How Amazon Ruined My Life

[Kak]

I absolutely understand and have experienced the issues Amazon sellers are facing right now, however ruining lives is not necessarily the phrase I would use to describe it.

I saw this coming from 2 years ago. This is exactly what happens when the low hanging fruit is gone. Things like this never stay easy for long.

Consumer products, as a business, is way overdone right now. Have you noticed that 60 percent of the forum has an ”Amazon business”? That's a problem.

Entrepreneurs think outside of the box. Amazon is currently the box.

 

[MJ DeMarco]

Entrepreneurs think outside of the box. Amazon is currently the box.

Featured+

 

[BNeumann]

Well, not really. To be honest, I hate them now. But at first I was smitten. The tempting allure of a slightly different version of a short cut. My name is BNeumann, and I am (only currently) an Amazon failure. Man did they make a lot off of me. The Acos based on their ppc is just crazy, and it's a guaranteed win for them. Outrageous to try and launch a brand on their, but I did it. Nearly three years ago now and am currently in fire-sale mode just to get something on the income docket. Full custom designed proprietary product and all the accoutrements: website, social media, influencers on board, social proof, good reviews, photos, custom packaging and branding. It has taken me a while to realize that I have a product problem. And I chose to come out strong in a niche that wasn't as profitable as I had initially forecast. So here I am, learning from my own crap and moving on. Happy to be on this forum learning from like minds. And in spite of my recent "learning experience", I am hungry. And Daddy needs to get fed.

 

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[fastbo]

Ebay used to be the same way. Margins were HUGE on ebay back in the 2000's. Amazon was the same way 5 years ago. Now its too easy for anyone to do exactly what everyone else is doing, therefore margins will drop. As Warren Buffet says you need a business with a moat, else you essentially sell a commodity. And selling commodities doesn't make you rich unless you own all the market share. Why do you think you'll get rich selling spatulas from China when a million other people can buy it at the same price you're buying it for (or within a nickel) and undercut you?

And for your specific instance, it seems like you've gone with the old "if you build it they will come" method to choose your product. It doesn't matter what the distribution channel is and how much social proof you build, if the market doesn't want it, you won't sell it.

 

[Kak]

That really depends on the person. But a profitable product launch on Amazon is a success in my eyes. At this point in my career, I am looking for at least $100k in revenue targeting at least a 30% profit margin for each type of business I start.

So $30,000 before taxes.

I don’t call that a company brother, I call that a hobby or an investment. You would need 10 companies like that to even equal a good executive salary.

 

[MoneyDoc]

I still don't understand how this is Amazon's fault? You said you chose a niche that wasn't as profitable as you initially thought it was... there's your answer?

Also, as long as there is new trends, there will always be opportunities on Amazon. Amazon is not going away for a while. Neither are the countless 6+ figure entrepreneurs it has created and is creating. The hard part now is, finding a niche. Unfortunately, people aren't willing to put in the effort. People nowadays think they can just put up a silicone BBQ glove and start selling 50 units a day profiting $10/unit. That won't happen.

As to Amazon being the "box", I don't entirely agree with this. Of course if all you're thinking about is Amazon and nothing else, then yes, Amazon can be considered the box. But most entrepreneurs are just using Amazon as a launching platform. I wouldn't launch a new brand anywhere else. Hundreds of millions of buyers waiting to buy with 1 click. Think about it, when you want to buy something online, where's the first place you search? For 90% of people, that's amazon.com/amazon.ca/amazon.co.uk/amazon.de/amazon.co.jp.

As with anything, the amount of effort you're willing to put in, is what you'll get out of it. Amazon is no exception.

 

[Kak]

So my question is, after you've made this awesome product that's ready for the world... are you not going to put in on Amazon?

Let me clear this up because everyone thinks I’m anti-amazon.

I would put it on Amazon.... Among MANY MANY other strategies.

Why? Because it’s EASY, out there, and products are expected to be there. That is also the downside. Would I pick apart Amazon’s algorithms, suck off customers for reviews, and try to game some advertising platform daily and call it MY business? No, because I don’t own the ecosystem.

 

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[million$$$smile]

Selling on Amazon can be a way to make money, but there is still a lack of Control.

With over 2 million sellers worldwide, Jeff Bezos can still pull the plug anytime on your revenue stream if you are relying on Amazon for your Brand.

I too sell on Amazon and do fairly well. Anyone that attended the Summit saw my numbers.
But I don't sell more than 25% of my own Branded products on that marketplace.

Why?

Mainly because I don't like the idea of selling a product to someone that is not my customer.
They are Amazons. I, in reality am just a fulfillment center for Amazon's customer. I don't like giving up 15% to an outfit that I cannot retain as a customer, nor have the choice to decide whether to refund, or resend the product out, or to call and find out why they did not like the product.

I would much rather wholesale my own personal brand to others and let them deal with the headache. To me, it gives me more Control. I won't sell to a distributor unless they stock our product in a B&M. That way, I feel that they also have opportunities to market my Brand locally, which they seem to like.

BUT, I am satisfied to sell 2000 other products on Amazon that are not my own brand for the simple reason that I am ok with being part of the Big Yard Sale. I realize they are not my customer. I also realize that Amazons TOS can and has changed over the interim. "Changes to fee structure" is usually just a nice euphemism for fee increases. Again, a lack of Control.

I read somewhere that China sellers more than doubled in 2015 alone on Amazon. I see the handwriting on the wall. Amazon is courting them. Now, why would I want to work for someone that is working hard to build new competition for me?

I decided to put more effort and money in developing something that has greater Control, albeit websites, or vendors or B&M's.
I can service those customers.
I can show them other products.
I have the last say on refunds, resends, and upgrades.

Or not.

And in the meantime, take some money off the table and build something that clearly has better control for me.

 

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[biophase]

Full custom designed proprietary product and all the accoutrements: website, social media, influencers on board, social proof, good reviews, photos, custom packaging and branding.

So my question is, after you've made this awesome product that's ready for the world... are you not going to put in on Amazon?

 

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[ecommerce_lovin]

So $30,000 before taxes.

I don’t call that a company brother, I call that a hobby or an investment. You would need 10 companies like that to even equal a good executive salary.

Like I said each new venture I start. I have a couple ventures going on right now that are paying the bills plus some.

An extra $20k per year on top of what I am already making. I am cool with that

 

[MoneyDoc]

I like how a lot of the posts saying Amazon is not great, amazon is saturated, amazon is not a real business, amazon isn't a good place to start a brand - are from people that don't even have a sellercentral account.

For those who think amazon is too saturated, or you can't build a real business on amazon, take a look at the numbers my new brand did last month. This is a 6 month old company. And by the way, I don't have an amazon business, I have a business that sells on amazon. Show me one other platform that can bring me these numbers for my company in 6 months.

Imgur

I don't understand how anyone can say amazon is not a good place to start a physical product brand. You're either ignorant or completely naive.

 

[Walter Hay]

How are you even comparing eBay and Amazon? I haven't seen one person building a "brand" on eBay.

That's the keyword people are missing out on when following these amazon courses and ecommerce courses. You think ON Gold Whey and Muscletech Whey are different? They're the same protein. The difference is BRANDING.

That's why 90% of the so-called "amazon gurus" and "amazon entrepreneurs" are failing and then they turn and blame the platform. The same platform that has helped REAL entrepreneurs sell 8 figure brands that they solely started on AMAZON. The difference between them and all the new guys? They INVESTED into their brands. They created real BRANDS. They DID NOT put up a generic silicone spatula and call it a day as they went lambo shopping.

I still can't believe how some people are calling amazon and the whole physical product/consumer product industry "dead" or "not sustainable" anymore. That's far from the truth. A physical product brand/business is the FASTEST way to financial freedom and it will ALWAYS be that way. And the BEST way to launch that brand/business is and will be for a long time, AMAZON.

I agree that investing in your brand is vital to success.

Too many people think they have invested in their brand simply by following the advice of countless "experts" who tell them to private label by "slapping on a label". Some are even worse and use the term "sticker" in place of label.

The term "Private Labeling" is grossly misused and misunderstood. Most often it is taken to mean putting a label on a generic product so that people will know that it's yours, not your competitor's.

That will do nothing towards building a brand. At best they will identify your product, but brand recognition will be practically non-existent.

Thought needs to be given to the total marketing concept not just advertising. This means brand name, slogan or motto, the color scheme and its consistent use, the logo, label or product marking method, packaging that can sell as well as or in same cases even better than the label, font types and their proper use - for example so many people seem unaware that ALL CAPITAL LETTERS ARE HARD TO READ AND TURN MANY PROSPECTS OFF.

After all that, if your total marketing concept has not included product sourcing and all logistics from that point to your customer's door, plus a generous return/refund policy, you won't have a lasting brand.

I know that the approach I have outlined has worked extremely well for me - importing business franchised in 4 countries and operating for over 20 years - but others might like to contribute ideas on what else should be covered.

Walter
P.S. Definitely start with Amazon if it suits your marketing plan, but don't forget to set up your own eCommerce store in tandem.

 

[chimichangatime]

Amazon is the same way right now for erotica authors. Back <2015, it was a gold rush - put anything up and you're raking in cash. Today it's flooded and the gold diggers come and go quickly when they realize it's work.

Tons of authors blame Amazon for their own mistakes. They leave instead of dissecting the failure to learn and improve. "Amazon changed the algorithm! Amazon dungeoned me! Amazon blah blah!" You know what? If your existence depends on Amazon, you're doing it wrong. Your strategy should work no matter what Amazon or CompanyX does.

if the market doesn't want it, you won't sell it.

The guys and gals making it big do the work. That includes finding the right product/niche. There has to be a NEED, right? That means doing some testing and even failing often. I've written in 3 niches and made my share of mistakes. I failed, analyzed, and got back at it. I'll find a niche that I can write well AND the readers like my writing. And I don't care if **I** like the niche, I care if people like my writing in said niche (could be gay, straight, bi, monster, fetish, whatever, I don't care, I'll try any niche if the numbers look promising).

The most profitable romance authors? They aren't gaming the system or copying everyone else, they've systematized being a romance author. There's a guy on a forum (a non-free author forum) who had his first $1M/year in 2017 writing mid-list romance books. He upped the ante by hiring out - he buys some pre-written stuff and does an edit for his "voice," he hires people to flesh out his plot outlines, he hires editors, he runs tens of thousands of dollars in ads... he has a backlist of hundreds of short erotica and also novels. He has a virtual assistant.

Oh, and he doesn't rely on Amazon. He has a basic strategy: write good (but not great) romance that women 30-55 will devour ravenously, and do it at high volume. That strategy doesn't change if Amazon changes.

He used to teach people 1:1 but too many never followed through... sound familiar?

The business still relies on him so it's not entirely Fastlane but he works like 4 hrs a day and his profit is a few hundred thousand a year. Not bad for a self-published fiction writer.

You failed! Great! Own it, learn, try again.

 

[MoneyDoc]

Ebay used to be the same way. Margins were HUGE on ebay back in the 2000's. Amazon was the same way 5 years ago. Now its too easy for anyone to do exactly what everyone else is doing, therefore margins will drop. As Warren Buffet says you need a business with a moat, else you essentially sell a commodity. And selling commodities doesn't make you rich unless you own all the market share. Why do you think you'll get rich selling spatulas from China when a million other people can buy it at the same price you're buying it for (or within a nickel) and undercut you?

And for your specific instance, it seems like you've gone with the old "if you build it they will come" method to choose your product. It doesn't matter what the distribution channel is and how much social proof you build, if the market doesn't want it, you won't sell it.

How are you even comparing eBay and Amazon? I haven't seen one person building a "brand" on eBay.

That's the keyword people are missing out on when following these amazon courses and ecommerce courses. You think ON Gold Whey and Muscletech Whey are different? They're the same protein. The difference is BRANDING.

That's why 90% of the so-called "amazon gurus" and "amazon entrepreneurs" are failing and then they turn and blame the platform. The same platform that has helped REAL entrepreneurs sell 8 figure brands that they solely started on AMAZON. The difference between them and all the new guys? They INVESTED into their brands. They created real BRANDS. They DID NOT put up a generic silicone spatula and call it a day as they went lambo shopping.

I still can't believe how some people are calling amazon and the whole physical product/consumer product industry "dead" or "not sustainable" anymore. That's far from the truth. A physical product brand/business is the FASTEST way to financial freedom and it will ALWAYS be that way. And the BEST way to launch that brand/business is and will be for a long time, AMAZON.

 

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[Kak]

How to build a company where the best ideas win

Thought this was interesting... Ray Dalio’s take. ...

“To be a successful trader one has to bet against the consensus and be right.”

“To be a successful entrepreneur one also has to bet against the consensus and be right.”

 

[Tom Coffee]

I have found in my businesses I have started that it requires a hell of a lot hard work and long hours to be able to make good money. Good money to me was over $500,000 a year gross.
When I started by first a business back in 1986. It took 2 years to do that my myself at first, I added people as I grew. I was in a service and sales business. I started with $3,000 cash and a 30,000 loan . It take a lot of time learning also. As you have to wear many hats when you start your business at first. I have used that money from that first business to build other businesses.
I had some of them fail. It is a constant learning curve in business. The market place changes quickly now days. You have to keep up and keep trying new things.

 

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[BNeumann]

I absolutely understand and have experienced the issues Amazon sellers are facing right now, however ruining lives is not necessarily the phrase I would use to describe it.

I saw this coming from 2 years ago. This is exactly what happens when the low hanging fruit is gone. Things like this never stay easy for long.

Consumer products, as a business, is way overdone right now. Have you noticed that 60 percent of the forum has an ”Amazon business”? That's a problem.

Entrepreneurs think outside of the box. Amazon is currently the box.

Agreed. The "Ruining" was more like self-deprecating humor. Your last quote is what I learned the hard way. Cheers.

 

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[Kak]

Ebay used to be the same way. Margins were HUGE on ebay back in the 2000's. Amazon was the same way 5 years ago. Now its too easy for anyone to do exactly what everyone else is doing, therefore margins will drop. As Warren Buffet says you need a business with a moat, else you essentially sell a commodity. And selling commodities doesn't make you rich unless you own all the market share. Why do you think you'll get rich selling spatulas from China when a million other people can buy it at the same price you're buying it for (or within a nickel) and undercut you?

And for your specific instance, it seems like you've gone with the old "if you build it they will come" method to choose your product. It doesn't matter what the distribution channel is and how much social proof you build, if the market doesn't want it, you won't sell it.

Rep+

 

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[Kak]

No @biophase, amazon is apparently dead...

No, not dead. Highly competitive and unoriginal? Yes.

 

[johnp]

Would I pick apart Amazon’s algorithms, suck off customers for reviews, and try to game some advertising platform daily and call it MY business? No, because I don’t own the ecosystem.

This is exactly how I feel.

My mind is completely blown by how many people aren't building their own email list and customer database. Most email platforms today have amazing CRMs built in. That's where I'd put most of my focus. At least you control way more than you do with Amazon.

And with email you can even download your email list and put it on a floppy disk in a vault somewhere in case the email platform goes under. You really can't take an email list/ customer database away from someone. But with Amazon, you can't even do that. Maybe I'm just crazy though.

 

[Kak]

---- > 80 % of what people do on amazon will be average at best


only 20 % of people will make decent money on amazon and brag on forums or youtube

Of course you are correct about the numbers... however “making decent money” on someone else’s marketplace and owning an actual business are, in my opinion, two very different things.

 

[biophase]

Just one more example because this happened yesterday.

Yesterday, I ran out of stock on one product on my website. Guess what happened? That one product spiked on Amazon in sales. So the natural thing that my customers did when my website was sold out was either Google it or go to Amazon to buy.

Think about how much you'd be missing out if you only sold on your website. How many people searched and found out about my company on Amazon and then bought on my website later? Who knows? But I can tell you the answer would be zero if you weren't on Amazon.

 

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[Fortune5ive]

When everyone zigs... you zag.

 

[Real Deal Denver]

When everyone zigs... you zag.

Words to live by. I now am closer to the meaning of life and finding true happiness.

Very similar to this deep thought is the not too popular saying: When life hands you lemons, get some vodka to go with it, and kick back.

I don't know which of these sayings I like more.

 

[biophase]

Ehh...don't really think amazon is "the best" place to start a brand. Amazon seems to have a commodiziting effect. It seems big brands were already big when they went on amazon. As in, they distinguished themselves from a commodity by branding off amazon making them resistant to 3rd party marketplace commodization.

I do see tons of brands on amazon and in my eyes most are generics even if they got their own label.

Some industries like high end fashion where their exclusivity is part of their value proposition, I would think get negative impact from amazon. They may increase their sales short term, but the long term brand value will decrease due to reduce exclusivity and ease of obtainment.

The best products in amazon I believe are functional physical products where branding isn't as important like fashion.

Don't know if commodizting or commodization are actually words. But you get the point.

Just my opinion.

You don't build a brand on Amazon. But it's dumb to not use that channel. When I launch a brand on Facebook, I link to my website. But guess how many people go to Amazon and search for my brand and buy it there? Don't you think there are a few to many? If this didn't happen, I wouldn't see a blip on my sales whenever I posted on Facebook.

Would those people have bought if they didn't find it on Amazon? I don't know. Amazon is convenience of not having to take out your credit card and just clicking a few buttons. Checking out on a brand new website sucks and takes so much more time.

 

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[biophase]

I don't understand how anyone can say amazon is not a good place to start a physical product brand. You're either ignorant or completely naive.

They don’t like money.

I just launched a new company 2 weeks ago and it’s done $3k on Amazon with no ppc. I did $4k on my website.

So without Amazon would I have captured that extra $3k?

 

[Kak]

I don't think you should blame Amazon for your failure on their platform. It sounds like you may have gone into an over-saturated niche.

Plenty of people are starting brand new successful companies on Amazon with the PPC and influencer method.

What is a “successful company”?

 

[ecommerce_lovin]

What is a “successful company”?

That really depends on the person. But a profitable product launch on Amazon is a success in my eyes. At this point in my career, I am looking for at least $100k in revenue targeting at least a 30% profit margin for each type of business I start.

 

[MoneyDoc]

No, not dead. Highly competitive and unoriginal? Yes.

I'm not disagreeing with you @Kak. I always tell people, use amazon simply as one of your channels and don't think you can put up a generic product, slap a name on it, and expect it to sell 100 units a day.

I'm just saying, it's still the best place to start a new brand.

 

[Kak]

Selling on Amazon can be a way to make money, but there is still a lack of Control.

With over 2 million sellers worldwide, Jeff Bezos can still pull the plug anytime on your revenue stream if you are relying on Amazon for your Brand.

I too sell on Amazon and do fairly well. Anyone that attended the Summit saw my numbers.
But I don't sell more than 25% of my own Branded products on that marketplace.

Why?

Mainly because I don't like the idea of selling a product to someone that is not my customer.
They are Amazons. I, in reality am just a fulfillment center for Amazon's customer. I don't like giving up 15% to an outfit that I cannot retain as a customer, nor have the choice to decide whether to refund, or resend the product out, or to call and find out why they did not like the product.

I would much rather wholesale my own personal brand to others and let them deal with the headache. To me, it gives me more Control. I won't sell to a distributor unless they stock our product in a B&M. That way, I feel that they also have opportunities to market my Brand locally, which they seem to like.

BUT, I am satisfied to sell 2000 other products on Amazon that are not my own brand for the simple reason that I am ok with being part of the Big Yard Sale. I realize they are not my customer. I also realize that Amazons TOS can and has changed over the interim. "Changes to fee structure" is usually just a nice euphemism for fee increases. Again, a lack of Control.

I read somewhere that China sellers more than doubled in 2015 alone on Amazon. I see the handwriting on the wall. Amazon is courting them. Now, why would I want to work for someone that is working hard to build new competition for me?

I decided to put more effort and money in developing something that has greater Control, albeit websites, or vendors or B&M's.
I can service those customers.
I can show them other products.
I have the last say on refunds, resends, and upgrades.

Or not.

And in the meantime, take some money off the table and build something that clearly has better control for me.

Bump...

More people should read this.