When I decided my future was going to take advantage of the enormous technology advancements I was seeing every day, I searched hard for what I called ‘the vehicle”. I knew I didn’t want to strap on a suit and a tie every day, go to a big building, and hope my boss loved me at bonus-time.
I just didn’t know how to take advantage of what I just knew was a huge trend.
I recall vividly becoming enamored with info-products, SaaS businesses, and Amazon affiliate review sites. What’s not to like about zero incremental costs, recurring revenue, and piggy backing on the American consumers’ penchant to click on Amazon for 24 hours, respectively?
The Devil is in the Details
Every time I publish a piece I receive email from people who have come the same conclusion I had. They’re absolutely sure—like I was— that they’ve found their dream monetization method. I was no different until I networked a bit with people who were in these spaces.
Here’s what I found out.
- Creating info-products is hard work. Even if you do have something unique to offer the world, you need to get noticed—and that’s not easy. That goes double if it’s your passion. I know someone who’s now lost that passion because of the daily struggle to monetize their efforts.
- SaaS businesses are few and far between—with tons of dedicated buyers who get advanced notice of new listings. I also believe I’ll never know as much as the seller of a SaaS business, nor could I enhance the business or even fix a problem.
- Amazon is very sexy and they pay you for sales that don’t even relate to the content you publish. But keyword research is boring to me and really savvy Amazon sites use very sophisticated black or gray hat PBN strategies to succeed. Most people naively think all you need to do is write good content and you’ll magically make money, when nothing is farther from the truth.
When you really take a look at the big picture, you come to one very obvious conclusion: The 800- Pound Ecommerce Gorilla is selling physical goods.
Here are 3 reasons you should start your ecommerce investing career selling physical goods.
First, physical goods is an enormous market—something like $5T in 2016 alone. Online sales are growing at least a 15% clip. But this still only represents less than 7.5% of total physical goods sales. It doesn’t take genius to conclude this trend will continue.
Now I don’t want to be Jeff Bezos, but one 1/100th of 1% of his net worth is like $10MM. Better yet, I have developed a strategy to get my fair share of this expanding pie and it isn’t really rocket science.
Second, selling physical goods seem intuitive to me, sort of like real estate. I bet most people reading this could parachute into a new city and quickly discern value for their demographic. The same holds true when you look at sites selling physical goods. The products, the presentation, the customer service, and the value proposition are all pretty easy to recognize for moat people.
Find some smart mentors and you can learn a few tricks to make it even easier.
By way of example, I showed my Millennial daughter what an expiring coupon code and perceived scarcity are all about when she wanted to buy her last Tumi suitcase. I showed her how to use Google Shopping to find it cheaper and abundantly available. At least for a moment she even thought I was cool!
Third, the skills you learn selling physical goods will help you if you want to branch out to other strategies later. SEO, paid advertising, and technology experience are all invaluable competencies. You can easily leverage them should you decide on a different monetization method later.
But you can truly excel using these skills in a physical goods niche today given the sheer size and sophistication of this market.
The Trend is Your Friend
I’ve written before that the ecommerce world is a little like the wild west right now. This won’t hold true forever, but it’s certainly the case now. Use your skills to your maximum advantage by cutting your teeth selling physical goods.
As a professional wealth manager for over three dozen years, I can tell you the easiest way to make money in the stock market is to get the big trends right. Warren Buffet often refers to all of the boats being lifted by a rising tide.
Today one very big trend is betting that the $5T market in the United States selling physical goods will continue to go online. Amazon has already trained consumers to shop online, but they have also set the customer service expectations very high. So providing excellent advice, ample product selection, and terrific order fulfillment must be part of a strategy to succeed.
As a wealth manager I’m always skeptical of people promoting strategies to make “easy money”. In my last post I spelled out many of our struggles on the way to our modest success so far. I always try to be balanced and describe the ups and downs of our ecommerce journey so you can be mentally prepared.
But there is no ‘easy money”, especially when you begin.
The point is that once you start and work through the inevitable problems for a while, it gets easier over time. This only requires taking action and persisting, not super-human intellect or technology know-how.
So, surround yourself with like-minded individuals, choose a mentor, and get started by selling physical goods. Then stick with it and make improvements daily.
It’s not “easy money”, but it sure beats the suit and tie daily grind. It’s also exciting to be involved in the very early stages of a huge and exciting trend. The rewards aren’t bad either.