Is Amazon FBA a business that provides a true passive income? Tim’s answer to this is, “Depends on who you ask.”
A lot of gurus would swear their course is a hands-off model where it’d only take you some money and a few simple steps, and voila, you’ll be collecting checks in no time. On the other end of the spectrum, however, you’ll find the “naysayers.”
These “Negative Nancys” have but nasty words for such a program, saying it might be better for you to work at McDonald’s than put yourself in a lot of work and earn less.
But what is Tim’s take on this? He says, “So one of the things I really like about Amazon is, depending on what your goals are, you can fit it around it.”
“For instance, some people want to build a huge e-commerce empire. This is generating millions or even millions of dollars in sales. Others want passive income that allows them freedom from work and can live anywhere they like.
Perhaps he’ll travel around the world when all the COVID lockdowns are lifted.”
He continues, “What about you? What goal do you have, and how would Amazon FBA fit around your life? What’s your Polaris star for an Amazon FBA business? If we want our Amazon FBA business to fit passive income, is that possible?
I’m gonna tell you yes, indeed it is. After you find your product, you source your product, you bring it into Amazon, you’re gonna go through a launch phase to bring your product to the front page of Amazon’s results.”
He further emphasizes, “Then what? “You’re gonna turn on your advertising, we call that PPC.
“And then eventually, all that it’s gonna require from you are a few things. One, customer service.
You need to answer all questions that customers shoot into you within a twenty-four-hour period. The next thing you gotta do is keep track of your competitors. Make sure there’s nobody new coming into the niche, that nobody’s lowering or raising their prices.”
Additionally, he goes on to stress, “And then finally, three, you need to reorder inventory on time.
“Now, I reorder roughly every two to three months. Sometimes longer than that. But that’s about it. That is about it. In fact, I have a brand on a smaller account, one that I don’t even show, that only has two products. And I’ve had those two products for over three years. I’ve only made adjustments to these two products may be under five times. I literally set it and forget it.”
The best way to do this is to watch the market and your inventory like a hawk. Never stop learning, sourcing and launching new products. This is exactly how Tim does it with Private Label Masters.
So it progresses from highly active to less active to basically just passive over time. However, you may hasten the passive portion by getting help. For example, you could hire an overseas VA for customer support or someone in the United States to keep track of inventories and competitors.
Pretty much the same way you would hire a property manager if you owned property. So yes, Amazon FBA can definitely be passive as long as you choose it to be.