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Your Money & Your Life: Making It Big on Amazon?

R. C. Steif

What does it take to start an Amazon business? What are the risks? And what’s the potential for doing well?

Wednesday, March 01, 2017

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“Amazon looks at the seller as a product — one that is easily disposed of,” explains Ephraim (Ed) Rosenberg, founder of the ASGTG (Amazon Sellers Group Tele Gram). “While there’s almost no chance you won’t be suspended at some point, you can avoid 90 percent of the reasons for suspensions by keeping up to date with all of Amazon’s rules and procedures. Sellers should be familiar with the online store’s rules about listings, copyrights, trademarks, image compliance, condition guidelines, and more. Lastly, Amazon expects sellers to be experts on the rules on day one.”

I work at a rapidly expanding e-commerce business and keep on hearing about guys who are making it big selling on Amazon.

I’m tempted to go out on my own, but I wonder how profitable Amazon businesses truly are. Are these guys I hear about really doing so well? What does it take to start an Amazon business? What are the risks? And what’s the potential for doing well?

A Partner That Doesn’t Care

C.J. Rosenbaum is a lawyer who specializes in assisting Amazon sellers reinstate their accounts, avoid suspensions, and defeat false claims. He is currently writing a book on Amazon Law.

Here’s the good, the bad, and the ugly about doing business on Amazon.

The good: 80 million customers with practically zero investment. You don’t need thousands of dollars to open a store or purchase inventory. You don’t even need a computer! All you need is a smart phone, a credit card to purchase goods, and an eye for what people will buy. That is unheard of in the history of commerce. You always needed lots of money to start a business. Now you don’t.

In addition, as a veteran seller, you’ll learn how to utilize tools Amazon provides to professional sellers to manage inventory, shipping, pricing, and marketing. In other words, the company gives you the tools to help run your business better.

The bad: Amazon doesn’t care about you or any of its other 1.6 million sellers. Whether you’re new or someone who’s been selling on Amazon for years, Amazon’s primary focus is on the consumers and, recently, on big brands.

That means the customers are Amazon’s and there’s no opportunity for the seller to develop buyer loyalty. This is all enshrined in Amazon’s philosophy and business plan. The sellers are not permitted to steer customers to their stores and the online giant highly regulates any communication sellers may have with customers. In other words, Amazon zealously enforces “ownership” of its customers.

 

The ugly: Amazon can suspend its sellers without warning at any time. Moreover, when a seller’s account is suspended, he not only loses the ability to sell his products, but Amazon also withholds his money from previous sales.

All sellers must follow Amazon’s principal of “customer obsession.” Even when the customer is clearly scamming a seller and claiming the product was not what he/she expected, sellers are required to keep that customer happy and avoid complaints. Amazon also expects near-perfect control over inventory, shipping, and packaging. If a seller has any doubt that his product will arrive in perfect condition, that seller should sell something else. Amazon also requires its sellers to respond to customers within 24 hours, which could pose a problem on Shabbos or Yom Tov.

All that said, if you follow the rules and put up with all the headaches, selling on Amazon is a great opportunity to make money. To answer your question, yes, you can do well on Amazon if you put in the time and work hard.

(excerpted)

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