The Reality For Amazon FBA Sellers


Hey, I’m John Crestani and I’ve made
millions of dollars online. And I’m going to go over the reality of the Amazon FBA
business opportunity. I’ve been seeing a lot of people talk about. And I’m going to
lay out point by point what you should know before you even consider starting
an Amazon business. Let’s get it. Hey, John Crestani here. I run a seven-figure
internet business. I’ve been doing this for years without any employees. I’ve
seen a lot of people talk about Amazon FBA. Start an Amazon business. And I’m
just going to kind of like point out the realities of the situation to help you
understand before you invest thousands or tens of thousands of dollars in
starting an Amazon business so you don’t lose your shirt. So, the first thing to
understand about Amazon is there are 6 million other sellers that you are
competing with, okay? It’s a very competitive marketplace.
You’re literally competing with 6 million other people. Now, that’s not to
say there’s a lot of people making money here. But the reality is a look on my
screen here, there have been a growing number of articles talking about how
people are losing tens upon tens of thousands of dollars because people are
being taught that they can get rich quick. And right here, you’ll see it was
only after they’d sunk $40,000 and 9 months of nights and
weekends that they realized that they couldn’t make any money on Amazon. So,
reality is this is a super competitive marketplace. And if you’re not willing to
invest, you’re going to have to have at least like $25,000
to really make it with FBA. Again, this is a business and you’re going to have to come
out of pocket a lot of money. So, there’s a number of gurus, gurus out there that
I’ve seen saying you can get started for as little as $1,000. Are you joking me? A
thousand dollars is will get you nowhere on Amazon. You have to deal with physical
products. You have to have customer service, you have to have a support
website. You have to buy all the products months in advance
labell them and send them from China usually to an Amazon warehouse in
Tennessee. You’re coming out of pocket a lot of money and you’re spending a lot
of time before you’re even going to begin to see a nickel on that. Okay? The
second thing you have to realize is costs, okay? To start the program, you have
to pay 39 bucks, okay? No big deal to be a member of Amazon FBA. But
what they’re not telling you is to store your products in their warehouse. FBA
means fulfillment by Amazon. It means you ship your products months before you
sell them to Amazon. And you actually have to pay Amazon to store your
products for them. Which sort of doesn’t make sense, right? Because they’re making
25% cut on whatever they’re selling through their store. So, off the top,
you’re already paying Amazon 25%. And you’re paying them usually something
like let’s round it up to about a dollar per foot of warehouse space per month.
Now, I’m not going to do the math here because these are not hypothetical
situations. However much product you have, you’re going to have a bunch of feet that
you’re going to have to have your product sitting in Amazon’s warehouse for months.
And you’re going to have to be paying Amazon the storage fees which are quite
high. And on top of that, you’re paying them money. So, the costs are very real. And you’re going to have to be willing to come out of pocket thousands or more
likely if you want success. Tens of thousands of dollars to even hope that
your business works out. And the reality is for most Amazon sellers, you’re going to
have to go through product after product after product after product to figure
out a particular product that works. And that markets well and that actually hits.
So, you’ll have to go through trial and error many times before you do this. And
all the time, you’re paying Amazon for storage fees. You’re making a much lower
margin than you think. You’re paying monthly fees and you’ve
come out of pocket for all of those products. Once again, you’re still going
to need to have customer service, you’re going to need to
have a website. You’re going to need to have all of this sort of stuff to deal with
just the inherent things with a product based business. It’s not easy to start a
product-based business. It’s not cheap, The third thing you have to understand
about Amazon is bands, okay? It’s so easy to get bands. I mean there was just an
article out. Come over here. Look at this. Amazon has banned thousands of sellers,
okay? Here’s 11 reasons Amazon can ban your account, okay? They can ban you
for any reason what they want. If your products quality is not high enough, they
can ban you. Okay? Let’s say you kind of don’t want to invest as much and you
want to kind of skimp on customer service, right? Or product support. They
can ban you if you don’t respond to customers, okay? Or if you don’t deliver a
product fast enough. Let’s say you’re trying to fulfill the product on your
own. They can ban you. Your entire account. And all of the money you invested in
product because your delivery took too long or you deliver to a wrong address.
For logistics, they can ban you for abnormal account performance. If you make
too much money in a day. Let’s say, you start selling a lot of your product, they
can ban you. If you use the wrong UPC code. There’s a million reasons. If you
get reviews the wrong way. Let’s say you ask your friends or family for reviews
of your product because you’re trying to get your store off of it. They can ban
you. They can ban you for a lot more reasons than that. And they’ve recently
been reports of thousands. I don’t know if you’ve read the news lately. But
thousands. I think over 10 thousand Amazon sellers were banned in a weekend.
Just because Amazon did a sweep and they just ban tons of accounts. Now, this will
bring us to our fifth point which I’ll go over in a little bit. But bands are a
serious problem on Amazon and again, you’re reliant on a single platform. So,
if you don’t sell that product on Amazon, you are out a lot of money, okay? And
that’s a big cost. Everything you’ve invested in your business, if you are
banned, it all goes away. And you’ve lost a lot of money. The
fourth reality of Amazon FBA that the gurus aren’t telling you is that there’s
a lot of fraud on Amazon. The biggest source of fraud is review fraud. Now,
again, I already stated. This is a reason that Amazon can ban your account. If you
try to get reviews of your products in an unfair way, let’s say you ask your
brother, your mother, somebody associated with you,
Amazon’s the biggest company in the world. Do you think they don’t know if
you’re getting your mother, your brother, your friends or your family to review
your products? Of course they do. They’re very witty algorithms to figure
that out. So, one of the things that amazon has been doing lately is just
banning lots of reviewers. A lot of Amazon sellers have been using what are
called review farms. They pay some individuals usually in Russia or China
to review their products or have a lot of Chinese or Russian people review
their products so their products can look more appealing in the marketplace.
Now, this has caused lots of problems for Amazon. So, on one hand, they are banning
accounts. So, if you do that, you’ll get your account banned and there have been
other problems with that. So, you see you know, there’s amazon routinely. This is
from Business Insider. Amazon routinely removes accounts and vendors that
violate its review policy. But new data shows that it is drastically stepped up
its enforcement this year. What that means for you as a seller on Amazon is
that once again, you are reliant on a single platform and if they close your
account, all of the money that you had invested in product goes away. And you
end up with a huge loss. And the margins you’re hoping to make are generally
pretty small on products. So again, that’s a big problem. And you look… There’s even
a a reddit forum called the great Amazon purge. There’s a forum devoted to talking
about all of the people who have been banned from Amazon. It’s a big problem.
Now, the second side of the review fraud is that people can also use it against
you. I talked about how you can, you know, hire Chinese or Russians to review
product and move it up. But the opposite can also be true. As if, let’s say you’re
selling notepads, right? Big, big fat notepads. And let’s say you enter in the
market and you start moving up the rankings and people are buying more and
more of your notepads on Amazon. Existing people in that market can actually
fraudulently review against you. And they can hire a bunch of people to give you
one star reviews and say that your product quality is horrible and they can
say that you don’t deliver on product etc. Now,
look at this. You can have people hijack your brand, deface it. Look at this. Phony
fires. Sellers will buy their rivals product light it on fire
and post a picture to the reviews claiming it exploded. Amazon is quick to
suspend sellers for safety claims. You can have your entire business shut down
in the beginning because a competitor bought your product and claimed it
exploded. That’s how easy it is to just ruin your business. Again. And this is all
going to come back to our number 1 point. Here’s another example of the
massive fraud that can go on and how competitive it is. So, there’s defacement.
So, a competitor can actually click on your listing and say that you’ve miss
appropriately labeled the product you’re selling. They can say instead of selling
notepads, you’re actually selling pornographic images. That would be
another big problem. And the sophisticated people on Amazon can hire
20 people to say, “Hey, I bought a product from these guys. They’re all pornographic
images. This is a front. This is a front for selling child pornography.” And
suddenly, boom! All of the money that you invested in buying a product from China
shipping it to Amazon’s warehouse is all gone in an instant. And it’s going to take
you lots of time and money to even try to recover everything. Now, the number 1
problem with Amazon is a very obvious one. And I have stated it a few times
over the course of this training. But its reliance on a single platform, okay? When
you are selling on Amazon, your entire business is reliant on a
single platform. If you buy into a gurus business opportunity about starting an
Amazon FBA business, once again, this is the business you’re starting. You’ve put
your entire business and made it fully reliant on one company who has the power
to say, “You can keep selling or you need to stop selling or we will put your
products at the top or we will put your products at the bottom.” Again, you have no
control over your business. Whenever you’re reliant on a single
platform, you don’t have a business. Plain and simple. So to all the gurus out there
that are peddling Amazon FBA businesses, these are not businesses. These are
outlets. Amazon is a great outlet to sell a product if you have a pre-existing
product. If I own a notepad company or a light company or a camera company, it is
a great outlet to sell my cameras or my lights or my furniture my lawn chairs
or my pillows. But Amazon FBA is not a business you necessarily want to start
unless you have some key advantage. But once again, if you’re thinking that the
way you’re going to get rich is starting in Amazon FBA business or if you’ve
invested money already, you’re playing a risky game. I know people have made some
money doing it but once again, it’s a very risky game and it’s very cutthroat.
So just be advised and be aware of the risks associated with the business. Now,
if you want to learn more about how to start an internet business, I’ve been
running a business online since 2012 and I’ve been making millions of dollars a
year without any employees just kind of living like a digital nomad and doing my
thing. I advise you to subscribe to my channel. You’ll get access to a couple
free courses. I personally do affiliate marketing. You can learn about that. You
can also check out some of the free mini courses that I have available. About
copywriting. One of my friends does run an Amazon FBA business so you can check
out his material there of what he post about. nd I have a number of other
friends and mini courses on my channel where you can learn more about how to be
an internet entrepreneur. It’s a really great life. Put a like in the video if
you enjoyed this material. And put a comment
below if you’d like me to expose more kind of scams or expose the reality of
more situations. If there’s a specific internet business that you’re interested
in but you’re not sure of what the actual reality is, please let me know in
the comment, I’ll do a deep dive into the business model. Let you know my thoughts
about the reality of the situation. Without all of the guru talk around it.
Looking forward to seeing you soon. Subscribe to my channel. Love to see you
on next video.

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