Reasons Not to Become an Amazon Seller Part 1 – Why Selling on Amazon Sucks
Jack is an incredibly valuable member of the Life Success Accelerator program and my other Facebook masterminds – Online Arbitrage Mastery and Life Success Engineer Mastery. If you missed it, check out Jack’s first article!
Intro to Series
Online Arbitrage, Golden Gaps and any sort of Amazon business venture are not for everyone. Amazon has business models that involve giving over a lot of control over to Amazon, which could make or break your business if you are not careful.
The purpose of this 2-part series is to really weigh up the pros and cons of Online Arbitrage. The unknowns that are within the dark are what cause people to dismiss the many wonderful benefits and instead sometimes choose to continue their 9-5, all because of the fear of the unknown… It’s a tragic thought and that is why I am here to leave no stone left unturned!
Become an Amazon Seller – The Side That Sucks
I would advise people against this business model as a sole income. It is not a business model that you can count on. There are risks you must accept if you are to take on the business model seriously.
Not just that there are risks, it is also very hard work! Some business models, once you set it up, then you are good to go! When you become an Amazon seller, you can also do this, but you cannot always count on earnings being fully passive.
If certain things happen (e.g account becomes suspended) then you will have to give up some of your hard-earnt time back to the business to keep your Amazon ship afloat. You can never truly separate yourself 100%*. Below, I have highlighted the 5 main reasons why selling on Amazon SUCKS!
1 – Being told to send an invoice for a product you are selling
This is an ‘oh crap’ moment for some. It means something has gotten through your vetting system for products to sell that shouldn’t have. Fixing this problem is time-consuming and sometimes unavoidable. If you are like me, you want to try and have control over all levers of your business to avoid dealing with situations like this. But this can strike you and cause trouble, even despite doing everything you can to prevent it.
Often this will happen because the brand owner may be changing their Amazon account so that they have their brand protected. This will automatically trigger all people on their listings to cough up an invoice as proof or face having to return these units to you to deal with.
Will you be banned for life from Amazon for this? Highly unlikely. You may make a loss on a few units which you have to ship in, but that will be all. Having to deal with this, however, is not a walk in the sun and it certainly is not something you want to spend your time on.
2 – Criminals and Unreasonable customers
Do you know what is really reaaallly REEAAALLYYY annoying? People who will buy from Amazon and then refund their order without sending the product back. Why would they do this? Sometimes they may have forgotten, other times there may be more sinister reasons. Go on Youtube and type ‘How to get free stuff on Amazon’ and you will find a whole host of illegitimate (some legitimate albeit) ways to get free stuff that follows the above method. Out of this, you end up out of pocket.
Criminals like this exist on Amazon and they can sometimes get away with it. Either way, if they decide to buy what you sell, you will lose all the margin on the product and a lot more. In an ideal world, criminals like this wouldn’t exist. But unfortunately, they do and because of the low risk of the internet, they can get away with it a lot easier. Being faced with one of these criminals is a problem which Amazon sellers have to deal with.
Sometimes, you will find unreasonable customers buy from you. They may give you 2-star feedback but leave no explanation as to why, or they may return something and say it was scratched even though it is unopened. Or they may file an A-Z claim without any attempt to reach you. The list goes on… These customers are a very small minority, but they do cause a headache. Another side effect of being an Amazon seller.
3 – A-Z claims
As long as you check daily the Amazon communications channel, you should be able to avoid any A-Z claims, or at least valid ones that could cause problems. This is because one of the conditions to make an A-Z claim is that the seller must have been given two business days to respond to the buyer’s message.
BUT if you do get an A-Z claim it can at first be a nightmare to try and sort out, and if Amazon get their facts wrong, it can lead you into a whole load of problems, mostly recoverable, however. This is still a pain and is still a possible problem to emerge for you as an Amazon seller.
Another reason this really sucks is that you have to make sure you are on top of all messages every day! If you are not, then be ready to risk an A-Z claim. This may be a simple task, but it is the last thing you want to deal with when with friends or family.
4 – Hiring People
The responsibility of hiring employees is one which you must be willing to commit to. You take on more responsibility because if your business fails, they have to leave, unemployed and out of pocket. If they are out of pocket, their families are struggling. Having this on your conscious would make everything 10 times more stressful because it’s not just you now.
This is the trade you must make if you are to go beyond being a ‘one-man band’ seller. It is part of the reason people can live with an almost entirely passive Amazon earning. But to do this they had to hire people. Once you hire someone, there is no going back, your business’s failure will impact their livelihood. There is no going back from this, or at least not without making someone unemployed.
5 – Accounting
Having to hire an accountant and file VAT returns every quarter (once your earnings reach a certain amount) is a huge drain on time and sometimes finances too. Especially when you consider EU, Asian, and USA as marketplaces. It can get very confusing as to what you owe to who and how to pay it. Accounting is beyond many of us who want to do Online Arbitrage, so especially when you start, be ready for a whole world of stress regarding accounting! Or be willing to trade that stress for an accountant at a price. Both choices suck but both are necessary for Amazon!
If you are to sell on Amazon, be prepared for these 5 areas. Be willing to look at them all and say “Yeah and what?” because truth be told they are all minor compared to the benefits and they are all easy to smash through.
Remember, you must be willing to make mistakes. You must be willing to put in the hard work and you must be persistent. On my part 2 of this Series you will see what sort of benefits you are fighting for, and oh boy are they worth the hustle!
Until next time,
Life Success Partner
I hope you enjoyed the first part of Jack’s series on what to expect when you become an Amazon seller! Leave a comment for us if there’s anything you’d like Jack to discuss!
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