Airbnb VS. Amazon FBA VS. Dropshipping

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What's up guys? It's James here. And in today's video, I want to talk to you about a topic that I think a lot of people are asking more and more now, which is, you know, what kind of business should I start up? I want to start my own business, you know, people say, I want more freedom, I want to have control over my time, I want to be able to earn a good income, you know, get to 510 $1,000 a month. What should I pursue? Which direction should I go? You know, there's a lot of people talking about Amazon FBA, there's a lot of people talking about drop shipping these different business models. And obviously, Airbnb is one one option to consider as well, you know, and what are the pros and cons of each of them.

Now, obviously, I'm a little bit biased when it comes to this. I think Airbnb management is an absolutely incredible business to start up. And I think that there's some huge advantages over the other examples that I mentioned, like Amazon FBA or drop shipping. But I just want to talk about that more in this video and talk about what I see as being some of the absolutely massive advantages with Airbnb management, that will allow you to grow the business a lot more quickly than some of these other business models out there.

Now, before we dive into it, and go into all the detail, I just want to remind you guys that in the description down below, there's a link to a free training that's going to walk you through step by step by step exactly how to earn a full time income managing other people's properties on Airbnb, the train is going to go through exactly how you can get started, without any experience without any know how when it comes to Airbnb, and without putting any capital into buying, renting furnishing any properties. So just go ahead and click the link down in the description down below. To check out that free training, I highly, highly, highly recommend it. It's a new free training we put together that I highly recommend it's going to go into everything in great detail. And we're going to give you some free tools like our properly projection tool, just just for joining and checking out that free training. So that's hopefully going to help you to get started even more. So again, just check out the link in description down below.

And with that being said, let's go ahead and dive right in. And that actually segues in pretty nicely. You'll notice one of the things I mentioned about that free training is we teach you how to get started without investing any money into buying renting furnishing any properties, you're not putting out money to get the business started. Now, that is a big advantage over a business model. Like for example, Amazon FBA, Amazon FBA for any of you who don't know his business model where you base gets fulfilled by Amazon Fulfillment by Amazon. And so you basically ship inventory for whatever product over to their warehouses, and they take care of the fulfillment.

And so you can sell them through Amazon, you can sell those products through Amazon on their marketplace. But the challenge with that, obviously, it's really nice, there's some great advantages with everything they build. Amazon has made it incredibly easy for sellers to be successful. But there are a ton of challenges. It's getting very, very competitive on Amazon, as I'm sure you can imagine. And beyond that, you need to have a whole bunch of money upfront, to invest into getting inventory to then send to Amazon's warehouses. So that's a huge capital outlay upfront, and then you're relying on the business's success and the profit to repay that initial investment, a lot of risk involved there. challenging to grow the business.

A lot of people I've spoken to have successful Amazon FBA businesses explained to me that Yeah, you know, the business is doing really well, we're making a lot of profit, but I myself am still pretty cash poor, because if I want to grow the business, I have to keep reinvesting my profit into buying more inventory, expanding my product line, getting more product at Amazon's warehouse, I can sell it. So you know, I can't really actually afford to pay myself because every dollar that I paid myself is $1, then taking out of a business that needs that money in order to grow in order to keep being successful.

So that is a downside in my books as far as a lifestyle business. Now, I see a lot of merit to that, you know, you have to be investing into your business, depending on the business model. And it makes sense. I'm not saying that's a bad strategy. I'm just saying that for a lifestyle business, if your goal is to have freedom over your time control over your time, you know, really use this as a lifestyle, business, travel, enjoy your life, then it's not really going to be conducive to that if you constantly have to be sacrificing on paying yourself, you're going to lose that financial freedom individually, so that you can pay your company and reinvest into your company.

Again, not saying it's a bad strategy, just saying that it doesn't lend itself very well to a lifestyle business. It's not going to really support the lifestyle of traveling, investing your money elsewhere outside of your of your business, diversifying your investments, and just overall paying yourself a reasonable amount of money because again, every dollar you pay yourself takes away from the business's growth potential. So that's a challenge with Amazon FBA. And that's one of the big reasons that I see Airbnb management and specifically avoiding rental arbitrage. And going with rental management where you're collecting a percentage management fee on every property as being a huge, huge upside.

That's a huge advantage that you have right out of the gate, because with management with a management fee model, we actually get to earn money we're earning, like I've talked about in other videos, and like we talked about in the free training in the description there, we can actually earn a couple 100, even 1000 2000 $3,000, right up front when we bring the property on board under management. So now, rather than having to invest money, put our own money or our profit back into the business in order to grow it and keep on expanding and growing our business, we can actually earn money and feed more profit into our business and into our own pockets when we bring on properties and grow the business.

So huge advantage there. Now, the other thing that's really nice that has a leg up on, when you compare it to Shopify drop shipping, or you compare it to Amazon FBA is that recurring monthly income, the really great thing about managing properties on Airbnb is you can do you can get to $10,000 a month with just a few clients. Because all you need is a couple of clients that are getting you consistent, recurring monthly income, in order to hit your your profit goals for yourself personally for your business, it doesn't really take much because all it takes is maybe five or 10 people saying yes to you.

Whereas with Amazon with dropshipping, you're relying on large numbers need to be mass market, because the dollar value is so small, and the profit margin you get on that is even smaller. So each transaction is a lot smaller, the profit on each transaction is a lot smaller. So even if we set aside the capital the app to reinvest back in the business to grow it, it just takes a lot more volume in order to hit your goals. And it's a lot less consistent, because you're not getting recurring monthly income. These are one time purchases, one time transactions. So that's the challenge I see with those businesses that you know, on the one hand, you have to get a lot more customers in order to succeed. Whereas with this business with area management, you really only need five or 10 customers in order to get to a full time income.

The other thing is that you just have a lot less security with whether it's Amazon FBA or drop shipping. Because you are not there's no recurring monthly income, you don't have that security, that stability, and there's no real predictability, you can't look six months out into the future and know how each one of your products is going to perform, you can make a guess, but it's not really going to be backed by anything. Whereas if we have five properties under management, we can say reasonably that at the lowest point, we're going to have these five properties six months from now good, chances are we're going to grow beyond that. But if we want to say super conservative, even if we don't grow the business, we're still gonna have this much income coming in.

So that's a really nice aspect as well. Now, the other challenging component about this with Amazon FBA or with drop shipping is that you're competing heavily, there's a ton of competition going on. And it's really a race to the bottom. And you're really competing against some very big and powerful players with Amazon FBA, you're competing against Amazon itself. Realistically, Amazon is going in there, they're taking your data as a seller, everybody knows this. And they're figuring out which products they want to expand to offering themselves and how to make sure they optimize and can ultimately wipe you out, you know, as as not nice as it is to say, ultimately, their goal is to be a profitable company.

And so they do want to support their sellers on their platform. But they also want to take some more of the pie where they can. So that's a challenging aspect with Amazon FBA. And then with drop shipping, you're also competing with everyone else who might be selling a similar product and Amazon was more accessible than your product. For a lot of people who are drop shipping, where you're dealing with really long shipping times because the products are coming direct from China to the customer, that's going to be a challenge, because oftentimes, those same customers can go onto a site like Amazon, for example, and get the same product for a relatively similar price and a way shorter shipping time. And ultimately, as buyers become more and more sophisticated over time, they're going to realize that they can go to sites like AliExpress and get the thing that they're buying from you for a fraction of the price in the exact same amount of shipping time.

So that's a really kind of fundamental flaw, there's just less and less value that you as a drop shipper are actually adding into the equation. There's no real massive value creation that you really add into the into the the customers purchase. And so you're places a lot more fragile in that ecosystem, there's a lot more competition happening. But also, you're just not adding massive value to people. with Amazon FBA, you are adding more value to people for sure. Because you're putting that inventory in front of them in a way that Amazon can then ship it to them. And everybody knows Amazon's got like the greatest shipping in the entire world and their greatest fulfillment systems the entire world.

So there's more to argue for there. Whereas when you're not really serving your clients that well adding a tremendous amount of value with drop shipping. That's just in my mind a lot more fragile of a business. And I've seen that go pretty poorly for some people, not again, I'm not saying it can't work. Well. I'm not saying it's a terrible business model. I'm just saying that there are inherent flaws with it and things that you want to be mindful of you go that route.

Now, if you don't want to subject yourself to a whole bunch of competition from really big players, if you don't want to subject yourself to, you know, the fragility of that comes along with not really adding a tremendous amount of value into the equation, then Airbnb manager on the other side, is really the Curtis county antithesis to both of those things. If you look at it, you know, who are you competing against? Well, the majority of the market is made up by hosts that are hosting their own property. And they're the people that we're trying to serve, they're not doing a really good job.

That's the majority of your competition when it comes to getting guests and they really don't know what they're doing. So we're competing with amateurs, as opposed to competing with these professional multi billion or trillion dollar companies that really know what they're doing and how their systems dialed in. So there's very, very little competition in this space right now. And the competition we do have, it's very easy, quite frankly, to run circles around them with the right systems, like we talked about in our training programs, like we brought in the free training is linked down below. So there's a really big difference there. And then the other one, in my opinion, probably the biggest difference between these different types of businesses is just the value that you're creating. I think as a long term play, Airbnb management is pretty irrefutably a better business model, because long term businesses that succeed are going to be the ones that provide the most value to their clients.

Now with drop shipping, I think it is quite different. I wouldn't paint with the same brush as a paint Amazon FBA in my mind, drop shipping, there's just a little bit less value being created for your clients. But in contrast, think about the value that we're creating for our clients with Airbnb management. For each individual client, we're just creating so much more value, that's why we get paid so much more per client were with one client on drop shipping or FBA, you might make a couple dollars, with one client on Airbnb management, you're making 1000s of dollars over the lifetime of that agreement, 10s of 1000s of dollars, even, they're sticking around with you for a lot longer, you're getting that recurring monthly income from them, because you're providing massive value, helping them to save time, which is something that we all value tremendously.

So one resource we can't get more of unless we buy it back by freeing up that time by hiring someone like a property manager to take care of the day to day aspects of running our property. So that's a huge value of being able to give that person their time back. The other thing we're doing is helping them to earn more money from their property, because we're going to help them remember to improve the performance of their listing, which makes us more money in management fees and makes them more money as a property owner, that's a really big win for them. So there's a huge amount of value that's being added to the equation by us as property managers, and not is what makes our business a whole lot more secure.

So, again, I don't want you to take this as me bashing on Amazon FBA or on drop shipping, I have a number of friends and people I know in my network who do incredibly well with those different business models, I'm not saying it can't be done, I'm just presenting some of the pros and cons that you need to take in mind and take into account when you're starting a new business. In my opinion, one of the best businesses to start as a new person starting out wanting to run your own business, you want to build something that's sustainable, you want to build something that gets you a ton of happy clients that generate really great monthly income with minimal stress. And that supports a really great lifestyle business. Really, there aren't many, much better than Amazon, or drop shipping. But when you look at Airbnb management, it really does a fantastic job of meeting those criteria even better than those already great business models.

So I think that Airbnb management is definitely the way that I would go if I were starting out again, I absolutely love the business model for all the reasons that I discussed in this video along with a whole bunch of other ones. Really, there's just no beating it when it comes to creating a business that gives you the lifestyle that you want. That gives you the freedom over your time that you want. That creates incredible value for clients that has a ton of security baked right into the way that business operates. It's just got a ton of great advantages working in its favor. That's my take on it. If you have thoughts that differ from that you have questions about that. You just really want anything else you want to share, just pop it into the comment section down below, I'd be happy to hear from you.

And again, just check out the link in the description down below for that free training that's gonna walk you through step by step by step how to build this business. If after watching this, you decide, hey, you actually want to get started or at least learn how you might go about getting started managing other people's properties on Airbnb. There's a link in the description down below to that free training is going to walk you through everything step by step, give you some free tools to help you get started. So I hope that helps you and until next time, I'll see you next video.