What is Passive Income?
Passive income is a type or form of income that is not for a labor trade, meaning it takes very little time to earn or maintain it. Finding creative investments either in real estate or businesses allows one to free up their time while still making a profit. In the past, many people believed that it was more financially attractive to invest in real estate, than small businesses. However, with Amazon FBA (Fulfilled By Amazon) business the model can earn ROIs or return on investment with less time spent on maintenance. This article shows the many reasons why one should consider investing in Amazon FBA businesses vs. real estate.
Amazon Business Vs Real Estate Investment: Which Takes More Time & Capital?
Amazon FBA Businesses come with some risks that could affect your ROI and/or passive income. These can include stockouts, meaning your item is out of stock, excess stock, theft, damage to the inventory, or Part of finding a good investment is figuring out how much time it will take for you to get an ROI. With Amazon FBA, sellers invest an amount of money they choose, sometimes less than a thousand dollars, and instead invest time. Time, energy, and research are the difference between success or failure in Amazon FBA business, as you want to identify which products are selling and then find how to market that product effectively. Sellers need a product that hasn’t been oversaturated in the market, can be sold year-round, and is inexpensive to make but can be sold for a higher profit.
With real estate, you need a fair amount of capital to invest, and you need to spend a lot of time finding the right property, researching neighborhoods, the best school systems, and the rent median in the area. Once you’ve done that you also have to maintain the house, find tenants and deal with any repairs that may arise. When it comes to comparing capital requirements, and time spent, Amazon FBA is the better investment.
Amazon FBA Businesses come with some risks that could affect your ROI and/or passive income. These can include stockouts, meaning your item is out of stock, excess stock, theft, damage to the inventory, or value loss of a product. The risks associated with real estate investments are poor location, a change in the neighborhood of investment property, high vacancies due to covid-19 or other unforeseen issues, and problem tenants.
Both of these investments do come with some risks, but because Amazon FBA requires a smaller amount of capital invested and more ability to diversify, it’s a safer investment than real estate. If you’re wondering how to sell on amazon without any financial risk, consider looking into Amazon dropshipping. This is where the “seller” doesn’t own the inventory, they simply post and advertise for a third-party merchant and take home the profits minus the cost of goods and shipping.
Overall if you’re looking for a way to increase your financial portfolio and begin to bring in some low risk, high ROI, minimal time commitment passive income, Amazon FBA business is the way to go.
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