data and also to build relationship with the other partner.
I will be continuing to push this project till the end of the year to see if there is any improvement and also to judge the time spent on this project, whether it’s worth the effort.
As always, I’d love to hear your thoughts, comments, or questions below. Today was just a quick introduction to our project; so if you have anything specific that you would like me to address in a future post, please let me know in the comments.