Amazon FBA Contingency Plan: What Happens If Fulfilment By Amazon Goes Away?

In this blog post, I am going to answer the question, "What comes after Amazon FBA?"This was a great question which came from freearrob, who asked this,

"what contingencies can be put in place for FBA businesses should Amazon FBA services stop?"

What do we do if Amazon FBA services stop? This is a great question. There are a couple of ways at looking at this, and I am going to go into a lot of depth on this, because this is a big question which I am going to drill down on, and talk about the short term and the long term. What do we do to protect ourselves in terms of the security? What do we do to get the control back, and that we can be in control of our own lives?

What is the Potential of Amazon FBA to Go? And What Happens If Something is to Occur to Your Business?

There are a number of ways to discuss this. The first thing is Amazon as a business. What is the potential for them to go away? This is going to be very slim. Amazon reported that they have got 300 billion dollars revenue in a calendar year. This is a staggering amount, which we can't even comprehend how many zeros that is, and how much revenue they are producing every single day, month and year - it is absolutely mind blowing. 

The statistics show that 60, 70 and even 80 percent of that revenue, comes from third-party sellers like you and I. Everyday people like you and I, who started their side-hustle, their side-business, or possibly full-time business now. There are up to 8-figure Amazon sellers out there. Amazon has built a machine.

Of course, there is always a possibility that something could happen to Amazon. The way that technology is advancing, the way that we are able to evolve technology is incredible. The great thing is that Amazon appear to be at the cutting-edge of technology advancing, the automation that they have put in place to focus on the customer, the customer experience, making sure that the customer become raving fans and customers of theirs.

You and I are going to go to Amazon to order products. We know that they are going to deliver the next day, or possibly even the day same, depending on where you are getting the delivery from. Everyone knows Amazon.

 Are Amazon going to go anywhere anytime soon? No, I don't believe so. Who knows, 10 - 20 years from now, as technology advances, as we go into the future, into the unknown, then who knows. But we haven't got anything to worry about anytime soon. The more pressing question here is the other side of things - what is the journey? What is the life journey of an Amazon seller? Then, what is the contingency in terms of what if we actually lost our business?

The 3 Phases

Phase 1

Let's start with the phases. Kev believes that there are 3 phases. You have phase 1. You right now have maybe just learned about Amazon FBA, or just getting started with Amazon, whether that is online arbitrage, retail arbitrage, wholesale or private label. You have just learned how amazing it all is - super practical, get your hands dirty, label products, create shipments, source and so much more, which is super exciting when you are building your own business.

You are in phase 1 - you are motivated, you are inspired, you are surrounded by other people, and you are learning about all the potential Amazon FBA has. That is phase 1.

Phase 2

Phase 2 starts when it becomes super serious. You have now built your business, you have been taking massive action every day, it is all you can think about, all you can talk about, your business is taking over your life, you have now got to a point where you have been burning at both ends, and you now need to build the business, and you are at the crossroads. Do you quit your job, or do you not quit your job?

If you want to learn more on quitting your job for your business, watch the video below:

Have you got enough money in the business to quit your job? From a financial point of view, you have to talk to loved ones, family, your partner and your friends. Are you going to take the leap into phase 2? Phase 2 is a brand new world, because now you have quit your job, you are now working for yourself, you have no boss, you have time - but now what happens, the bottleneck in time, you are working with full dedication every day, and you have got to get your business working, you have got to start building systems, you have got to start building a team around what you do - you have got to scale to the next level. You have got to start hiring virtual assistants to help you with admin, your accountancy, and you may start to end up working with senior assistants - these are virtual assistants working with you with reviewing products, outsourcing purchasing for your products, and looking at getting your own warehouse and warehouse staff.

Do you want to learn more on hiring virtual assistants and senior assistants?

You are in phase 2, which is all about developing systems. It is all about developing those systems and those teams, and you want to move onto phase 3.

Phase 3 

 Phase 3 is now when you are a business owner. You have extracted yourself, you've built systems, teams, you have got resources in place, and now you are a business owner. You are now working on the business, it is now asset for you, it is now a cash-flowing asset for you - they're the big phases.

The 3 Stages

There are more stages involved, and it is easier said than done. But, those are the big 3 phases which all of us need to aspire for, because this goes into what contingencies long term. Because the truth is, when you are in phase 1, you have got a backup plan, you have got a backup plan in terms of your career.

If something goes wrong in your business, you're alright, because you have got your day-to-day work. Yes, you may lose some money, yes you may be in a little financial debt, but the truth is, you have got a stable career to fall back on.

When you are in phase 2 however, this has changed. The whole mindset, your whole way of living has now completely different. This means that you can't just be fully reliant on Amazon. By the time we get to phase 3, we want to start thinking about what else we are doing, and this can be a wide range of things.

From a physical products point of view, you are staring now to go to wholesale trade shows, you are now developing relationships with suppliers, or developing relationships with some niche type suppliers. If for example, you have a supplier who is supplying you with toys, or you are trying to find an opportunity to get away from Amazon. You may end up with exclusive brand deals, where you are now more in control. Now, you want to start building your own website, and your own communities online. You are now able to generate your own traffic without the reliance of Amazon. This is where the contingencies really come in, where you now start to expand, you now start the next level, by trying to filter in additional sales coming from another way, apart from just Amazon. 

As you start to free up your time, and you start going into phase 3, because now you are a business owner, you can start to get yourself involved in other things. It might be a passion project which you have now, where you start your own brand online. For Kev personally, he created LifeSuccessEngineer, Kev was compelled to share his and Kylie's story, and compelled to help other people quit their job, get started online, and find their passion, mission and take massive action. So, Kev started to share what he was learning, what he was doing in the warehouse, how he is doing it and teaching how to be systematic in your business. It becomes like another business. LifeSuccessEngineer has become a new business for Kev. This is a part of a new business for him, where he is now using Amazon, and has released his own private label, which is Kev's own exclusive product. He still uses Amazon, but he just isn't fully reliant on Amazon, which is exactly where these contingencies come in. 

If you are just getting started, don't start thinking about other things. Take massive action, be motivated, get yourself involved, and commit with every single blood, sweat, and massive action tears that you have got, but once you do go to phase 2, you have got to start systemising, and you have got to start acting like a business owner, not a business operator, specifically for this moment here. Because, what if Amazon goes away, and what if Amazon FBA stops for you? You have got your life on the line, you have got your business on the line, and you have got your family on the line, and you have your responsibilities. 

Further reading:

4 Steps to Build a 6 Figure Brand

13 Reasons Why People Fail to Build A Successful Online Business

Is Amazon FBA (eCommerce) Success Possible Part Time?