Authority Website Income
Shares

Amazon Affiliate Site to FBA Business

Today’s post I get into the weeds of how to analyze an affiliate site you either own or are considering buying to convert to an Amazon FBA model.

Big Disclaimer – I have not fully verified this model… I have one successful win under my belt with this strategy and another business which is struggling a little with this conversion. So although I have successfully done this once and watched others do it there is risk(like all business)!

 

Basic Strategy – What the heck am I talking about?

This strategy is the basic strategy I followed to build and sell an Amazon Affiliate Site and Amazon (Fulfilled By Amazon / Private Label Product) business in 8 months with a 530% return and made $334k including sales price and net earnings.  See the full case study here – how to sell Amazon FBA business.

  • Step 1 – Build or buy an affiliate site that is generating sales of a product you believe you can source and private label yourself
  • Step 2 – Start an Amazon FBA business leveraging your affiliate website to drive traffic to your sales page.

What if you own  an affiliate site and are considering using it to build an FBA Business? Although a lot of the details in this post talk about considering the FBA model when buying a website, the information below is the same approach you would use if you own an affiliate website already and are looking to convert it into an FBA business.

phase1

What I Will Share in This Post:

  1. How to analyze the potential of an affiliate site for an FBA business
    • A – 10 Point Checklist Weighted Average Matrix to evaluate if the site could work
    • B – How to get and analyze the data to estimate potential sales driven by affiliate site
    • C – Assumptions to use based on my experience to gauge the impact Amazon organic sales will have
  2. Run the numbers (what is the expected net profit for the FBA business?)
  3. Spreadsheet I use to do this analysis – Free Download (Completed for One fake Site)
  4. A clever/slight twist on the Affiliate to FBA conversion model

 

ONE – How to analyze the potential of an affiliate site for an FBA business

A – 10 Point Checklist and Weighted Average Matrix To Evaluate Multiple Opportunities

Whether you own the affiliate site or are looking to buy one here are 10 key questions including their weighting in order of importance(from my perspective) to help evaluate the potential opportunity.

  1. Product can be easily sourced
  2. Not a restricted product (weapon, ecig, liquor, uranium)
  3. Similar Private Label Product Selling on Amazon
  4. Website Focused on a specific product
  5. Price point of product $20min to $40+ ideal
  6. Target $3k/month minimum amazon associate income
  7. Product is small/light (not oversized & cheaper shipping)
  8. Traffic Growing
  9. Industry Growing (easy to check with Google Trends)
  10. Backlink Profile & Risk

question

B – How to get and analyze the data to estimate sales

In order to determine the size of an opportunity, there is some critical data that is needed.

The key question we are trying to answer with this step in the process is…

“How many sales of a similar product to the one we could source does this website drive per month?”

This is a key piece of the equation when working on the next step.

So here are the detailed step by step instructions.

  1. Get the data – Login to Amazon associates account, go to reports, click on download reports, select max relevant date range and all associate tags attached to one website, download report
  2. Slice the data up using some excel tricks – Open the spreadsheet in Excel, sort all the orders by the date, create a pivot table with (filter on for relevant categories, row label = names, values = sum of items shipped). This pivot table will now show you how much of every product the site has sold. The next step is to copy that pivot table into a new tab and paste it as text then filter on the quantity so you can see the number of each unit that has been shipped starting with the most.
  3. Group the data based on the type of product you could replace – Based on looking at this table make some assumptions on the number of a similar product

Simplified Example – Download the template at the bottom of this post

category

The result for this step is that we can say in our fake example that our website sells around 500 3D Printing Pens in the given time period (for the purposes of this example assume 1 month)

C – Assumptions to use based on my experience

Back when I first launched my affiliate site to FBA case study I shared several assumptions I made well before I knew if they would be true. Some held and some didn’t, however based on a very small sample size here are the assumptions I am using to evaluate a sites potential…

item

salessplit

 

TWO – Run the Numbers – What is The Potential Profit?

For this section we just punch the numbers we have collected into the summary tab on the spreadsheet and it provides a very rough approximation of what kind of volume and net profit the business is going to do.

YES – I know this is simplistic and there are many ways to get into more detail (which I do in the template) but when evaluating any potential opportunity this is great way to start!

product

So after this analysis a Printing Pen (no I didn’t check if any of these numbers were reasonable) would be able to generate an additional $4k/month net profit if the little affiliate site added an FBA arm to it.

THREE – Spreadsheet I use to do this analysis – Free Download (Completed for One Site)

To get the same template I used to do my analysis on this “fake” site for the post or many other potential acquisitions simply click on the link below…

Download Template

 

FOUR – What About Buying Both an FBA Business and Complimentary Affiliate Website

Slight Twist – Eric from DigitalStrats made the interesting suggestion that flipping the model would deal with a few of the downsides of my suggested model… meaning buy an FBA business and then add on acquiring Amazon Affiliate sites in the space. This would result in a much faster return on the investment since you would see the increase in earnings immediately. There are 3 main downsides to this model I currently see…

Upside:

  1. The time until you realize your return is higher… as soon as you point a related affiliate site at your FBA business you will see the benefit.
  2. If you can acquire both your probability of success for the overall investment goes up vs acquiring just one. This is mainly due to there being fewer unknowns that could derail the business.

Downside:

  1. Total investment required would be more substantial
  2. The ability to find complimentary affiliate sites and FBA sites all willing to sell is tricky
  3. The return on your investment is lower than if you completely added the FBA side potentially

 

Wrap Up

I hope me sharing this method and spreadsheet for quickly evaluating the potential is helpful to some of you. Although one of my recent migrations is not going as planned I still strongly believe in this model and am looking forward to continuing to

If you are doing anything cool in this space please let me know I always like connecting and learning.

About the Author Jon Haver

I am a 33 year old husband, father of 3, engineer and a huge fan of developing systems to build useful and profitable websites. The reason I build online businesses is to provide financial independence for my family and yours AND so I can spend time outside skiing and biking with my family.
Jon Haver, Online Entrepreneur

Leave a Comment:

8 comments
LIDIA says July 25, 2016

Hey Jon, great info. Question though: it is known that, FBA sellers are not allowed to be associated with Amazon as affiliates. Is there a work around? Thank you.

Reply
    Jon Haver says July 25, 2016

    Hi Lidia, thanks for the question. What is the basis for “it is known” based on what I have seen there are no issues with an associate account being used to drive traffic to your products (but I am very much open to being proven wrong). Thanks again for the comment.

    Reply
      Lidia says July 26, 2016

      Jon, you are absolutely wright and I am glad to admit that I was totally wrong !!! Thanks a lot ~

      Reply
philip says July 25, 2016

Hi Jon nice article with detailed info as always. With regards to the set up of the affiliate site are we talking about a review site with a possible top ten list and you make your own private label product no 1. Or are you talking about an affiliate site that has a stack of articles on a niche subject then ads leading to the private label product?

With regards to Lidia’s questions – you can use your own amazon associates account to sell your own FBA products but you must own the property e.g website, blog etc where you place the links.

Reply
Todd Connelly says July 25, 2016

Wow, some internal details that you give us is unbelievable. While you’ve made the jump into Amazon FBA arena, is this a good strategic move to diversify your income streams?

Also, is the time and effort more valuable with this type of site than strictly an affiliate?

It just seems like there’s alot of upfront money involved with the initial product acquisition.

Reply
    Jon Haver says July 26, 2016

    Hi Todd, glad you like the details. Tough to answer your question as far as the best use of my time but I do believe that this is a logical income diversification strategy for my business.

    Reply
Atta says August 3, 2016

Thank you for sharing your experience. I wanted to start Amazon affiliate marketing business long ago but was not sure where to start. This guide helped me understand the basics.

Reply
Amy says March 24, 2017

Hi Jon!
Great article, just looking for some advice.
I recently started a brand though FBA and with this I have a website and a pretty good following on social media for a newbie. However, it’s going to take a little while for me to build up the products I can offer. I am already using affiliate links to my products on my website and I am wondering whether to do the same for products that are not my own but fall in to my category. What’s your opinion on this? Do you think this will make my brand seem messy/ unclear or is this totally acceptable if it fit’s in with the niche? I suppose I’m wondering if it will in fact bulk my brand out a bit for the time being as I work on adding more products. Any thoughts?

Thanks in advance!

Reply
Add Your Reply