So you’ve seen the ads, and you’ve heard the promises… but you can’t help but wonder – is Amazon Automation a scam?
We won’t lie, building your own Amazon business takes hard work and dedication.
Sure, in time it can become a lot more hands-off as you grow the structure of the business, but it’ll take an investment of time and money to give it some early momentum.
So it’s no wonder that the concept of Amazon Automation is picking up steam as people look for a way to profit from the eCommerce opportunity without necessarily having to put in the work.
But often things that sound too good to be true are… and there’s a lot about Amazon Automation you need to be aware of, so let’s break down all you need to know in this complete guide.
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What is Amazon Automation?
Amazon Automation is the most common term given to a business model that involves outsourcing the entire operational side of an Amazon business.
An individual or agency will take responsibility for launching products on the Amazon marketplace and growing sales and profit margins.
They will take on all day to day tasks involved in running online businesses – things like inventory management, marketing and managing communications.
Amazon Automation is a bit of a buzz-term and the model is also often referred to as a Done For You service, or management by a full-service agency.
The idea for the investor is that they can put up the initial investment but leave the ongoing management of the business to the (hopefully) expert operators.
The premise sounds great, but as we’ll discuss there can be some significant challenges to be aware of.
It should also be noted that the topic of this article is strictly relating to these ‘Done For You’ Amazon store services and should not be confused with automating processes in your business.
Automating your business by using tools to carry out repetitive processes is highly recommended!
What is Amazon FBA?
An Amazon FBA business involves the seller finding products to sell on Amazon, then sending inventory in to Amazon’s fulfillment centers.
When a customer buys the product on Amazon, it is then packed up and sent out from the warehouse by Amazon’s fulfillment program.
This makes the logistics side very hands-off and allows the seller to focus on product research, development and marketing.
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Why has Amazon Automation become popular?
With selling on Amazon becoming more competitive in recent years, many agencies and service providers have begun to offer their expertise in running stores on the owner’s behalf.
The idea of owning a cash-generating business run by industry experts with little work needed is of course attractive to most people.
It’s also an attractive model for the service providers as they can potentially grow income quickly with the use of other people’s money.
The combination of the two sides of this equation have caused the model to gain a lot of traction, but all may not be as it seems.
How much does an Amazon Automation store cost?
Any successful business will require upfront investment and that is no different for Amazon sellers starting their own eCommerce business.
There are a few different costs involved in taking part in an Amazon FBA automation business.
FBA Startup Costs
You will need to fund the startup costs of business registration, stock, and marketing expenses.
Generally, we recommend you should aim to have $3-5,000 to start a private label brand with momentum.
This will give you the capital to order 500-1000 units of inventory and leave some capital left over for marketing expenses.
Amazon Automation Costs
Whilst fees do range depending on the service provider, pretty much every option will involve a somewhat significant upfront fee and ongoing royalty payments.
For example, Just One Dime charge $10,000 per product to research, source, and launch on Amazon through your seller account.
Following that there will be an agreement to pay the service provider a portion of the revenue. This typically ranges from 5-15% of the gross revenue.
As you’ll see, these costs can stack up significantly and the long term contract you’ll be required to sign should be considered in the context of these lifetime expenses.
Can you make money with Amazon automation?
Without doubt, there are some success stories from many providers of FBA automation services.
The question of course is how genuine they are, and how many failures there have been too.
Like any business opportunity, if executed well the premise of Done For You Amazon services has a lot of potential to make money for both the investor and the operator.
The challenge though is that with any business opportunity growing in popularity there will be a mix of three types of service providers:
- Good operators. Those that have a proven track record and can genuinely provide value for the fee you will pay.
- Bad actors. Those that see a trend and try to capitalize on it for personal gain with little to no concern for the other party.
- Incompetent operators. Those that tell a story of success but when handed the keys to your business operate it in a less than expert fashion.
If you are diligent to only partner with good operators then there is the potential of profit to be made with a Done For You Amazon business.
But it is most certainly a road which you should travel with caution.
Is Amazon automation a pyramid scheme?
No, an Amazon Automation business is not a pyramid scheme.
Generally speaking, you aren’t dealing with a large, multi-levelled organization. You are dealing with an agency or a team who are directly involved in your business.
Are Amazon automation services a scam?
An automated business is an exciting proposal.
Unfortunately in the world of online marketing, anything enticing generally attracts bad actors looking to profit from the hopes and dreams of others.
Whilst there will be some legitimate Done For You agency services in operation there are also those making promises that don’t get delivered upon.
So is Amazon Automation legit? Maybe. Sometimes.
But those entering into an agreement should do detailed due diligence into who they are partnering with.
Ask questions and ask for evidence about their track record, and what guarantees they can provide with regards to their focus and dedication to your business.
Don’t forget, you are taking on all the risk.
You will be required to invest all the capital upfront and as such should treat it like your own business and do your due diligence in great detail.
Are there alternatives for my Amazon business?
You bet. Building a successful Amazon business isn’t about being an expert.
It’s about learning a proven process and following best practices with diligence.
Those that succeed in building an Amazon FBA business are not the most talented, the most bright, or those from an eCommerce background.
Instead, they are those who are willing to work hard and commit to a 2-3 year journey of building a real, sustainable online business.
Rather than buy into the hopes and dreams of a lifestyle business from day one, put in the hard work upfront to build something yourself (with the help of a great community) and reap all the rewards.
By taking the time to learn how to run an FBA business for yourself you can save a lot of unnecessary expenditure.
It also gives you complete control of your business and rewards you as the business owner – the one who is taking the financial risk to start this business, after all.
If you’d like to learn how to build your own Amazon business and take control of your financial future, you can do exactly that inside our free training.
We can’t wait to see you inside!