Why Amazon Sucks: The Master Thread

[AgainstAllOdds]

The purpose of this thread is to present real, concrete facts and numbers on why starting a business on Amazon might be the absolute dumbest, lowest ROI thing you could do. It's not based on anecdotes. It's not based on hypotheticals. It's based around numbers published by one of the most pro-Amazon sites out there: JungleScout. However, instead of presenting it the way JungleScout wants to, I'll break down the numbers into what they really mean.

A quick summary: The average person fails at Amazon. Of those that succeed, the average person makes $9,000 a year at $10 per hour. To get there, they invest 10+ months of their time, and $4,000. Amazon has reached the point of "Uber" where it has misled people into believing that they're starting a real business that's generating real returns - when in reality the average seller is slaving away at $10 per hour.

In later posts, feel free to share theories and anecdotes. The Amazon-brainwashed crowd, feel free to post emotional responses and select anecdotes. In this post, I'll dive right into the numbers.

Before we begin, let me note the inspiration for this thread: @jpanarra's "New Sellers Earn Between $26,000 To $810,000 Per Year In Profit" - a thread based around data that was taken from the following primary source: How Much Money Do Amazon Sellers Make? | Jungle Scout. I was originally going to write a quick reply to his post, but as I started looking at the language and numbers, I started breaking them down and noticed exactly how bad they really were. That's how this thread was born. If the language is a little off, note that it was originally intended as a reply before the data became valuable enough to make its own thread.

So let's get to it.

First, let's start with the note that the data is published by JungleScout - whose primary incentive is to get more people selling on Amazon. Next, let's look at exactly who the data is based on:

"Between November 14 and December 10, 2019, Jungle Scout surveyed 2,063 Amazon sellers about their experiences. This article references responses from 1,046 experienced Amazon sellers who have more than a year of selling experience and at least one live product listing."

These guys literally surveyed 2,063 people. Decided that half of them suck and don't support their findings. Tossed them out, and kept only half the responses, 1,046 sellers that had attained "some" success.

Why?

Because the 1,017 others didn't fit their narrative and PR push.

If you look at what that actually means, it means that over 50% of preselected Amazon sellers (that were serious enough to have a JungleScout account), fared worse than the data that will be presented below. Add to that all the people without a js account, all the people that have already failed, or those that will fail, and you're left with a very high percentage of sellers that have been huge disappointments.

Of the 50% left, they further fudged the numbers using misleading statements and improper calculations. Let's start with an example of one of those statements:

"For 67.2% of the sellers, the profit margin is more than 10%. If that is not impressive enough, 36% see profit margins above 20%."

This statement at face value looks impressive. Here's what it actually means:

• 32.8% of sellers make between 0-10%
• 31.2% of sellers make between 10-20%
• 36% of sellers making profit margins above 20%

And here's what that means in terms of average person...



Using the chart above, it means that the median profit margin per Amazon seller is 15% (and note: I said MEDIAN, not "average" or some bullshit that Jungle Scout will use to change perception). That's from the product. Not net after including R&D, branding, EMPLOYEE costs, and all other costs. If you factor in those costs, then the true net margin will be a lot lower.

Is that still impressive? Could be. But is it as impressive as the statement that they built around the data? Definitely not.

Next, let's see how they present sales numbers:

"A little over half or 50.7% make from $1,000-$25,000/month. In terms of annual sales, it can mean anywhere from $12,000-$300,000.

Another one in five (20%) make $25,000 – $250,000/month, totaling annual sales between $300,000 and $3,000,000. But there is another small group (3.3%) making more than $250,000 in monthly sales.

On the lower side of the earning scale, 23.8% of sellers make less than $1,000 per month, with 2.1% not knowing how much they make."

Another quote that seems incredibly impressive. In reality, far from it.

That's what the article presents for sales numbers. Let's see what these numbers actually mean in terms of sales percentiles based on this statement:

• 0 percentile: Lose money
• 24th percentile: $1,000 in sales per month
• 80th percentile: $25,000 in sales per month
• 99.9th percentile: $250,000 in sales per month

From their statement, they made you think that 1 in 5 sellers do $250k+ in sales per month. However, one in five people don't do $250k in sales per month. One in a hundred does. The exception to the rule. The outlier.

To dive deeper, luckily for us, JungleScout was naive enough to publish their full data:



So using this info, we can continue and break down the data even more into what it actually means:

2% don't know their sales, so we'll just add them into the lower tier group (likely wantrepreneurs), making the rest of the percentiles as follows:

• 0-17th percentile: Make under $500 in sales (aka - lose money)
• 17-26th percentile: $500 to $1,000 in sales
• 26-48th percentile: $1,000 to $5,000 in sales
• 48-61st percentile: $5,000 to $10,000 in sales
• 61-76th percentile: $10,000 to $25,000 in sales
• 76-85th percentile: $25,000 to $50,000 in sales
• 85-92nd percentile: $50,000 to $100,000 in sales
• 92-97th percentile: $100,000 to $250,000 in sales
• 97-99.9th percentile: $250,000+ in sales

The average person (50th percentile) makes $5,000 in sales per month. Think about that.

If you don't understand managerial or financial accounting, then you'll assume that the number is good. Afterall, the average person doesn't "make" $5,000 at their job every month. Amazon has to be the way. Or does it. We have to ask the next question...

So what's that mean in terms of profit per year? Not sales, but profit.

If we use JungleScout's bullshit metric, then that's a ton of money. If we use the median profit margin of 15% (which it is according to the chart above), then here's what that means:

• 0-17th percentile: Lose money a year.
• 17-26th percentile: $900 to $1,800 in GROSS profit per year
• 26-48th percentile: $1,800 to $9,000 in GROSS profit per year
• 48-61st percentile: $9,000 to $18,000 in GROSS profit per year
• 61-76th percentile: $18,000 to $45,000 in GROSS profit per year
• 76-85th percentile: $45,000 to $90,000 in GROSS profit per year
• 85-92nd percentile: $90,000 to $180,000 in GROSS profit per year
• 92-97th percentile: $180,000 to $450,000 in GROSS profit per year
• 97-99.9th percentile: $450,000+ in GROSS profit per year

The average seller grosses $9,000 per year from their Amazon business.

And I know you wantrepreneurs will say "Yeah, but look at the top brackets, those guys are killing it". Yeah, they are, but how much are they spending on employees?

Those guys that are doing $450,000 gross per year? How many employees do you think they have? And how much money do you think they're actually putting into their pocket end of the year? I won't answer this question since there's too much variability, however I will give you concrete data for the next point.

"Ok, so $9,000 a year. That would help me a lot with my life. How much do I have to work in order to make that money?"

Here's the breakdown from Junglescout:

• Fewer than 4 hours per week: 13%
• 4-10 hours: 24%
• 11-20 hours: 20%
• 21-30 hours: 15%
• 31-40 hours: 10%
• 41-50 hours: 9%
• 51-60 hours: 3%
• More than 60 hours: 6%

What's that actually mean in terms of percentiles?

• 0-13th percentile: 0-4 hours per week
• 13-37th percentile: 4-10 hours per week
• 37-57th percentile: 11-20 hours per week
• 57-72nd percentile: 21-30 hours per week
• 72-82nd percentile: 31 to 40 hours per week
• 82-91st percentile: 41-50 hours per week
• 91-94th percentile: 51-60 hours per week
• 94-99.9th percentile: 60 hours + plus week

The average person works close to 20 hours per week. That's what the means. For argument's sake, let's estimate that down to 18 hours per week.

The average person works 18 hours per week on their Amazon "business" to make $9,000 a year. Still worth it?

Let's break that down per hour:

18 hours per week * 50 weeks [two vacation weeks] = 900 hours per year.

$9,000 / 900 hours = $10 per hour.

The average "successful" seller works at $10 per hour to make $9,000 per year.

But wait... that's not all folks. There's also a startup cost!

You have to research Amazon, learn the Amazon skill sets, learn how to import, pay for courses, samples, moulds, manufacturing costs for products that you'll mess up and have to throw out, etc.

That all takes money and time.

How much money and time? Here's the breakdown from JungleScout:

They asked their sellers "How long does it take to become profitable on Amazon?":

• Profits within 3 months: 22%
• Profits within 3-6 months: 22%
• Profits within 6 months-1 year: 23%
• Profits within 1-2 years: 13%
• Profits within more than 2 years: 3%

The median person took over 6 months of time to become profitable. My estimate, is around 9 months for the 50th percentile mark.

Disappointed?

Let me disappoint you further.

Here's the data set when looking solely at people that started selling in 2018 and 2019:

• Profits within 3 months: 16%
• Profits within 3-6 months: 23%
• Profits within 6 months-1 year: 24%

For people that jumped in recently, the time to be profitable increased significantly. My estimate for the average: 10 months.

Oh, and to add even more salt: the data above doesn't include sample, research, or studying time, the entire wantrepreneur phase where you're taking courses and reading threads on the fastlane forum.

And note: "Time to be profitable" can otherwise be written as "Time to stop losing money". Because that's what it really is. It takes the average person ten months to stop losing money on top of whatever they spent on courses.

So how much money do people "invest" to get started on Amazon?

Here's how much JungleScout users spent:

• Sellers spent less than $500: 17%
• $500-1,000: 12%
• $1,001-2,500: 13%
• $2,501-5,000: 18%
• $5,001-10,000: 21%
• More than $10,000: 21%

The median person spent about $4,000 to get started selling on Amazon.

So all in all, using JungleScout's data...

The average seller spends $4,000 and 10+ months to get started on Amazon. Once they're up and running, they can expect to make $9,000 a year at $10 per hour. From that, they have to subtract out employee costs, and other expenses, likely netting them a lot less.

Oh ... and that's if you're successful. If you're in the 50%+ category of people that JungleScout deleted from its "data set", then just expect to lose money altogether.

Amazon still sound cool? @MJ DeMarco

 

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[MJ DeMarco]

Amazon still sound cool? @MJ DeMarco

Not sure why you tagged me.

Amazon is a channel, not a business.

And those who do well on it experience a nice CAGR. I subscribe to many "business for sale" websites where these businesses are listed, including their numbers. Many are started with little cash and sell for 150K in a matter of years, sometimes months. Those are impressive numbers.

Providing data (who's source is not from Amazon to begin with) that indicates most "Amazon businesses" fail is not surprising to me, but expected. In fact, the data (as you alluded) is probably worse than reality since a bias is involved with Junglescout.

Most people looking to "make money" fail in business, including on Amazon. Likewise, most people who self-publish books and throw it on Amazon also lose money.

I'd also add that people who use "jungle scout" are likely money-chasers looking to make money, not create legit value or enterprise business value. As I've stated for many years, Amazon is a channel not a business. People who use it as such probably fall into the "95% failure" category.

If you own a business that sells products, you probably need to be on Amazon.

As biophase mentioned in the other thread...

The reason a quarter of the people make less than $1000/mo is because they hear that Amazon is a cash cow and want to jump in without thinking that this is hard and a real business. Amazon is a channel, a great way to jumpstart a business, but if you only think in terms of Amazon, you will get crushed.

Money chasers.

No different than the passive income chasers, the "do what you love" chasers, and the "follow your passion" chasers ... having an approach that is NOT market centered will get you crushed and lumped into the 99%.

 

[biophase]

The one pro-Amazon argument I always hear about selling on Amazon, is that it has ready traffic. Your product, once uploaded, gets a shit ton of views. Whereas on your own website, you've to pay for FB ads to drive all the traffic yourself. Plus, on Amazon, the people go there already with the buying mindset.

Of course, I don't sell on AMZ so I don't know how true or powerful the "gigantic stream of traffic" argument is. Would that factor be enough to override the cons?

I launched a new company the week before last black friday, so it's basically been selling for 5 weeks. So far, the company was sold about $21,000 in sales and spent about $700 in Amazon PPC. I doubt I could have done this on my own website and spent only $700.

I want to add that Amazon takes 15% commission, so you could argue that I've spent an additional $3,150 on traffic ($21k X .15% = $3,150).

So total spent would be $3,850. I wonder if I could get $21k sales on $3,850 FB or Google PPC spend.

Hmmm. I'm actually not sure. Just throwing out some numbers. Let's say I'm paying $2/click and have 5% conversion rate on my website.

1900 clicks = 95 sales @ 5% conversion rate (which is really high)

On Amazon I had 400 sales.

I think Amazon wins here.

 

[Vigilante]

There was a "seller" who posted on the Amazon message boards a few weeks back. The short version of their message was :

"I created my account and listed an item for sale on Amazon. It sold, and Amazon sent me the order to fulfill. I thought Amazon shipped the product." When asked about the seller's "business" they didn't have one. They literally thought
1. Make an account
2. List an item
3. Amazon ships it from Amazon inventory
4. Lambo

THIS individual would be counted in the seller failure statistics.

I had a friend contact me a few years ago to ask me where the list was of the products that they could sell on Amazon. I thought they meant the restricted items. Nope. She was looking for the catalog of items she could list. As if, like the above "seller" Amazon just had to list something and then Amazon sent you money. Maybe like an affiliate?

In any case, Amazon is NOT what it used to be. I built a good business that was predominantly Amazon and sold it. I will do it again. But people like @AllenCrawley that are successfully building businesses with an Amazon component (like MJ said, a channel) but not solely reliant on it in the long run will probably be more healthy.

The scale of Amazon is hard to ignore, when 1 out of every 2 eCommerce dollars is currently spent on Amazon. I expect Walmart to change some of that in 2020, and eBay is still doing a lot of business in certain categories.

I agree Amazon is harder today, but that is not because of Amazon per se. It's because of Amazon's recruitment of Chinese sellers, and because of guru classes that have people believing they can just open an Amazon account and then pick the Lambo color.

Like @biophase I launched a bunch of new products on Amazon this past Fall, and did OK. It also helps any brand with social proof. My wife was searching for a product last year, and she couldn't understand why it WASN'T on Amazon. Customers just expect it to be there. If that product had been on Amazon, with NO PPC, the organic search would have returned the result and she would have bought it on Amazon. Instead, she bought something similar on Amazon that did return in the search results.

Amazon is a finicky lover but people go back to her time and time again because she's just hard to live without.

 

[Vigilante]

One of the brands I recently launched on Amazon will NEVER make money on Amazon. I could sell a bazillion units and answer a bazillion emails, and it will never sell for a bazillion dollars. The price/value ratio isn't right. If I were dependent on this for my liveleyhood, I would be screwed. Meanwhile, I will sell a lot of units.

So why bother? There are some products that aren't conducive for eCommerce. The gross margin % is acceptable, but the gross margin $$ aren't significant enough. I may make a $1.00 a unit net, sell 10k units a month, and net for the business $120k/year deseasonalized.

Why bother?

Because once I get some of the products to favorable reviews and ranked in their categories, I can then take the product to their destiny channels of distribution, and use the Amazon social proof as justification for retail placement. Amazon isn't by end game, it's the first quarter of a four quarter ball game.

I launched a stupid business on Amazon a few years back. I sourced some candles that I loved, and thought I could make a market out of them. They were great products. Problem was they cost a fortune to ship, and by the time I paid Amazon fees, shipping fees, and cost of goods, it was a losing proposition. I was fortunate to not sell thousands of them, because it would have been a pain in the a$$ for small reward. I quickly cut bait and moved on, learning better how to calculate ROI.

You can use Amazon to position your non-Amazon business. My non-Amazon targeted business/product line still needs to be on Amazon. Amazon still has the potential to legitimize a launch brand. I don't ever expect Amazon to be my largest channel for this product line. but it will probably always live in the shadows on Amazon. The key for that one is to figure out how to maximize the ROI, mitigate expenses, mitigate pain in the a$$, and get the platform to do what I need it to do.

 

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[biophase]

No wonder why you have to start so many brands..., seems like you are choosing value additions that provide value in small magnitude that can be duplicated easy. Then the next guy comes in and easily copies that single addition of an AirPod Case.

Why not magnitude over volume, so you don’t have to constantly dink around with making another low value addition brand every damn month.

I just wanted to address this statement also. A small magnitude value add can be enough to give you the advantage that you need to sell. The problem with a large magnitude value add for most people is that it generally puts your product into an unknown territory.

Going with my example, adding an 'airpod' pocket to a backpack is a small improvement. But it will likely cost $.25-$.50 in manufacturing. So you can price your backpack at the same price as others.

However, let's say you go big and make an ultralight backpack, weighs 5 oz, made of a new polymer. This is a massive improvement but costs you double of a normal backpack. So now you have to price it at double the price at retail.

So on Amazon, every backpack is $50 and yours is $100. However, photos can't convey that your backpack is 1/5 the weight as all the others. So nobody clicks on it and it gets poor sales. In addition, nobody has ever searched for ultralight backpack because it hasn't existed. So now you are bidding on people searching for regular backpacks in hopes that some of that traffic will pay more for an ultralight one.

Ask yourself, if you were just starting out with your $5k. Which is the less risky path? For me, I'm going with a little more risky stuff now because I can afford it and because I have experience. But when I was teaching my clients, I would tell them to go with the least risky path to get started.

And BTW, my businesses generally become streamlined after a few years and I have plenty of free time so I start another business. This is what I do for fun. If you want to talk a high magnitude business, this is my main business. This is my baby that I run and think about all day every day. When I need a break, I go work on my other businesses as a hobby.

 

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[AgainstAllOdds]

Now onto theory...

Here's why I think "selling on Amazon" is one of the worst business models out there:

• Everyone knows how much you sell
• Everyone knows what you sell
• Everyone knows what you sell it for
• Everyone knows who you sell it to
• With a little research they know what you buy it for
• And with all that... they can compete with the few clicks of a button.

My theory:

Any product that has high margin will eventually be eroded on Amazon. By selling on Amazon, you're willfully providing data to your future competition. If your product is not protectable, then it shouldn't be on Amazon.

Who will end up competing against you is anyone for whom it's worth it to compete. This either means: someone that has the economies of scale to compete, or someone willing to work for a lot less.

The people working for a lot less are typically not even in the U.S.

If the average person is making $10 an hour on Amazon, then why do you think that is? It's either because most people don't make the calculation on how much money they actually make, or it's because people overseas are ecstatic to make $10 an hour living in China/India/etc.

 

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[Benjamin Kuflik]

The purpose of this thread is to present real, concrete facts and numbers on why starting a business on Amazon might be the absolute dumbest, lowest ROI thing you could do. It's not based on anecdotes. It's not based on hypotheticals. It's based around numbers published by one of the most pro-Amazon sites out there: JungleScout. However, instead of presenting it the way JungleScout wants to, I'll break down the numbers into what they really mean.

A quick summary: The average person fails at Amazon. Of those that succeed, the average person makes $9,000 a year at $10 per hour. To get there, they invest 10+ months of their time, and $4,000. Amazon has reached the point of "Uber" where it has misled people into believing that they're starting a real business that's generating real returns - when in reality the average seller is slaving away at $10 per hour.

In later posts, feel free to share theories and anecdotes. The Amazon-brainwashed crowd, feel free to post emotional responses and select anecdotes. In this post, I'll dive right into the numbers.

Before we begin, let me note the inspiration for this thread: @jpanarra's "New Sellers Earn Between $26,000 To $810,000 Per Year In Profit" - a thread based around data that was taken from the following primary source: How Much Money Do Amazon Sellers Make? | Jungle Scout. I was originally going to write a quick reply to his post, but as I started looking at the language and numbers, I started breaking them down and noticed exactly how bad they really were. That's how this thread was born. If the language is a little off, note that it was originally intended as a reply before the data became valuable enough to make its own thread.

So let's get to it.

First, let's start with the note that the data is published by JungleScout - whose primary incentive is to get more people selling on Amazon. Next, let's look at exactly who the data is based on:

"Between November 14 and December 10, 2019, Jungle Scout surveyed 2,063 Amazon sellers about their experiences. This article references responses from 1,046 experienced Amazon sellers who have more than a year of selling experience and at least one live product listing."

These guys literally surveyed 2,063 people. Decided that half of them suck and don't support their findings. Tossed them out, and kept only half the responses, 1,046 sellers that had attained "some" success.

Why?

Because the 1,017 others didn't fit their narrative and PR push.

If you look at what that actually means, it means that over 50% of preselected Amazon sellers (that were serious enough to have a JungleScout account), fared worse than the data that will be presented below. Add to that all the people without a js account, all the people that have already failed, or those that will fail, and you're left with a very high percentage of sellers that have been huge disappointments.

Of the 50% left, they further fudged the numbers using misleading statements and improper calculations. Let's start with an example of one of those statements:



This statement at face value looks impressive. Here's what it actually means:

• 32.8% of sellers make between 0-10%
• 31.2% of sellers make between 10-20%
• 36% of sellers making profit margins above 20%

And here's what that means in terms of average person...

View attachment 29562

Using the chart above, it means that the median profit margin per Amazon seller is 15% (and note: I said MEDIAN, not "average" or some bullshit that Jungle Scout will use to change perception). That's from the product. Not net after including R&D, branding, EMPLOYEE costs, and all other costs. If you factor in those costs, then the true net margin will be a lot lower.

Is that still impressive? Could be. But is it as impressive as the statement that they built around the data? Definitely not.

Next, let's see how they present sales numbers:



Another quote that seems incredibly impressive. In reality, far from it.

That's what the article presents for sales numbers. Let's see what these numbers actually mean in terms of sales percentiles based on this statement:

• 0 percentile: Lose money
• 24th percentile: $1,000 in sales per month
• 80th percentile: $25,000 in sales per month
• 99.9th percentile: $250,000 in sales per month

From their statement, they made you think that 1 in 5 sellers do $250k+ in sales per month. However, one in five people don't do $250k in sales per month. One in a hundred does. The exception to the rule. The outlier.

To dive deeper, luckily for us, JungleScout was naive enough to publish their full data:

View attachment 29563

So using this info, we can continue and break down the data even more into what it actually means:

2% don't know their sales, so we'll just add them into the lower tier group (likely wantrepreneurs), making the rest of the percentiles as follows:

• 0-17th percentile: Make under $500 in sales (aka - lose money)
• 17-26th percentile: $500 to $1,000 in sales
• 26-48th percentile: $1,000 to $5,000 in sales
• 48-61st percentile: $5,000 to $10,000 in sales
• 61-76th percentile: $10,000 to $25,000 in sales
• 76-85th percentile: $25,000 to $50,000 in sales
• 85-92nd percentile: $50,000 to $100,000 in sales
• 92-97th percentile: $100,000 to $250,000 in sales
• 97-99.9th percentile: $250,000+ in sales

The average person (50th percentile) makes $5,000 in sales per month. Think about that.

If you don't understand managerial or financial accounting, then you'll assume that the number is good. Afterall, the average person doesn't "make" $5,000 at their job every month. Amazon has to be the way. Or does it. We have to ask the next question...

So what's that mean in terms of profit per year? Not sales, but profit.

If we use JungleScout's bullshit metric, then that's a ton of money. If we use the median profit margin of 15% (which it is according to the chart above), then here's what that means:

• 0-17th percentile: Lose money a year.
• 17-26th percentile: $900 to $1,800 in GROSS profit per year
• 26-48th percentile: $1,800 to $9,000 in GROSS profit per year
• 48-61st percentile: $9,000 to $18,000 in GROSS profit per year
• 61-76th percentile: $18,000 to $45,000 in GROSS profit per year
• 76-85th percentile: $45,000 to $90,000 in GROSS profit per year
• 85-92nd percentile: $90,000 to $180,000 in GROSS profit per year
• 92-97th percentile: $180,000 to $450,000 in GROSS profit per year
• 97-99.9th percentile: $450,000+ in GROSS profit per year

The average seller grosses $9,000 per year from their Amazon business.

And I know you wantrepreneurs will say "Yeah, but look at the top brackets, those guys are killing it". Yeah, they are, but how much are they spending on employees?

Those guys that are doing $450,000 gross per year? How many employees do you think they have? And how much money do you think they're actually putting into their pocket end of the year? I won't answer this question since there's too much variability, however I will give you concrete data for the next point.

"Ok, so $9,000 a year. That would help me a lot with my life. How much do I have to work in order to make that money?"

Here's the breakdown from Junglescout:

• Fewer than 4 hours per week: 13%
• 4-10 hours: 24%
• 11-20 hours: 20%
• 21-30 hours: 15%
• 31-40 hours: 10%
• 41-50 hours: 9%
• 51-60 hours: 3%
• More than 60 hours: 6%

What's that actually mean in terms of percentiles?

• 0-13th percentile: 0-4 hours per week
• 13-37th percentile: 4-10 hours per week
• 37-57th percentile: 11-20 hours per week
• 57-72nd percentile: 21-30 hours per week
• 72-82nd percentile: 31 to 40 hours per week
• 82-91st percentile: 41-50 hours per week
• 91-94th percentile: 51-60 hours per week
• 94-99.9th percentile: 60 hours + plus week

The average person works close to 20 hours per week. That's what the means. For argument's sake, let's estimate that down to 18 hours per week.

The average person works 18 hours per week on their Amazon "business" to make $9,000 a year. Still worth it?

Let's break that down per hour:

18 hours per week * 50 weeks [two vacation weeks] = 900 hours per year.

$9,000 / 900 hours = $10 per hour.

The average "successful" seller works at $10 per hour to make $9,000 per year.

But wait... that's not all folks. There's also a startup cost!

You have to research Amazon, learn the Amazon skill sets, learn how to import, pay for courses, samples, moulds, manufacturing costs for products that you'll mess up and have to throw out, etc.

That all takes money and time.

How much money and time? Here's the breakdown from JungleScout:

They asked their sellers "How long does it take to become profitable on Amazon?":

• Profits within 3 months: 22%
• Profits within 3-6 months: 22%
• Profits within 6 months-1 year: 23%
• Profits within 1-2 years: 13%
• Profits within more than 2 years: 3%

The median person took over 6 months of time to become profitable. My estimate, is around 9 months for the 50th percentile mark.

Disappointed?

Let me disappoint you further.

Here's the data set when looking solely at people that started selling in 2018 and 2019:

• Profits within 3 months: 16%
• Profits within 3-6 months: 23%
• Profits within 6 months-1 year: 24%

For people that jumped in recently, the time to be profitable increased significantly. My estimate for the average: 10 months.

Oh, and to add even more salt: the data above doesn't include sample, research, or studying time, the entire wantrepreneur phase where you're taking courses and reading threads on the fastlane forum.

And note: "Time to be profitable" can otherwise be written as "Time to stop losing money". Because that's what it really is. It takes the average person ten months to stop losing money on top of whatever they spent on courses.

So how much money do people "invest" to get started on Amazon?

Here's how much JungleScout users spent:

• Sellers spent less than $500: 17%
• $500-1,000: 12%
• $1,001-2,500: 13%
• $2,501-5,000: 18%
• $5,001-10,000: 21%
• More than $10,000: 21%

The median person spent about $4,000 to get started selling on Amazon.

So all in all, using JungleScout's data...

The average seller spends $4,000 and 10+ months to get started on Amazon. Once they're up and running, they can expect to make $9,000 a year at $10 per hour. From that, they have to subtract out employee costs, and other expenses, likely netting them a lot less.

Oh ... and that's if you're successful. If you're in the 50%+ category of people that JungleScout deleted from its "data set", then just expect to lose money altogether.

Amazon still sound cool? @MJ DeMarco

You took real data and showed the true side, however that doesn't mean you actually presented selling on amazon correctly....

I sell on amazon very successfully (although it takes a lot of time to become successful, to become the top 1% - Just like in every business...)

I am more than glad to show you some numbers/calculations and arguments why you post is inaccurate.

I wonder if you sell on amazon and how well you know the business??

You and others following here should understand - Jungle scout is the #1 place any bored or unemployed person goes to, they are the number one spot for all the "get rich quick guys" - most (I would even say as much as 99%) of JS clients are people that belive the BS that you can invest $500 todays and cash out after 6 months with a million dollar profit per month!

So although you presented the data of JS well, you didn't really present the amazon business correctly.

Like @MJ DeMarco pointed out, its a platform, its a site that people come and people trust, - If we want to have a viable business for the long run, we need to innovate, provide value, brand and protect well, market well, diversify (other platform, email lists etc.) and so on.

Only a idiot would think its a push of a button and we make a million dollars.

If the traditional offline retail or the real estate market would have such a low entry barrier {$39.99 per month for an Amazon account and $99 for JS) then you would also have 2 Million people trying and most of them failing!!!

I am working on amazon for 4 years already - this last November we launched a new brand - Our total landing costs is $60.01 (Cost of goods, Shipping, Duties) we are selling it for $149.97 - amazon takes $25.57 - so our net profit is $64.4 - we sold about 30-40 units per day over november and mid December - I will let you calculate the total.

Best part? 0 Work! - BUT I did a lot of work the last 4 years to be able to pull this off - once you can do it, you can do it again and again, and easily scale, and have healthy exists.

Obviously, this is only part of the story, we invested in innovations, branding, design, and marketing, and so much more,

In the end Jeff bezoz did us an amazing favor allowing us to take advantage of the following, infrustructure and trust he built.

Its up to us to see through the BS (and by that I mean the meaningless promises of JS telling you, you can make a million dollars in year ) and putting in the effort to build a real business.

All in! Amazon is a tremendous business, but the business is not in amazon, amazon is a platform, you need to build the business, building a business is hard, takes times, costs money and takes a lot of consistent effort - if your not up to the challenge, go work a 9-5 but dont blame amazon for anything!!! (although you CAN blame JS and all these other Scammers gurus out there )

 

[biophase]

Technically, you can convey the weight of the backpack through images. A picture of each backpack on a scale or video on Amazon.

It's a response like this that makes me think that you've never sold on Amazon before. Somebody looking for a backpack is scrolling and only seeing your main photo. That photo will have to convey that your back is lightweight somehow and make the person stop scrolling.

If you are hoping for a click and then going to your listing and then looking at your other images and then watching your video, you are going to lose on Amazon.

You are right about the doubling of costs which is why I don't sell on Amazon. It locks you in on commodity zone where people are only competing on function-based value.

You aren't locked into this just because your price is higher. This only occurs if price is the only play in your playbook. If this is the case, how come some people can sell a backpack for $300 and others for $80?

The fact that you are considering "price" as a value skew tells me this is in commodity zone. Amazon sales channel suppresses the abstract value (brand) which locks you into the commodity zone.

I don't see where I consider price a value skew. In my example the price was in line with other backpacks. I wasn't trying to undercut the current backpacks on the market.

One of my products is literally 5x the retail cost. But why does it sell? Because it has abstract value on my own website. I don't even consider the price of competitors anymore.

I find this hard to believe considering the content of your past posts. You go from traveling around yard sales to selling a 5x high value product in 4 months? If it is true then good for you, but I'd like to see a screenshot.

But for me personally, I do click on the pricest option if I do a search. I click because I am wondering "What makes this backpack double the price? What is so good about it?" Although quality and price don't always go hand in hand, I got burned many times buying the cheaper product.

You may do this, and so may others, but you need to determine if your customers will do this. I learned this lesson about using my personal bias as an indicator of customer tendencies in 2008 on my first ecommerce store.

Gotcha, as @AgainstAllOdds stated the work ratio from doing these smaller businesses isn't worth it. I feared that you these low value adds as your main business...

I don't know how you value if a business is worth it or not, but I just posted a $2.5M screenshot for my so called low value business. And here are two more off Amazon Shopify store screenshots... If only I could make a high value business... I don't only do Amazon you know.

As for the $5k...It would be hard for me to justify dumping $5k at scale for a product that isn't much different than the rest with a single value add, since you need to hit MOQ. If it doesn't sell, you just stuck there with essentially nothing. But if it does, your return can be quick. These businesses are just short term thinking and a small policy change can destroy them. Which is why I don't like that avenue.

What I am doing now is spending $5k on materials that can be used the prototype numerous iterations. The $5k is now many product iterations rather than at scale for a single product.

It sounds like your definition of a value add is to make alot of changes to a product and then launch. In my experience, this is way riskier because you don't know what the market will want. Many people can't handle the massive change. Again, referring back to my simple example. Maybe all the dude wants is a "backpack with a place to hold their airpods case" at a reasonable price. It's that simple. What are the chances that the same dude is going to want "a backpack with a place to hold their airpods case AND a superlight backpack?" Adding more newer innovations actually decreases your pool of buyers.

But again, what do I know...

 

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[AgainstAllOdds]

By the way, I'm not saying there's no money on Amazon. But for the average person there is not. The average person that starts an Amazon business today will fail and will waste their time.

Very few people hit those top percentiles where they're making anything significant.

To get there, you need to think different and act different.

@biophase and the guys from his program are making money. Doing things that other people aren't has proven to create success.

If you're deadset on Amazon, follow what they're preaching.

If you're not yet on Amazon, and thinking about it, then my suggestion is to not even start. There's a lot easier ways to make money. The odds are stacked against you and consistently getting worse.

 

[MJ DeMarco]

we may terminate your account at any time, with or without cause. This termination is final and not subject to appeal. "

Translation: We can destroy your livelihood when we feel like it, and without any just cause, recourse, or appeal. Yikes, truly puts a feather in the "amazon sucks" hat.

 

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[amp0193]

1) Build a business built on amazon as your primary (only?) sales channel. If you do well, and manage to beat the race to the bottom, sell it for a whopping 2-4x annual net profit through empire flippers.


2) Build a consumer products brand, with customers that you own, and a website that gets the bulk of your traffic, and social media presence and media/influencer coverage, with traction and massive scale potential, and maybe Amazon as a non-primary sales channel... and get acquired for 3-5x annual revenue.


What is your end game? Which will help you reach your goals?


I was very lucky, and made quick cash over 2.5 years with #1. For some, maybe that's enough. But for me, it allowed me self-fund #2.


But with a good concept, a good team, and good strategic partners, you can skip #1 altogether.


People who achieve some success on Amazon, and try to then build a business off of it, like a second thought, are doing it backwards. Build a strong brand that attracts zealot customers, and if some of them want to go buy on Amazon, be there and allow them to do so.

 

[francevalue]

Great post! Add to that they can terminate your account anytime they want, and you're screwed!

 

[Jon L]

This was my experience on Ebay 10 years ago or so. I made $18k (actual profit) in a year's worth of work. That was 3 hr/day answering customer email, dealing with other issues, buying/listing product etc. That worked out to $20/hr, but still, not worth it for all the stress involved. My largest month, I shipped 2000 orders. I averaged 1 email per order from a customer. I would have made more money taking a second job.

I used a contract warehouse to do all my material handling. They said that I was by-far their largest customer. All the rest were small-er time ebay sellers and other types of companies. I remember thinking, 'if I'm big time, what the hell is a small time operator?'

 

[biophase]

Sure. Amazon can win when you first launch.

But in 3 months, won't you have 12 folks selling the same stuff you are (maybe with some color variations) with 12 different logos that they got on Fiverr?

Serious question.

Have you ever seen the scene in Breaking Bad where Walter White says, I'm the one that who knocks?

View: https://www.youtube.com/watch?v=wMEq1mGpP5A


Ok, it's a little extreme of an analogy. I'm definitely not that company. However, that is my attitude when going onto Amazon.

You are worried that your product will get knocked off in 3 months. I'm the one that is stealing your sales away in 3 months. However, it isn't because I knocked off your product. It's because I came into your market and filled some gaps in the market.

It's impossible to NOT copy many parts of a product. If I decide to sell a backpack, it's going to have many of the same parts of all the current backpacks. But a few parts will be different. Maybe you forgot to put an airpod case pocket into yours because it was designed 3 years ago.

Below is a new company that I launched in November. This is not an innovative new product. It's been around for 30 years. In fact, I bought one of these in 1997 and based my design on it.

Sales were pretty good for Xmas. Before you say that this was due to PPC, take a look at my ACOS. Ranked on the front page within 2 weeks. Very low competition.

I'm not worried about someone else coming in and knocking it off because there are already lots of these on Amazon.

I doubt any new AMZ sellers will copy it and I will tell you why.
1) The product is huge. Amazon charges me $17 just to fulfill it.
2) The product is huge. Each carton only has 3-4 units.
3) The product is huge. I need a warehouse to store it.
4) The MOQ was high. My first order was $20k.
6) The product is winter seasonal (selling months are only November to April)

It does have direct from China competition. But even for China they aren't going to ship and store a ton of these at Amazon's current storage prices. They would need to find storage in the US.

So there's obviously a gap in the market here. But a novice or an experienced AMZ person isn't jumping into this to store a bunch of stuff at a warehouse, pay rent and then sell for 5 months out of the year.

So why am I doing it? Because it's actually semi-easy money in the winter. The goal is to find a complimentary product for the brand that can do the same in summer. Then they balance each other out to become a viable year long business.

 

[biophase]

With all the above said, I am happy to hear that people don't think Amazon is easy. I'd gladly welcome less new sellers. But what I would really love is less experienced sellers creating new businesses because it helps me out. Guess what else is great? People selling their seasoned FBA businesses to private equity or inexperienced buyers. They would just run an FBA business into the ground really quick. If I was ranked #2 on a product and then the #1 sold to private equity, I'd be super happy because I know that they will cut costs to maximize profit and I will over take them in a few months.

All this means is less competition in the future.

 

[samuraijack]

Yup...blown away how people don’t realize this yet. Not just Amazon, but literally all selling platforms, you can’t build a real business or have high margins at all. Completely unsustainable.

I saw maybe a couple months ago that Nike is pulling all products off Amazon? Whenever I see brands whose value is primarily branding, on Amazon I cringe. Finally someone woke up at Nike. Or maybe it was the counterfeit issue.

3rd party sales platforms are akin to retail distributor relationship. There is a reason you never see Gucci in Walmart or Amazon. The brand does not align. Saks Fifth Avenue, brand alignment works.

These products on Amazon have one value skew, function-based 99% of the time. Function based value especially in e-commerce is too easy to duplicate. Just pay for tooling, boom I just destroyed your business.

Real businesses have avalue skew of both function, brand, and quality. None of these are cheap if done 100% correctly.

Everytime I hear someone starting an Ecom business for like $3k or something and not planning to invest beyond that. I know it is gonna be garbage.

This guy again.

How much sales have you done?

 

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[MJ DeMarco]

Amazon is a channel, not a business.

And those who do well on it experience a nice CAGR. I subscribe to many "business for sale" websites where these businesses are listed, including their numbers. Many are started with little cash and sell for 150K in a matter of years, sometimes months. Those are impressive numbers.

Here's just a bit of what I was referring to.

This was just today. The CAGR numbers are based on a $10,000 startup cost which I believe to be on the high-side. Obviously these numbers are not "average results" from "average people" who buy into average ideas.

 

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[Envision]

Amazon sucks for those that suck.

Im with @biophase on his approach and his mindset towards competition. I started on amazon with 5k, all the money I had as a kid... and turned it into a multi million dollar brand in 4 years. I dont know any other platform, business model, industry in the world that will allow that.

The stats on your post are of what average people (wantraprenuers) most likely doing retail arbitrage, selling white label items, or doing what ever money making product came across in an email from jundglescout took.

A real entreprenuer will see a niche/need and envision a brand, image, ethos into a line of products and leverage amazon for its traffic while reinvesting into their products, branding, and other sales and marketing channels.

I think if you had stats on the difference between the two above it would show a higher success rate with the latter. I dont know one person from this forum that is successful in their amazon/ecommerce business without a BRAND and a TARGETED NICHE. I can think of roughly 10 people who run 7 figure+ ecom companies literally from this forum (primarily started on amazon) and every single one has a brand with a product line.

 

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[MoneyDoc]

The biggest problem with this thread: You're using Junglescout numbers. Junglescout is not Amazon. It doesn't matter how you look at the numbers, or how they're flawed. It's not Amazon data. So how can anyone say "Amazon sucks" when they don't really know what Amazon sellers are doing?

The biggest problem people have is they don't know how to utilize Amazon as a sales channel. The physical products business is just another business like home development is. You can't discredit an entire industry based off some numbers a SAAS platform posts about a certain sales channel. A lot of big brand names were started on Amazon. The reason they became big? They knew how to utilize Amazon as a sales channel.

No disrespect, but I think this thread is meaningless.

 

[jpanarra]

This is the reason why I brought this article to the forum. I knew there were more experienced people that could see through the smoke and mirrors.

It seemed a bit toooo optimistic for me and I had doubts due to the article coming from jungle scout. I guess i was a bit hopeful and wanted to share.

@AgainstAllOdds thanks for taking your time and breaking this illusion down for us.

 

[Walter Hay]

Thank you @AgainstAllOdds for what I see as your exposé of JungleScout. I have posted many times about the folly of using such a system as the basis for setting up an Amazon based business.

JungleScout have set themselves up as high priced Amazon Gurus, and in numerous posts I have dealt with the sad fact that using JungleScout to find "hot selling" products leads inevitably to entering an extremely competitive arena, with hundreds or even thousands of sellers offering the same product. The result is a race to the bottom.

This would help to explain why JungleScout's average devotees perform so badly.

I don't intend offering a critique of Jungle Scout, but I will make just a few comments. Their blog linked from YouTube is the slickest presentation I have seen among the numerous blogs by Amazon Course marketers.

As all the Amazon gurus (with one exception) tend to do, they seem to feel obliged to teach product sourcing and importing, and that is a major problem.

Just three examples:

• As is universally taught by those who don't know any better, they teach the merits of only buying from Gold Suppliers on Alibaba. See my AMA to learn why you should not rely on the Gold Supplier status.
• They teach reliance on Trade Assurance for protection. There is a detailed post on my AMA warning against this, and because Alibaba continually change their almost incomprehensible rules I update that subject in my annual book revisions. They even recommend communicating outside Alibaba's communication system! Absolutely contrary to Trade Assurance rules.
• They teach that new buyers should get EXW quotes!!!! Potentially disastrous advice.

I can't just leave it there. Having warned of the risks of using JungleScout, I feel obliged to as delicately as possible suggest a far better, much lower cost, and safer, alternative.

DISCLAIMER: Because Jim Cockrum's Proven Amazon Course (PAC) gives new subscribers a free copy of my importing book, I sometimes use an affiliate link to direct people to PAC. I won't post it here. Inclusion of my book as an integral part of the PAC is the reason why they are the one exception I mentioned above. Their course includes reliable guidance on both product sourcing and importing.

A major factor in me aligning with PAC is that Jim's paid support team handle most of the support for people who have questions to ask after reading my book, and that takes a huge burden off my shoulders.

If you check out the PAC site you will see a mind-boggling quantity of testimonials, and a BBB+ rating. The testimonials are, like the ones on my importing book site, provable to the FTC if anyone challenges their authenticity.

Annual cost for following the advice in the JungleScout blogs substantially exceeds the once only price for PAC. You have to subscribe to a costly JungleScout program to proceed. But as AgainstAllOdds' examination has shown, the extra cost of their course is mediocrity, average results if you are lucky, and less than average in most cases.

Walter
[/QUOTE]

 

[biophase]

1) Build a business built on amazon as your primary (only?) sales channel. If you do well, and manage to beat the race to the bottom, sell it for a whopping 2-4x annual net profit through empire flippers.

2) Build a consumer products brand, with customers that you own, and a website that gets the bulk of your traffic, and social media presence and media/influencer coverage, with traction and massive scale potential, and maybe Amazon as a non-primary sales channel... and get acquired for 3-5x annual revenue.

What is your end game? Which will help you reach your goals?

I was very lucky, and made quick cash over 2.5 years with #1. For some, maybe that's enough. But for me, it allowed me self-fund #2.

But with a good concept, a good team, and good strategic partners, you can skip #1 altogether.

People who achieve some success on Amazon, and try to then build a business off of it, like a second thought, are doing it backwards. Build a strong brand that attracts zealot customers, and if some of them want to go buy on Amazon, be there and allow them to do so.

All I know is that I am absolutely using Amazon in any new business that I start. The real question you need to ask yourself is how am I going to sell my product, not where.

 

[DeletedUser0287]

Yup...blown away how people don’t realize this yet. Not just Amazon, but literally all selling platforms, you can’t build a real business or have high margins at all. Completely unsustainable.

I saw maybe a couple months ago that Nike is pulling all products off Amazon? Whenever I see brands whose value is primarily branding, on Amazon I cringe. Finally someone woke up at Nike. Or maybe it was the counterfeit issue.

3rd party sales platforms are akin to retail distributor relationship. There is a reason you never see Gucci in Walmart or Amazon. The brand does not align. Saks Fifth Avenue, brand alignment works.

These products on Amazon have one value skew, function-based 99% of the time. Function based value especially in e-commerce is too easy to duplicate. Just pay for tooling, boom I just destroyed your business.

Real businesses have avalue skew of both function, brand, and quality. None of these are cheap if done 100% correctly.

Everytime I hear someone starting an Ecom business for like $3k or something and not planning to invest beyond that. I know it is gonna be garbage.
Edit: These are the type of people to be like I got $500,000 sales. Profit is like $30,000

 

[Kak]

There's no doubt that Amazon as a channel is a profitable avenue. However, the question is: how much profit relative to work? And how does that ratio compare to other avenues? There's dozens of channels that are a lot higher EV for the majority of products.

For ecommerce businesses, something like Instagram influencers + Shopify is a lot more protectable and scalable. There was a guy that popped back on here a few weeks ago doing $20M+ annually just through that.

Then there's offline avenues like tradeshows. You can build a 6-figure business through the right single tradeshow. How many posts are there on here about tradeshows? Maybe one or two total? And that's my issue with Amazon as a channel. Too much attention is given to it relative to channels that give you more control and long-term profit.

B2B Sales. Offline distribution. Another huge product money maker that rarely gets posted on here.

Middle-manning deals for distributors through 3PL warehouses. Another one that gets looked over in favor of "dropshipping".

E-Commerce + Direct Mail for products that are recurring revenue.

Creating look-alike audiences for consumer traffic and directing it to yourself...

The list goes on.

As @amp0193 and @Kak said - there's a reason why Amazon businesses are sold and bought at 2.5x annual profit. The income is unstable and fleeting. Have a profitable business? Great. How long before someone cuts your profits in a fourth? How long before a Chinese factory sells at your cost since their model allows them to? The attractiveness and ease of the channel comes at the cost of inevitable future competition.

The bubble burst. I have been saying it would for a few years now.

Once upon a time people used to make real money in affiliate marketing.

They used to make money advertising to an email list.

People used to make money in Florida building "investment homes."

Then the music stopped.

History is full of people that thought they were going to ride a wave of money forever.

Those of you that say it is a place to launch your new brand... Good luck. The reality is you will start ranked among the other chumps that saw dollar signs and are trying their private labeled crap out. You will be FORCED to either sell below cost and hope someone finds you just to lose you money. OR you will be FORCED to buy advertising. But the other chumps and the people with actual converting listings were already FORCED to do that. So your spending will be 100% or more your ACOS and you will be hemorrhaging money.

Sounds like an ugly way to "start out."

I don't know about you guys, but I like to make money and being FORCED to do stuff isn't my idea of a solid business model.

It is EASIER to make money NOT doing what everyone else does.

Notwithstanding guys like @biophase who have obvious in and out knowledge of the entire platform and how to consistently smoke newbies.

Amazon is not easy. It is NOT for beginners anymore. You will loose your a$$ if you don't take this as serious as the pros do. Even if you somehow find a very experienced mentor that isn't already this bearish... It is still a very tough road.

 

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[AgainstAllOdds]

Let's continue with the JungleScout data set.

They asked sellers "Will selling on Amazon be profitable in 2020?"

And here's the response that they got ...

Nearly all sellers (92%) said they plan to continue selling on Amazon in 2020, and 72% are optimistic that selling on Amazon will be a viable way to make money online in the future.

These are sellers that have been on Amazon for over a year.

If you flip the question, then here's what it means:

28% of sellers that are currently successful on Amazon, don't think that there will be money to be made on Amazon in the future.

Imagine walking into 4 brick and mortar stores and asking people if there business would still be viable in three years. If you get over 5% of people saying no, then I'd be surprised.

 

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[Vadim26]

If someone's whole strategy is purely based on what channel they are going to sell - they are indeed doomed to fail.

Starting from the most important:

1) Product;
2) Audience;
3) Creative;
4) Copy;
5) Sales channel.

Notice where the sales channel is.
The right product marketed to the right audience will always be needed.

DO start on amazon if you have a great product solving a problem (not spatula etc) just based on the sheer sales volume of this channel.

The thread is geared towards a simple person just starting out, who isn't as business-savvy and looking to dropship someone's product (ie not looking to put effort, and wants to get easy money).

Then yes, stay the hell off Amazon and sell facial steamers on shopify. Much easier.

To add: considering the size of amazon bandwagon out there with all the people taking courses on how to "game" a system and improve someone's product, the data doesn't discourage me at all. Quite the opposite, actually.

@biophase and the guys from his program are making money. Doing things that other people aren't has proven to create success.

Do You Want To Do It The EASY Way, Or The HARD Way?

 

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[Vigilante]

The more I use amazon (as a consumer) the more wary I'm getting because you just can't trust what you are actually buying anymore.

It seems like each timeI look up an item I would like to purchase, there are dozens of knock offs and cheap versions that all have the same stock photography from Ali Baba. Plus it's to the point that I don't trust the reviews nearly as much as I used to. There have been several times when I receive a product and there is a little slip of paper that tells me I will get a free gift if I give them a 5 star review.

Obviously they don't have faith in the product. They assume that the only way someone will leave a positive experience about the company is if they are bribed to do so. I don't blame them for gaming the system, but all it does it hurt consumers.

I will continue to use Amazon, but I really don't like the direction it's going. I used to trust it (it being the type of seller on the platform) a lot more than I do now. Articles like this just cause more "get rich quick" people to jump in and flip anything and everything they can find with no regard to quality.

I still believe that even though it is a slower route, that authentic reviews from real customers is the way to go. Maybe that makes me a fool, but I want to build real businesses based on good consumer value.

 

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[biophase]

Instagram influencers
Then there's offline avenues like tradeshows.
B2B Sales.
Middle-manning deals for distributors through 3PL warehouses.
E-Commerce + Direct Mail for products that are recurring revenue.
Creating look-alike audiences for consumer traffic and directing it to yourself...

All the above things are what you are supposed to be doing in addition to AMZ ppc. but most AMZ sellers think of FBA as their whole encompassing business. They don't do any of the above.

Some of my AMZ clients would launch and just run PPC. I'd check their IG and FB and see no posts in 3 months. All they do is complain about PPC costs being too high. You have to get outside traffic to your listing.

 

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[biophase]

Based on your example, is this really the amount of value you add to a single product? This reminds of the book, Zero to One by Peter Thiel.

No wonder why you have to start so many brands..., seems like you are choosing value additions that provide value in small magnitude that can be duplicated easy. Then the next guy comes in and easily copies that single addition of an AirPod Case.

Why not magnitude over volume, so you don’t have to constantly dink around with making another low value addition brand every damn month.

A magnitude of 10 rather than magnitude of 1

Edit: I wouldn’t even call these“brands,” but labels.

That was an example, but that's not how I add value. It was meant to show that you don't need to add much. However, this tiny piece of value can make someone on Amazon buy your product over a best seller. That is all you need to get your foot into the door.

Someone that starts a simple company with $5k. Gets sales with their "airpod" backpack. Makes $10k. Takes the $10k launches "airpod" backpack version 2 and then "iphone" fanny pack. Makes $20k. Launches "airpod" backpack version 3 and then "iphone" fanny pack version 2 and "ipad" messenger bag. Eventually you have a brand doing $100k a month that you started with $5k. At this point, who cares about the knockoffs, you have a brand that should have a decent following.