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League of Ecom

HYBRID AUTOMATION

Includes Six Revenue Streams On Amazon, Walmart and eBay

League of Ecom

DROPSHIPPING AUTOMATION

Only Pay For A Product AFTER You Sell It

League of Ecom

FBA- Fulfillment By AMAZON

Wholesale Business With Prime Shipping

Not Sure Which Program Is Best For You? Compare Both Fulfillment Models Below

DROPSHIPPING

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Must have $25,000 in credit available or have a minimum credit score of 710 to qualify

When you sell a product on Amazon, the revenue generated from the sale is not immediately deposited into your bank account. Amazon holds your funds inside of your Amazon Account until the product has been delivered AND a couple days have passed. This allows Amazon customers time to raise any concerns if your product is counterfeit or if they received a box full of rocks. 

Once a few days pass with no red flags raised, Amazon will pay you. This is why credit is important in this business model. You need to be have enough credit to sustain sales from the day we order a product to the day it delivers, plus a few more days. We exclusively use USA-based distributors so all your products will have same day or one day shipping.  

If you have a good credit score or a lot of available credit you don’t currently use, then this program would be the most beneficial for you. 

To operate a Dropshipping business, we require a minimum of $25,000 in lines of credit (American Express, Visa, Mastercard, etc) to cover product cost. Since we only order products AFTER they have sold, each purchase on your credit card is guaranteed ROI. 

The more credit you have available, the higher we can scale your business. 

*This does not include initial start-up cost

In almost all cases, only products fulfilled by Amazon themselves have Prime Shipping. Since Dropshipping products are shipped from a third party distributor, dropshipping products are not eligible for Prime Shipping.

The ability to sell Prime products is a deal-breaker for many clients which is why they opt into our FBA Program instead of Dropshipping

Dropshipping stores are easier to scale compared to FBA stores due to the simplicity of the business model. FBA requires shipping to warehouses and waiting for shipping times while Dropshipping only requires us to conduct analytics and list profitable products. 

The downside of having a supplier handle 100% of your fulfillment is you don't have control over your inventory or inventory levels which opens up risk for selling products which are out of stock, shipment delays, etc.  

Although you can achieve a higher revenue in this business model, you do have a smaller ROI compared to FBA.

Dropshipping is no doubt the SAFEST way to scale an Amazon business when it comes to operating risk. We never buy inventory in this model so if we hypothetically listed 10,000 products on your store and only 5000 sell, there is no loss. Even if none sell, there is still no loss. It does not cost money to list products and since we aren't holding inventory in our own warehouse or Amazon's warehouse, there is no storage fees or any other associated fees

There are many key aspects in this fulfillment model where we rely on third-party companies. The distributors we open contracts with house the inventory in their warehouses and we rely on their stock updates to ensure we only sell products which are in stock.

We rely on distributors to ship products on time and ensure packages are picked up by carriers, products are not damaged, etc. 

These distributors are large, professional corporations in the USA, however mistakes do happen and when they do, Amazon will look to us for answers since we are the ones operating the Amazon account, not the distributor. With many factors out of our control, this model is more prone to minor problems such as products delivering late, damaged goods, etc. Rest assured, we are in constant communication with distributors and customers to prevent any of these issues and take a pro-active approach to your ensure your business scales smoothly.

FBA

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In recent months, we have seen a large surge of investors new to e-commerce under the impression they can run an FBA business using a credit card, line of credit, etc. What's worse is we've seen other agencies continue to feed these lies to investors and once the business starts, it comes crumbling down quickly. We wrote a blog on using credit for FBA and why it's a very bad decision to do so. The full article can be found in the "News" section of our website. For your convenience, a summary is below:

From the moment you pay for a product, it can take up to 15 days for it to reach Amazon's fulfillment center and be active for sales. It is impossible to sell out of all FBA inventory, have each order deliver, wait a few days to receive the payout from Amazon, and pay off a credit card bill all in the remaining 15 days until your statement is due. 

The average Inventory Cycle is about 6-8 weeks. From the moment you pay for inventory, you should expect to fully realize the ROI within 30 days of the product reaching an Amazon fulfillment center (estimating a 30 day sellout time, plus 1-2 weeks to receive the last payment).

You do NOT want to pay interest on a Wholesale Purchase which is why FBA is a cash based program. You will pay for inventory by sending wire transfers directly to brands. 

Rare exceptions to this are outlined in the article.

To scale an FBA business, we require a minimum of $20,000 in operating cash, however we aren’t starting the business off with a $20,000 inventory purchase.

First, we need to verify analytics to make sure we have accurate sell out times, then start to scale. The first few months we are ordering a large variety of small batches of products. Every store gets at least a dozen products to start. Larger stores can get up to 2-3 dozen products

Once we verify analytics with these small batches, we can test more products and repurchase previous inventory in larger quantities. At the end of every inventory cycle, we are reinvesting that capital back into the business to reorder inventory so the store can grow organically.

Below is your estimated inventory spend per month during each phase of your business. Remember you can reinvest capital from previous months back into your business:

Operating Budget

Months 1-3: $5000 Minimum

Months 4-6: $10,000 Minimum

Months 7-9: $20,000 Minimum

*This does not include initial start-up cost

In almost all cases, only products fulfilled by Amazon themselves have Prime Shipping. In FBA, we are ordering products wholesale and delivering them to an Amazon facility to Amazon can fulfill each order, hence the name FBA (Fulfilled By Amazon). All products sold in this program are eligible for Prime shipping.

FBA is a bit slower to scale compared to dropshipping due to the nature of a wholesale business model. We need to wait for shipments to deliver to the proper warehouse, product prep, and Amazon must process the inventory before its active for sale.

The plus side of this is we get a larger ROI as mentioned below, but it also becomes a more stable business compared to dropshipping. Since we have guaranteed inventory, it's impossible to sell "out of stock" products and since Amazon is handling 100% of fulfillment, they take full responsibility if products are damaged in transit, delivered to the wrong address, etc. You don't get the same protections in dropshipping as you do with FBA.

When you purchase inventory, you take on inventory risk. There is no way around it, however we can mitigate this risk in multiple ways.

  1. Contract Terms: Each contract we open for your business includes clauses which allow is to either return products, sell to brick and mortar locations, liquidate on other marketplaces, sell to other Amazon sellers, and more. We never have clients sit on inventory that doesn't sell. 
  2. 30 Day Sell Out Time: At no point in time will your business have more than 30 days worth of stock. By limiting inventory to 30 days worth, we can easily adjust and scale up or scale down products as needed.
  3.  Each product has over 24 points of analytics we review to ensure we mitigate risk as much as possible. These analytics are shared with you inside of the Client Portal before every purchase.

FBA is the most stable form of fulfillment. We are purchasing a set amount of inventory and this inventory is counted and logged upon shipment from the distributor, entrance into our facility (if product prep is needed), leaving our facility (if product prep is needed), and Amazon does a final inventory count before making the listing active. 

It is impossible to oversell inventory or not have enough stock for orders. Returns and customers service are handled 100% by Amazon. If your customer has any issues, they will be instructed to contact Amazon Customer Support directly. With Amazon handling this part of the business, it creates stability in the model and makes it sustainable long term. 

HYBRID AUTOMATION

  • Featured In USA Today
  • Dropshipping And FBA Combined On 1 Store
  • Duplicate Your Store On Amazon, Walmart, And Ebay
  • Only E-commerce Program With Six Revenue Streams
  • Hedges Your Risk By Diversifying Business Models And Platforms
  • Aged Amazon Businesses Upgrade Available 

FBA COACHING

So Much More Than Just Another Amazon Coaching Program.

If you want to start your own Amazon business but don’t know how, don’t worry! FBA Coaching will get you up to speed on all things Amazon.

FBA Coaching does more than just teach you how to build an FBA (Fulfillment By Amazon) business from scratch and find suppliers based in the USA. We don’t just teach you how to become successful, we are there to help every step of the way. As a League Of Ecom Student, you get access to all of the following:

  • Warehouse Network
  • Accounting Team
  • Website Development Team
  • Starter Distributor Contract Library
  • Support From An Account Executive Seven Days A Week
Our staff will help you fill out distributor applications, set up your corporation with the proper licencing, and take care of your license filings. You’re one button away from Financial Freedom. Join Today.