What Amazon Automation Companies
Don't Tell You!

The old methods don’t fly anymore!

What Most Amazon Automation Companies Don't Tell You!

Amazon Dropshipping

Amazon's Dropshipping Policy

Amazon (2021) Dropshipping Policy states, "Drop shipping, or allowing a third-party to fulfill orders to customers on your behalf, is not acceptable" (p.1).

Permanent Deactivation

Fulfillment by Merchant also known as (FBM) has numerous risks including, but not limited to the permanent store deactivation and the withholding of funds within the Amazon Store. In a recent article titled, Why Do So Many Amazon Sellers Get Suspended for Inauthentic? Author (Stine, 2019) writes, "our clients are selling genuine goods, but they are inauthentic because of WHERE the seller bought their goods. They are either selling gray market goods (unauthorized sources, diverted inventory), retail arbitrage, or liquidation goods."(p.1).

Dismal Performance Metrics

The vast majority of FBM accounts that we have reviewed prior to transfer have either been at risk of deactivation or have been deactivated. Some of these metrics include Feedback, Voice of the Customer, Order Defective Rate (ODR), Tracking, and Price Gouging.

gross Sales
is not
net profit

Don't Fall for the Gross Profit Screenshot from Amazon! The vast majority (millions) of Amazon Sellers use the same place to source their products. Same supplier and more competition produces less net profit. Many transfer clients prior to joining with us were producing monthly six figure results and only yielding a 1%-3% profit margin. In fact, many were even losing money. In an article titled, The Truth About Dropshipping: The Good, The Bad, and The Ugly (Pekarek, 2021) writes, “smaller businesses have to cut into their profits just to stay competitive with their prices, and at a certain point, it becomes unsustainable.” (p.1).

Amazon Dropshipping

Using Walmart as a Supplier on Amazon

Using Walmart as a supplier is a violation of Retail Arbitrage and Amazon's Business Solutions Agreement. If caught Amazon will permanently deactivate your store and may withhold your funds. If Amazon requests invoices to check if the items are authentic, you cannot send them a receipt and letter of authorization from Walmart.

No LIVE Support

When issues arise such as clients messages regarding products or notifications from Amazon, good luck getting these issues resolved in a timely manner.

Most FBM Stores Get Deactivated

After conducting research on over 1000 former FBM stores, most had been deactivated at one time or another. Store deactivation may result in the withholding of your funds in addition to a permanent store deactivation.

Amazon Private Label

Permanent Deactivation

Many items are poorly made end up being rebranded. Many of these items are copies of items that are selling well, however, they are imported normally from China and are not always made to the same standard as the brand names. The poor metrics typically associated with these accounts include Feedback, Voice of the Customer and Order Defective Rate (ODR).

No Brand Loyality or Brand Awareness

Many online shoppers have grown to trust brand names and the marketing, and reviews associated with them. Copies are often viewed as generic by the public. Many copies have an subpar Best Seller Ranking (BSR) since they are rarely searched and/or sold.

gross Sales
is not
net profit

Don't Fall for the Gross Profit Screenshot from Amazon! Many Amazon providers will display their crazy monthly gross sales numbers only to yield a 1%-3% profit margin. In fact, many are even losing money despite the giant gross numbers.

Amazon Private Label

High Return fees

Amazon applies return fees. Due to the fact that many private label items are imported copies, they are not subjected to the same quality standards as the items made by companies that have to worry about their brand name. This negatively impacts Order Defect Rates (ODR) and other performance metrics.

chinese products/copies are getting pulled from amazon

In a recent article by Techcrunch (2021) Liao noted the following:

Amazon didn’t comment on the status of the suspended accounts, but said in a statement for TechCrunch that it has “long-standing policies to protect the integrity of our store, including product authenticity, genuine reviews and products meeting the expectations of our customers.” We take swift action against those that violate them, including suspending or removing selling privileges,” said an Amazon spokesperson

No LIVE Support

When issues arise such as clients messages regarding products or notifications from Amazon, good luck getting these issues resolved in a timely manner.

Amazon Wholesale

No Pack and Prep

The vast majority of Amazon wholesale providers if you can find any, do not pack and prep your items. Most send your products directly to the seller. This means that the seller might have to be inspected, folded, polybagged and shipped in compliance with Amazon standards.

Generic Items

Many online shoppers have grown to trust brand names and the marketing, quality, and reviews associated with them. Copies are often viewed as generic by the public.

MOST Don't own
their
own warehouse

Many Amazon Wholesale providers do not own their own warehouse. If the Amazon wholesale provider does not own their own warehouse, the Amazon seller is at the mercy of the additional third party. This can impact the quality of items on a sales manifest, the price/cost to obtain the items as well as increase the lead time to acquire the items.

Amazon Wholesale

Poor Metrics
&
Extra Work

The vast majority of pack and prep centers do not manage your Amazon store. The Amazon wholesale providers in many instances, do not ship to an Amazon Fulfillment Center, or ship to customers direct via FBM. Many of these Amazon Wholesale providers do not manage your store. Store management activities include uploading items, packing and prepping, repricing of items, listing optimization, reply to customer messages, assist with brand approvals, or add tracking numbers for each individual item shipped.

chinese products/copies are getting pulled from amazon

Many wholesale providers source their products from a variety of sources including, Alibaba. In a recent article by Techcrunch author (Liao, 2021), noted that Amazon has long standing policies regarding authenticity and that Amazon takes swift action against those that violate them.

No LIVE Support

When issues arise such as clients messages regarding products or notifications from Amazon, good luck getting these issues resolved in a timely manner.

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References

C Stine. (2019, June 20). Why Do So Many Amazon Sellers Get Suspended for Inauthentic?  Retrieved from https://egrowthpartners.com/meaning-of-inauthentic

L Pekarek (2021). The Truth About Dropshipping: The Good, The Bad, and The Ugly. Retrieved from https://www.bigcommerce.com/blog/dropshipping/#5-hard-truths-about-dropshipping-no-one-talks-about

R Liao. (2021, May 11). Prime today, gone tomorrow: Chinese products get pulled from Amazon | TechCrunch. Retrieved from https://techcrunch.com/2021/05/11/chinese-products-get-pulled-from-amazon

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Disclaimer: Results listed above or in any marketing material are not guaranteed. Results provided are provided specifically as examples only. Your results will vary depending on a wide variety of variables. Results for other Clients should NOT be compared to yours in any way. Results are based on many various factors including capital, available inventory, brand approvals, time of year, account health, etc. Smart FBA Inc. does not guarantee or promise ANY results, outcomes, returns, or profit margins. All business owners are responsible for their own business, accounts, liabilities, and applicable taxes. This should be treated like any other business model, including the associated risks, and is not a get-rich-quick scheme.  The Amazon FBA Business Model takes time to scale and inventory is required. Any information provided is opinion only and should not be considered investment, financial, tax, and/or legal advice. We are not licensed, financial advisors or tax professionals.

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