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Amazon Is Not Your Route To The Fastlane

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Roli

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I have recently decided to import and sell product, I felt that using Amazon initially would be my route to the fastlane. As even though I know using the online giant to sell, means that I'm giving up control, which is essential in any fastlane business. I felt that I could cruise along for a few months whilst I got everything else in place.

However I am being reminded early on, what it means to give up control, I am currently sitting here waiting for a support email to be replied (phone back is down), so that I can send a shipment which I know will take 2 weeks for Amazon to process.

So for any of you new guys and gals out there, here is a little set of things which you will have no control over whilst selling on Amazon.

1. Costs

In the 3 months or so since I have joined, Amazon have changed their selling and warehouse fees, they have also changed the rules as to how many products a new seller can have stored with them at any one time.

At the moment this doesn't effect me, however I can easily envisage several scenarios in which it would.

2. Rules & Regs

Amazon is essentially AI software; so therefore when you sell certain items, even if you have permission to sell those items. The Amazon software, may well flag it up as restricted and either restrict that item, or your whole account.

I read a post not too long ago about a guy who had permission from the NFL, via a reseller to sell vintage NFL pins and memorabilia. Which had been going fine, however he then stuck an old 49ers badge on there, and his account was frozen.

If my memory serves me correctly; it took him something like 6 weeks to sort out. Imagine that; imagine having tens of thousands of dollars of stock being sold, and then having your account frozen, and facing weeks of frustrating emails trying to get your store back online.

All the while, losing money...

3. Terms & Conditions

When you sign up, you sign up to Amazon's Ts & Cs, and in all contracts of this nature, there is always a clause which says they can end your account with no warning and no explanation, if they so feel. Whilst this may never happen, why start a business with such a sword of Damocles hanging over you?

4. Technical Issues/Customer Support

If something goes wrong with your own website, you call your hosting company or any service providers that are supplying services pertaining to your site. With Amazon, you are at the mercy of their customer support, which may sort you out in minutes, or days, you have no control over which.

5. Inventory Processing

There will always be issues with processing inventory once you start moving a lot of product, and maybe even before. However, by using your own fulfillment companies and warehouses, you will be right next to the problem. Instead of having to deal with it via the filter of Amazon support.

You could of course sell on Amazon and keep this bit of control by not using FBA, however by doing that you are missing out on an extremely large, and ever growing percentage of customers who only buy from merchants who use FBA.

Conclusion:

Ultimately being on Amazon conveys huge benefits, as you can gain instant visibility in the largest shop in the world. However that comes with some serious strings attached.

Moving forwards, in an ideal world, I think I want between 10-15% of my sales going through Amazon, which I think will surf the line of producing enough sales to be worth it, and not having so many that they essentially have major control over the prosperity of my business.

There are people on FLF making millions of dollars from Amazon, just remember kids, they have all (well the smart ones), made sure that it is not their main income and use it as a tool to increase sales. Rather than one which dictates them.

Rant over...

Peace.
 

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MJ DeMarco

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Amazon is a channel. Yet, many people have made it their business model simply because it is the biggest and busiest. Far too often, these benefits of reach and simplicity outweigh the risks of losing control.

Nothing wrong with Amazon to build wealth -- I just would rather have it be a PART of your business, not BE your business.
 

Scot

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Take a look at most of the big Ecommerce players on here like @biophase and @Vigilante. Is amazon a channel which they use? Of course. But do they have a lot of their business on their own website. You bet.

It's similar to when eBay switched to favor Chinese wholesalers. A lot of people lost their shirt. But the guys who had eBay as a small part of their bigger machine, they're still around.
 

MoneyDoc

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Amazon is a channel. Yet, many people have made it their business model simply because it is the biggest and busiest. Far too often, these benefits of reach and simplicity outweigh the risks of losing control.

Nothing wrong with Amazon to build wealth -- I just would rather have it be a PART of your business, not BE your business.
MJ makes a great point here.

Nothing drives me more insane when someone says they have an "Amazon business". There is no such thing as an Amazon Business. You have a business that utilizes Amazon as one of it's SALES CHANNEL.
 

Sanj Modha

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Amazon is a channel. Yet, many people have made it their business model simply because it is the biggest and busiest. Far too often, these benefits of reach and simplicity outweigh the risks of losing control.

Nothing wrong with Amazon to build wealth -- I just would rather have it be a PART of your business, not BE your business.

This. Amazon is nothing more than a traffic source to me. Anything more is dangerous IMO.
 

RahKnee

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This. Amazon is nothing more than a traffic source to me. Anything more is dangerous IMO.
Sanj, how do you recommend using Amazon to guide traffic to your other channels? Right now, I sell a flashy/stylish product on Amazon and try to use this to direct customers to other products on my own website. Is there more to it than that?
 

Paul David

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I've been suspended on 3 Amazon sites for factors outside my control. I have got them reinstated. I've never generated a profit from my website due the costs of Adwords and low sales prices.

I do now however sell on 6 different Amazon sites and eBay uk. If one of these channels go down for a period of time it's not going to bring my business crashing to the ground.


Sent from my iPhone using Tapatalk
 

Roli

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This. Amazon is nothing more than a traffic source to me. Anything more is dangerous IMO.

I was very interested to hear your take on it Sanj, you are definitely someone I hope to emulate. When you say it's a traffic source to you; can you elaborate on that?

Thanks
 

Roli

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Amazon is a channel. Yet, many people have made it their business model simply because it is the biggest and busiest. Far too often, these benefits of reach and simplicity outweigh the risks of losing control.

Nothing wrong with Amazon to build wealth -- I just would rather have it be a PART of your business, not BE your business.

Yup, I think my problem was, even though I was fully aware of these facts, my silly little brain still tries to take the (perceived) path of least resistance. However like you say it's a channel, and as long as I keep that firmly in the forefront of my mind, I can't go wrong. Plus I was feeling quite emotional today, and felt like lashing out at Amazon :)
 

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With all that said, the title is 100% wrong. Amazon can be your route to the fastlane. You just need to know what you are getting into. Another forum member just posted his $3M income. Run that way for 1-2 years, and you are out of the rat race even if AMZ bans you later.

The question you have to asked yourself is, "If your Amazon channel disappeared tomorrow, would you be screwed?" And when I say screwed, I mean, will you lose your home? your car? do you have money saved up?

Treat Amazon like running hot at a casino, take money off the table while you are winning. If you keep doubling down, at some point your luck will run out.
 

Drew D

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I don't use Amazon as an eCommerce store, but rather to support my eCommerce store by building brand reputation and directing customers there. It's also a good sales boost. Therefore it is a route to the fastlane when used smart.
 

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Sanj Modha

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I was very interested to hear your take on it Sanj, you are definitely someone I hope to emulate. When you say it's a traffic source to you; can you elaborate on that?

Thanks

I use it to sell products I already sell off my main Shopify store so the risk is very minimal to me.
 

Roli

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Roli

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The question you have to asked yourself is, "If your Amazon channel disappeared tomorrow, would you be screwed?" And when I say screwed, I mean, will you lose your home? your car? do you have money saved up?

....my point exactly, the title was meant to illustrate this point, of course it is a "route". However it is easy to mistake it for the whole journey.
 

MoneyDoc

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With all that said, the title is 100% wrong. Amazon can be your route to the fastlane. You just need to know what you are getting into. Another forum member just posted his $3M income. Run that way for 1-2 years, and you are out of the rat race even if AMZ bans you later.

The question you have to asked yourself is, "If your Amazon channel disappeared tomorrow, would you be screwed?" And when I say screwed, I mean, will you lose your home? your car? do you have money saved up?

Treat Amazon like running hot at a casino, take money off the table while you are winning. If you keep doubling down, at some point your luck will run out.
Excellent point. I was trying to convey this message by @biophase in another thread but people didn't get the message.

As I like to put it - treat amazon as a cash flow business. Get as much cash out of it as you can to build your brands offline, i.e. off of amazon. All my profits from amazon is put towards marketing my social media pages, my own website, etc. Besides the free marketing and enormous customer base, the biggest reason I use amazon is because I can generate a lot of money very quickly.
 

Longlong

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I originally wanted to launch on Amazon, but got denied for a few reasons.

So I started my own eCommerce store and ran PPC ads. My business is now doing 4-5k a month in sales without Amazon.

But you CANNOT ignore Amazon, if that is where your customers are. You're just leaving a huge chunk of money on the table. I'm in the process of listing my product again.

IMO I welcome Amazon's stricter policies, it keeps the wannabes out.

And in some way, every channel you use, you give up some control. Google could one day just ban my ads/account and my sales would be gone. Bing just closed my ad account for no specified reason (which I am okay with since I wasn't getting sales from them anyways).

That's why @biophase advice is so important. You have to save your money! Treat everything like it could dissapear at any moment and you will be fine. It will keep you on your toes and continue to improve/expand. There is no "set it and forget it" anymore.
 

Roli

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I originally wanted to launch on Amazon, but got denied for a few reasons.

So I started my own eCommerce store and ran PPC ads. My business is now doing 4-5k a month in sales without Amazon..

Thanks for your reply, that's awesome! I am just about to ask a question along those lines. Have you made a post about that process? I am just about to do that, and I feel I'm about to possibly enter a walled garden like Wix Website Builder, but I'm not sure what to do.
 

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