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Amazon FBA - Violation of the Commandment of Control

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What are your views on Amazon FBA violating the Commandment of Control?


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Igormartins

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Jun 21, 2020
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Hey, everyone!

My name is Igor, I am 17 years old and come from São Paulo, Brazil.

I have been reading The Millionaire Fastlane (I am on chapter 31 now). As I was reading chapter 30 (The Commandment of Control), I realised that the business I was interested in pursuing (Amazon FBA), I realised that this model violates the first Fastlane Commandment, and therefore investing in such business could be a hitchhiking move.

Therefore, what I wanted to ask you guys is: What are your views on Amazon FBA violating the Commandment of Control? In your opinion, could Amazon be used as leverage for building a client base, and then later moving my sales to my own website (which I would control)?

I am looking forward to seeing your thoughts on this!
 

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Defection

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It's not Fastlane, and Amazon proved to the Affiliate market that they still hold the reins recently, by slashing most of their category commissions by half.

Jeff Bezos is absolutely ruthless, and he knows how much people depend on Amazon. What's to stop him testing the waters with hugely inflated FBA fees tomorrow?

I think you need to read further into the book. Selling on Amazon isn't a bad idea, just make sure that you are also selling outside of Amazon at the same time.

MJ still sells his books on Amazon, but he also has various other methods when it comes to sales, so he hasn't put all of his eggs into Amazon's basket.
 

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This is mental masturbation.
 

RazorCut

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This is mental masturbation.
I disagree. He’s 17 years old and identifies selling via Amazon FBA with not having control over your business so is trying to fathom out whether he should pursue it or not.

It’s a legitimate question wouldn’t you say?

Welcome Igor. Personally having sold on Amazon with and without FBA services I wouldn’t go back. Not only are you competing with other sellers (who will often use underhand tactics to sabotage your listings) you are also competing direct with the might of Amazon themselves.

I’ve built a product to high sales (number
1 in their category) only for Amazon to source the product directly from my supplier and latch on to my listing and undercut me.

They constantly trawl their databases for top selling products they can acquire and benefit from all your hard work. They are not the ‘business partner’ they would like you to believe, but probably your biggest competitor if you are not careful.
 

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It absolutely violates ALL ASPECTS of the commandment of control. It doesn't mean DON'T use it, but be mindful of the fact that if your entire future was based on Amazon, it can end over night.

It has happened so many ways, so many times, that it is almost not worth dredging up. But yes, there is zero aspect of control if you have an Amazon ONLY business.

It was possible years ago, but even then it still violated the commandment of control.

I own several brands on Amazon, and lately Amazon repressed some in search results even for unique to me terms and brand search simply because they weren't being flanked by advertising campaigns.

If you have a bigger brand strategy, Amazon is VITAL. $1 out of every $2 in the USA in eCommerce is spent on Amazon. They're a necessary evil, but your suspicion is correct.

There is 0% doubt that they violate the fundamental commandment of control as written in the Millionaire Fastlane book.
 

OwenD

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I'd also add - don't just join Amazon FBA because of a few videos you saw on YouTube.

So many of the videos on YouTube make Amazon FBA appear like an easy way to make money... You're only seeing the videos that are either advertised, or have tons of views (because they claim to have made A LOT of money).

Now i'm not saying that that's the reason you want to try Amazon FBA, but just be aware. It's too easy to get wrapped up in these so called get rich quick schemes.
 

juresesko

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Hello!
It's a common question here and answers are usually all negative once you get your eyes of Youtube.
Look at it from this perspective, all of Youtubers that teach you how to make an amazon fba or dropshippin biz make money from views on his videos.
Why do you think there are so many of them?

I thought the same, yeahhh I'll just order some garlic presses and spatulas from alibaba sell them and make millions.

Problems:
  • no control on amazon
  • no control on production if manufacturer stops walkin you stop walkin
  • and the biggest one no one mentioned yet, you don't get a chance to make your product better without starting from the beginning
Why not just make something better in the first place.
Why sell on amazon when you can let them buy your company (Ring $1 billion)

But hell if you don't have any idea on what to do, try it, order low amounts and see for yourself.

If it looks to good to be true then it probably is.
 

biophase

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Hey, everyone!

My name is Igor, I am 17 years old and come from São Paulo, Brazil.

I have been reading The Millionaire Fastlane (I am on chapter 31 now). As I was reading chapter 30 (The Commandment of Control), I realised that the business I was interested in pursuing (Amazon FBA), I realised that this model violates the first Fastlane Commandment, and therefore investing in such business could be a hitchhiking move.

Therefore, what I wanted to ask you guys is: What are your views on Amazon FBA violating the Commandment of Control? In your opinion, could Amazon be used as leverage for building a client base, and then later moving my sales to my own website (which I would control)?

I am looking forward to seeing your thoughts on this!
You can only control so much of your business. What you have to decide is how much risk is there in your "controlled" environment.

You could look at Amazon and say you don't have any control.
You could look at your own website and say that you don't have control of the search engine rankings.
You could look at your product and say you don't have control of your factory.
You could look at your social media and say you don't have control of Facebook or Instagram.
Nothing is going to be 100% control fee.
Look at restaurants and the corona virus. I doubt these owners ever thought about a government shutdown as a control issue.

The question is are you willing to accept these limitations of control in your business.

To answer your question, I think and know that Amazon could absolutely be leveraged into building a bigger off Amazon company.

I think the bigger question that you need to be asking is, how will you fend off the competition on Amazon. Competition meaning, people competing by lower price, people competing by copying your product or listing and even amazon copying you.
 

Reign777

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Jun 24, 2020
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Wow so much knowledge, i have just joined the forum today and this is exactly the answers i was looking for. Upon finishing the book i also realized that Amazon broke the laws of control and entry, anyone with a couple $1000 can contact suppliers on Alibaba and start doing what you're doing. A week ago i ordered my first couple of products because i thought Amazon FBA was a viable option for passive income after reading books and watching countless Youtube videos i thought it was time and this was my best path.

while reading TMF i have to be honest i was frustrated and as i type i have just cancelled my order and closed my FBA account.

I have many business ideas and my perspective has changed after the book, getting started or knowing how to start have always been the challenge. i have ordered UNSCRIPTED and soon hope to find my way as well.

Thank You all for the Honest incite!
 

RazorCut

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As @biophase states every business has risks both seen and unseen (such as the ones we currently face). So it boils down to accepted risks.

Most people will say if you are selling physical products then Amazon (and arguably eBay) should be part of your sales channels.

You could of course look to wholesale. Or you could invent a product and partner up with a company in your niche that already are strong in that market with Their own manufacturing, distribution and sales and let them do all the hard lifting in return for a royalty.

The fact is getting into bed with Amazon, eBay, YouTube etc. gives you far less control than having your own website and selling using SEO, Social Media, email marketing and Google Ads. The issue with Amazon is the shear volume of sales it can produce for you if you manage to get your products in front of enough people.

But with Amazon know that if you have 500 products listed the competition are going to ignore everything but the ones that make you the most money. And they are going to attempt steal those sales from you and Amazon won’t give a flying f*ck because they get their commission regardless of who makes that sale.
 

Antti

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The fact is getting into bed with Amazon, eBay, YouTube etc. gives you far less control than having your own website and selling using SEO, Social Media, email marketing and Google Ads.
I'm not sure if selling just on your own website and relying on Google or social media is any safer than Amazon. Many businesses were wiped out basically overnight because of the Google algorithm updates a few years ago. It could happen again any day. If you rely on Google Ads, what do you do if more competition comes along and cpc goes up and you are not profitable anymore? I don't know much about social media marketing but I'm sure in this current environment there are pitfalls there too. A responsive email list would be great, wish I had one. Maybe the key is to try to implement as many of these channels in your business as possible and also try to grow a brand following that is not dependant on any single platform.

If you sell physical products, you can't really escape Amazon even if you don't sell there. Unless you sell something really cheap people are going to shop around and almost always check Amazon too. If you are not there but your competitor is, you are going to lose a lot of sales because many people simply prefer doing their shopping on Amazon. IMO for most businesses selling physical products it would be foolish to not sell on Amazon. It is the worlds largest marketplace after all. Huge amount of traffic and the conversion rates are on another level compared to independent sites.

Of course it's good to diversify and also open your Shopify store but what I have heard from most sellers in that situation is that they get something like 70-90% of sales from Amazon and the rest from their own site. But still of course the 10-30% is better than nothing in case something happens with Amazon.
 

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Reign777

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I'm not sure if selling just on your own website and relying on Google or social media is any safer than Amazon. Many businesses were wiped out basically overnight because of the Google algorithm updates a few years ago. It could happen again any day. If you rely on Google Ads, what do you do if more competition comes along and cpc goes up and you are not profitable anymore? I don't know much about social media marketing but I'm sure in this current environment there are pitfalls there too. A responsive email list would be great, wish I had one. Maybe the key is to try to implement as many of these channels in your business as possible and also try to grow a brand following that is not dependant on any single platform.

If you sell physical products, you can't really escape Amazon even if you don't sell there. Unless you sell something really cheap people are going to shop around and almost always check Amazon too. If you are not there but your competitor is, you are going to lose a lot of sales because many people simply prefer doing their shopping on Amazon. IMO for most businesses selling physical products it would be foolish to not sell on Amazon. It is the worlds largest marketplace after all. Huge amount of traffic and the conversion rates are on another level compared to independent sites.

Of course it's good to diversify and also open your Shopify store but what I have heard from most sellers in that situation is that they get something like 70-90% of sales from Amazon and the rest from their own site. But still of course the 10-30% is better than nothing in case something happens with Amazon.
Absolutely agree but I think theres a difference between having your own Products and selling products from China which anyone has access too. If you sell your own products you still have control and entry in your favor, Rather than joining the crowd and selling products from Alibaba
 

MJ DeMarco

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Amazon is a channel, a powerful one. Why not use it?

If your only customer is Amazon, then yes, you're gambling.

But sometimes you can gamble for 5 or 10 years and get out with gold before the tide turns.
 

Reign777

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Jun 24, 2020
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Amazon is a channel, a powerful one. Why not use it?

If your only customer is Amazon, then yes, you're gambling.

But sometimes you can gamble for 5 or 10 years and get out with gold before the tide turns.
Wouldn’t using it to sell your own products be more profitable than selling stuff on Alibaba?
 

biophase

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Wouldn’t using it to sell your own products be more profitable than selling stuff on Alibaba?
What do you mean by that exactly? We are all technically selling our own products. You buy them in bulk from a manufacturer on alibaba and they become yours.

The distinction is, is your product any different in any way? But even if it is, it can get copied by another factory.

So, basically almost all products, even your own design will eventually be "stuff on alibaba".
 

Reign777

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What do you mean by that exactly? We are all technically selling our own products. You buy them in bulk from a manufacturer on alibaba and they become yours.

The distinction is, is your product any different in any way? But even if it is, it can get copied by another factory.

So, basically almost all products, even your own design will eventually be "stuff on alibaba".
True but I’ve heard and tried selling on Shopify and Amazon, Amazon has way to much control Over you like everyone says it’s risking even after building a successful seller account they could either shut you down or undercut you and sell the things you’re selling better than you.
 

juresesko

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What do you mean by that exactly? We are all technically selling our own products. You buy them in bulk from a manufacturer on alibaba and they become yours.

The distinction is, is your product any different in any way? But even if it is, it can get copied by another factory.

So, basically almost all products, even your own design will eventually be "stuff on alibaba".
I'm finding hard to understand your opinion about this.
There are a lot of different products on alibaba. And the ones that are showcased on youtube are pretty much useless.
I wonder what kind of stuff is reliable to sell?
Just as I'm writing this I'm getting ads from alibaba for "digital price tags" Digital Price Tag
Something like that seems a little bit more logical to sell but when you look at youtube the only stuff you find is flexible selfie stick, crystal rollers and back posture strands.
 

Kid

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The problem and the solution:

Amazon can wipe out your business in few seconds.
The real problem is that you build business on Amazon
and spend all profit (whether reinvest or spend on pleasures).

When Amazon ban hammer comes you're left with nothing.

Solution is- accumulate profits.
Don't spend. Don't reinvest all.
If Amazon will decide that your product is no fit for them,
you have cash to start something else.
Simple.
 

biophase

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I'm finding hard to understand your opinion about this.
There are a lot of different products on alibaba. And the ones that are showcased on youtube are pretty much useless.
I wonder what kind of stuff is reliable to sell?
Just as I'm writing this I'm getting ads from alibaba for "digital price tags" Digital Price Tag
Something like that seems a little bit more logical to sell but when you look at youtube the only stuff you find is flexible selfie stick, crystal rollers and back posture strands.
What I mean is that whether you sell on Amazon or your own store. Your product, unless it is something radically different and/or patented will end up on alibaba eventually.

Let's say you design a new wallet that is neon orange. This wallet cannot be found on alibaba. You have a factory make you a neon orange wallet exclusive to you.

Then you sell on Amazon and it is doing $10,000 a day. Or you sell on your own store and use FB ads to drive traffic and it's selling $10,000 a day.

Well now the FB ads people and the Amazon jungle scout people have caught on that neon orange wallets are where the money is at.

So, they now go to a different wallet factory in China and ask them to make neon orange wallets. Eventually, every factory on alibaba is offering neon orange wallets.

But, what if you had a patent on your wallet? Well, they can make neon yellow or neon green wallets. Or they make a neon orange-ish wallet close to yours, but just outside your patent.

So what started as your "own special" product is now just an "alibaba" product.

FYI, even I as type the above, I'm being a little bit hypocritical because I'm going to be jumping into the other side of Amazon. But it is because of this insight, that I also know what will happen to your products on Amazon if you don't build up your brand loyalty.

I started a new business 3 months ago. I've never done it this way so this will be my first attempt. I'm doing a 100% amazon business, no branding, no website, just straight competing on price. I'm going to be one of those price competitors scraping the bottom of the barrel.

The reason I'm doing it this way is because I don't have time to build another brand and I see a hole in the market. I don't want to do another shopify site and grow another FB or IG account. But I do see a spot where I can compete with even with straight from China listings.

My goal is to make $1 per sale and 1000 units a day, $1000 a day profit or $365,000 a year and sell for $1,000,000 within 3-4 years.
 
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Ronak

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Amazon is a channel, a powerful one. Why not use it?

If your only customer is Amazon, then yes, you're gambling.

But sometimes you can gamble for 5 or 10 years and get out with gold before the tide turns.
Nowadays that window has been compressed probably down to a few months to a year tops on all low/no barrier opportunities like amazon with the proliferation of "opportunity chasers" on all the online media channels.
 

Walter Hay

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I think you need to read further into the book. Selling on Amazon isn't a bad idea, just make sure that you are also selling outside of Amazon at the same time.
I have posted numerous times that if you are going to sell on Amazon you should at the same time have your own eCommerce site.

Amazon's TOS prohibit direct contact with your customers, but there is a legitimate way around that. Put your website URL on the product.
  • You can do that by having it embedded in the product during manufacture if it is being produced specifically for you.
  • You can include it on your label.
Make sure that any customers who find you via that URL see something there that they will like, such as a discount voucher, or a related product at an attractive price.

I advise against shipping direct from your supplier to Amazon. They will always be on the lookout for product ideas to steal if they happen to sell well. They can find your supplier without your help, but why serve up your supplier's name and contact details to them on a silver plate?

Beware of misinformation on most Amazon courses. They will almost always tell you to only deal with Gold Suppliers on Alibaba because they are safe to deal with. That is nonsense!

They will tell you that you have to order the minimum order quantity quoted by suppliers. That also is nonsense!

Before you think of importing from any source, I suggest you read my AMA
GOLD!Sharing my lifetime experience in export/import. Product sourcing specialist.
Welcome to this great forum, and best wishes for success.

Walter
 

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Walter Hay

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Just as I'm writing this I'm getting ads from alibaba for "digital price tags" Digital Price Tag
If you like the idea of selling Digital Price Tags, sell them B2B. Your customers are not going to be the consumer market, they are going to be B&M retail stores.

Walter
 

Odysseus M Jones

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I advise against shipping direct from your supplier to Amazon. They will always be on the lookout for product ideas to steal if they happen to sell well. They can find your supplier without your help, but why serve up your supplier's name and contact details to them on a silver plate?
Coincidentally, my Cosori air fryer still had the shipping label from Shenzhen to Amazon FBA.

If the fries weren't second rate I'd consider contacting the manufacturer myself.

Does anyone know who makes for Heston Blumenthal's Sage deep fat fryer?

I have one & those twice-fried chips are the best.
 

pumpking

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My goal is to make $1 per sale and 1000 units a day, $1000 a day profit or $365,000 a year and sell for $1,000,000 within 3-4 years.
How big will your financial investment need to be to make it a reality? Does the money mostly go to marketing?
 

biophase

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How big will your financial investment need to be to make it a reality? Does the money mostly go to marketing?
I don't plan to market this. It's going to rise to the top on Amazon due to low price and sales volume (at least that's the plan). I can't really afford marketing at a $1 profit margin. That's why this will be an interesting new strategy.

As for how much I'll need to invest, I think $20k to start it should do it. It really depends on if it takes off quickly. Because it is a low profit product, reinvesting profits will be a slow crawl. If I see it taking off, I'm not going to let the capital be the bottleneck.
 
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Metodi

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... I realised that the business I was interested in pursuing (Amazon FBA)..,
Have been selling Amazon FBA (white label) for several years and although it was financially “okay” it was incredibly stressful (mentally) and unreliable.

You never know when you’ll wake up with a shut account (because a competitor pulled some black-hat trick on you) with all your inventory stuck at FBA and thousands invested in advance.

I spent enormous amount of effort to invite buyers to join my email list outside Amazon, but it’s not easy and there are so many hurdles.

These days competition is fierce and competitors are causing blood baths in the lucrative categories. And Amazon will never be impressed by your reasoning.

Anyway, you can be lucky for sure, but IMO you’ll learn more about biz by opening an independent store on your own domain.
 

Mr992

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Any business or even a job can be used as a leverage to start a fastlane business.

So your poll doesn't really make sense, you're just asking for approval.

It's obviously not a fastlane business as all it takes is one moderator having a bad day to ban your entire account.
 

Reign777

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So with that being said building your own website via Shopify is far for lucrative than Amazon ? You have 100% of control on Shopify, only hurdle is the easy entry literally anyone can do it and in my opinion you can only scale and profit with branded products otherwise you're just riding the wave with hot products that sells well for one month and saturated the next which is definitely not a fastlane business
 

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