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This article is very timely as I was just thinking about margins given that I run a couple small websites that use Amazon Affiliate marketing. The margin on mo
by alexpotato 1y ago
This article is very timely as I was just thinking about margins given that I run a couple small websites that use Amazon Affiliate marketing.
The margin on most items is 4% (some lower, some higher e.g. luxury items are 10%).
4% is not terrible in and of itself.
But then you factor in:
- advertising costs
- conversion rates on clicks from the above
- taxes
and you get a real appreciation for how hard it must be to run high volume/low margin businesses.
Sure, you can do organic marketing etc but then you are just trading time for dollars.
- a5seo 1y ago> organic marketing etc but then you are just trading time for dollars. But the alternative, trading dollars for dollars, is essentially just arbitrage, which tends to disappear from competition. Organic marketing is the only sustainable source of alpha I’ve found in affiliate marketing.
- deleted 1y ago[deleted]
- k3liutZu 1y agoShouldn't you include the ad costs in your margin calculation?
- alexpotato 1y agoYeah, the 4% is really Gross Margin (although COGS here is effectively zero).