What is a traditional Business Model?
So, what does a traditional business model look like? Typically, as a business owner you are going to develop a product or service that you think your customers will want. You build out this infrastructure to provide that service or manufacture that product. Once you have created a product you must then find customers and convince those customers that they should buy your product. This is done through marketing, advertising, and whatever other methods you use to reach people who might want your product or service. In my experience many typical first-time business owners struggle and possibly fail because they underestimate the cost and time that it takes to build that loyal customer base to buy a product. It’s because of the marketing side of a business that I believe a huge contributor amount of business’s fail. You get the product or service developed but then do not have enough capital to build out enough of a customer base to make your business succeed.
How does an Amazon Model Differ?
With an Amazon business model, a large portion of that marketing side of a business is already done for you. By utilizing a platform like Amazon, you can essentially cut the work you need to complete in half to make your business successful. This will increase your chances of success while also making the cost to get a business of the ground.
Human Beings also thrive when it comes instant gratification. With a traditional business model, it again takes time to build out that customer base so in some instances it could take months even years to start seeing the sales come rolling in. In many instances if you understand Amazon and find the correct products you can make money and see profit in months sometimes even weeks. Remember that when you sell on Amazon the customers are just sitting there waiting to buy your product so there is not a long wait to seeing that first sale. Seeing profits in weeks or months instead of years helps to keep someone motivated to keep pushing and growing their business.
In Conclusion
We have discussed many advantages of running an Amazon business, but I will also caution you that there are several downsides to this business model which will be covered in detail in a later chapter of this book.
