Ahh.. that beautiful, simple, sleek logo. We all know what Amazon.com is, and for those that don't, I highly suggest turning a computer on more often.
In short however; Amazon.com has become one of the largest online retailers in the world.
This is for good reason. They allow a shopper to purchase whatever their heart desires with the click of a mouse, literally! Add to that the ability to "primeify(my trademark is pending on that word Amazon so go away!) your order" (Amazon's free two day shipping service), as well as the easiest and most lenient returns policy, and you have a recipe for an e-commerce website that will surely get more customers then most retail websites out there today.
Amazon even gives third party sellers the opportunity to cash in on their hard work. They allow these sellers to sell items to all of Amazon.com shoppers, and considering Amazon.com is scooping up 96 million shoppers monthly, you can be sure you'll profit from it! That is just awesome, Amazon sharing their wealth with small business and individual sellers.
But wait... It's not as awesome as you might think.
Amazon.com is a retailer. Their sole purpose in life is to make sure they survive, and that is it! I don't care if you get countless e-mails from Amazon saying we love you, here's a million dollars, we can't live without you, in the end, they are only concerned with their well being. For good reason, after all they are a business.
And since you are also a business, look-out for yourself, and don't base an entire business on your Amazon sales. We have all heard countless stories of sellers losing their livelihood because Amazon.com pulled the carpet out from under them. We have all heard about the emails from the dreaded seller-performance@amazon.com and how contacting them is next to impossible because seller-performance headquarters is probably somewhere near the center of the earth (like the umbrella corporation). Whether you understand my Resident Evil reference or not, basically, you sell on Amazon, that part of your business might as well be owned by Amazon, because essentially... it is. Except Amazon the new owner of your business, doesn't really care much about your business. When it hits 20k/month, then maybe they will raise their eyebrows at it, but not in awe or to congratulate you, simply to undermine you.
So why would a company that appears to want to help by sharing their wealth (website traffic) to individuals and small businesses (for a small fee) be trying to undermine you?
Well it all goes back to the fact that Amazon.com is a business. Do you think Amazon wants you to profit and watch you make a million dollar empire?
NO.
They want to study you, leave you be for a few months, see what your capable of, and slowly steal your business, more or less.
Now let me get off topic for a second, don't worry it will tie in shortly.
Lets learn about prime. Amazon prime is something anyone can get with a $79/year fee (students might actually be cheaper). What this entitles you to is free two day shipping (or +3.99 for one day shipping) on ANY sold/shipped by Amazon or Sold by XYZ Company/shipped by Amazon. Or more simply, anything with the little blue prime logo near it
Now, 99.9% of UPS, Lasership, Fed-ex, or USPS 2 day select services are rarely under $20. Amazon of course has contracts with most of these companies, so I am sure they save more then the average joe, however, they are still losing money on this. Example: Ping Pong table for $399.99 (the manufacturer sells it to retailers for $299.99) it is on Prime, free two day shipping. Obviously Amazon.com loses money on this deal, so why do they do it.
I've decided on two reasons, one it makes them the single best place to shop on the internet (assuming you don't abuse their returns policy), and two it allows Amazon to watch a successful business.
Okay now back to what I was saying earlier. See just because it says prime by the item you are purchasing, does not mean Amazon.com is selling it, it simply means they are shipping it via prime 2-day. It will clearly show if the item is sold by someone other then Amazon.com. And when I see a seller that chooses to use prime, I cry a little inside for them. Why? Because unless you own just about every right in the world to the item you just shipped them, you might as well have wrote on a card, here is my business and customers Amazon.com, have a great day.
See 3rd party sellers and businesses utilizing the prime feature, pack their inventory, and send it off to Amazon.com. Amazon then can track your sales better, sees the item, feels the item, and can ultimately learn the ins and outs of your business. Not to mention you are not gaining a customer base, and you are not benefiting your business in a lasting manner. Why do you think sellers on Amazon.com get e-mails at least twice a week telling them how great prime is and they should start using it. Do you really think Amazon.com is really making the money through the fees of your item to ship everything 2 day? Simply put, no they are not (which should be evident by their reported revenue).
They want third party sellers to participate because then they can learn about the business, see if its something they can sell themselves, as well as confusing a customer into thinking that this item is from Amazon, thus building a larger customer base for themselves. An online Walmart if you will. As a side note, Amazon prime participants also have to be apart of the seamless return process Amazon has, so that can quickly eat you alive as a small business too. Oh, and one more note, your whole Amazon.com selling time will be spent competing for price, because that is generally all that Amazon.com buyers care about.
So now that you have given your business away to Amazon.com what happens next. Well once they data mine, and learn a bit more, they simply shut you down for whatever reason they feel best, replica products, verification failure, information they cannot disclose, etc... And your business instantly goes from 20k, 50k, 100k/ month in sales, to wait for it... 0. Why does it go to 0? Oh yeah, because you based your entire business solely on an online platform that really could give two **its about you, your employees, or your family.
So how can you combat this? Well you can send in an appeal, which is like fighting an alligator with a toothpick. You can poke all you want, but the alligator is going to drag you down and keep you down. In other words, no matter what you've heard, send in your appeal, and expect a denial. Whether you deserve it or not.
Now I know what you're thinking, "I'll just pull my inventory out of their warehouses, collect my funds, and start somewhere else", no sir. You now have to wait 90 days for that 50k that's sitting in the account, just in case customers file a claim (and so we can make interest on it). They leave that second part out of the email though. But you are still happy that at least you will get your inventory, well... Yeah you'll get it, but at a price. Amazon.com will charge you to move EVERY single piece of inventory you shipped them out of the warehouses, and to your front door. So that 50k in the account, well you just lost 10 of it because you had to pay to get 100,000 units of inventory out.
So where does this leave you? Probably crying in a corner, lost and confused. Where does that leave Amazon.com? They either kicked a liability out of their way (if your practices were actually illegal), or they have a great new business venture, product to sell, or service to give, courtesy of you.
Oh, and not to mention, all those thousands of customers, they most likely do not even know who you are, or what your business represented, they probably just assumed they were buying items from Amazon.com. So now, you do not even have a customer base to contact, or advertise to.
You royally screwed yourself, which is what I thought a little while back. However; small business owners, and individuals interested in selling items, and services, are all entrepreneurs in my opinion. And that means, when we fail, we just do it again (slightly different of course). So as one myself, what did I do, I built a website and began the slow process of selling there. Yeah, its slower then Amazon.com, but now I am building lasting relationships, I am competing on a level of service, not price, and I am not shipping my new business ventures to a warehouse that secretly awaits the day of my demise.
I realize online selling platforms are hard to get away from because they are just so easy, and they do work. But if you want sustainability, and not just a 6 digit income for a year or so, then I suggest becoming an independent e-commerce store, and develop a niche.
Does that mean I think you should pull your business off Amazon.com.. of-course I don't! Because more then likely that is the only thing sustaining you, but I do suggest working on a daily basis to get away from them. Never use prime, never release company info no matter what their threatening email says. I got one like this one time ("we will need supplier contact information, as well as origin to keep your account in good standing"). When I got that e-mail, I just laughed and logged out.
I realize this information is a little jumpy, and you must understand it is pretty complicated stuff, but in general this is what happens. These are Amazon.com business practices, and if you choose to be apart of it you have been warned. But hey, since you are reading this, you are probably thinking about getting away from them anyway, so I suggest getting a domain for your niche, getting a hosting account, and downloading WordPress and begin creating a website all your own.
That is what I did, and I couldn't be happier. Well... I am happy*
Got any questions or comments, love to hear your stories.
Owner of MetaWholeSale LLC
