As an online entrepreneur, I have experience with both of these businesses and I have strong feelings against the Amazon Seller business, and I’m going to prove it to you in this article…
Although my current businesses revolve around affiliate marketing and home business, I still have a major stake in an Amazon related product and based on my experience, I don’t recommend Amazon seller business to people who aren’t ready to lose their money.
Before we dive into the reason I don’t like the Amazon Seller business model, watch the video below to learn the basics:
Now let’s get into some details of the reason I don’t recommend Amazon seller business to new entrepreneurs and marketers (or even experienced ones!)
Amazon Dirty Competition
If you don’t have your own exclusive branded products, it’s likely that you will encounter a massive amount of dirty play from other sellers.
Amazon as a company cares more about customers than its sellers and other sellers (usually big ones) will use this to hurt your business, here’s how:
Imagine you’re selling a fidget spinner for $10 and other sellers as well are selling the same product, within the same price.
A dirty player comes around pays a dude in China to list the same product, with the same EN number but only at a cheaper price, let’s say for $2. Amazon sees the cheaper china listing as a way to improve the customer experience without knowing that the product is being shipped from China, not an FBA facility.
When a sale is made, the money goes to the China seller, and not you. In most cases, the product won’t even be delivered from China which will result in negative reviews.
With this strategy, basically anyone can ruin your entire business without any effort and unfortunately, Amazon isn’t fast enough to stop these kinds of games played by big sellers and by the time they fix the issue (usually called hijacked product), the damage is done, you’ve lost thousands of customers and got dozens of negative feedbacks.
Here’s what happens when you call Amazon to complain about a hijacker hurting your business: Amazon will ask you to buy the product, take a picture and sell it to them. Since the product won’t be delivered at all, it’s impossible to actually get it and show it to them. Explaining all of these is a nightmare and again, by the time you prove it to them, the damage is done.
Solution: Create your own brand, and sell your own products on your own website. It’s going to be much less profitable but at least you control everything and have more room to grow.
And that’s why I don’t recommend Amazon Seller business model. If you’re still eager to sell physical products, I recommend starting your own online store.