Case Study

Is Amazon Automation a Scam? If Yes, Can You Just Do It on Your Own?

With the e-commerce space booming, it’s becoming more and more difficult to be an Amazon seller. Competition only seems to be on the rise. Amazon currently has 5 million sellers spanning over 12 different marketplaces across the globe. So, every seller is trying to find new ways to optimize their business. If you’re a budding Amazon seller, chances are that you might have heard of Amazon Automation services. So, what exactly do they do, and should you actually invest in them?

Is Amazon Automation a Scam? If Yes, Can You Just Do It on Your Own?

Firstly, what is Amazon Automation?

Amazon Automation is simply the process of automating certain business processes with the goal of easing the burden on your tender shoulders. It helps to free up time and resources that could instead be focused on developing your business and ramping up sales.

 

What are the benefits of automating your business?

  • Gives you the time to manage a business– To someone who’s starting with a business of their own while they’re also working on a full-time job, handling everything on their plate can be quite daunting. Automating your business can help you segregate tasks better and focus on the matters that need your immediate attention. 
  • Have a passive source of income– An automated Amazon business can still make money even when you’re not working. This gives you the luxury of spending more time with your family without having to worry about fulfilling orders, speaking to customers, or managing inventory. 
  • Makes scaling a business a lot easier– Since automation systems take care of mundane tasks, you can focus on developing new products or making important business decisions. This could be the difference between your company climbing up and dipping down into the dumps.

 

Are Amazon automation services a scam? 

Firstly, what is Amazon Automation Services? These are companies that offer to do all the dirty work for you. They claim to build a store for you, pick the right products, manage inventory, and set up a functioning consumer redressal system. 

What do they get in return? You can be asked to pay anywhere from $15,000 to $50,000 for the services rendered. They might also insist on picking up a percentage of the revenue which sometimes can be as high as 50%. This can be detrimental to a business still in the stage of infancy like yours. 

While it’s unfair to call that all Amazon automation businesses are a scam, most of them do turn out to be fraudsters. Some of these firms had fake testimonials, while others simply lacked the experience to deliver on the promises of getting you in touch with thousands of wholesale accounts. In addition to that, a lot of these firms do not have a refund policy in place. So, there’s no way to get your money back if you aren’t happy with what they have to offer. 

As many as 1,800 e-commerce companies have invested anywhere from $35,000 to $50,000 of their hard-earned money believing such claims. The stark reality is that a lot of these companies might not be getting that money back. There could be a couple of services that deliver on that promise and set it all up for you in accordance with your demands. But currently, there isn’t a way to sift out the fraudsters from the genuine ones. Either way, giving away a large part of your revenue and paying thousands upfront is not really a smart investment. 

 

How to do Amazon Automation on your own?

While it would be wise to be wary of such offers, the benefits of automation shouldn’t be ignored. In fact, you could get started automating your business yourself. Here are some tips for you to get started.

 

  • Use Fulfillment by Amazon to outsource your fulfillment process

Fulfillment by Amazon (FBA) is a program to automate e-commerce businesses. It allows you to send all your inventory to Amazon who stores it and then fulfills your orders using their existing manpower and delivery systems. So, this way, you don’t have to spend a ton of money on storing inventory. Packaging and mailing orders are also taken care of by Amazon. This not only saves you a lot of time but also the resources on your part. 

 

What can FBA automate for you? 

  • Shipping individual orders from the nearest fulfillment center ensuring that customers get their hands on the product as quickly as possible.
  • Handling returns and absorbing negative feedback 
  • Keeping customers informed about order status, expected date of delivery, and much more

 

A guide to how Amazon FBA works:

  • Send your inventory over to Amazon: Simply ship your inventory over to Amazon, who will then store it in of their multiple warehouses
  • Amazon fulfills your orders: They do the packaging and the shipping part whenever someone buys a certain product from your listings. 
  • Handling of returns and refunds- Taken care of by Amazon yet again 

In return for the services, you’ll have to pay a storage and fulfillment fee. These costs may fluctuate depending on the scale of the business. 

 

How is FBA different from dropshipping?

Yet another popular retail fulfillment method is dropshipping. It’s a type of retail fulfillment method where a store doesn’t maintain an inventory of the products it sells. The store instead sources the item from a third party and then ships it directly to the customer. This type of model allows an e-commerce business to hit the ground and up running without having thousands of dollars in inventory.

Similar to Fulfillment by Amazon (FBA), you don’t have to worry about managing a warehouse or shipping your orders. But, the major difference is that it is a third party that helms this responsibility instead of Amazon. You’re left placing an awful lot of trust on a supplier. If they fail to supply inventory as and when required, it might dampen your brand and reputation. 

Working with multiple suppliers might also complicate shipping costs. For instance, if you are working with three different suppliers, you’ll be incurring three different shipping charges. Automating these calculations can prove to be a real nightmare.

 

  • Consider using email automation 

Email marketing continues to be one of the most popular strategies adopted by smaller companies to create brand awareness. They still offer the highest return on investment. Email automation cuts down on the time required to draft a reply and helps connect with the audience better. The advantages of using automated software for sending emails are: 

  • Helps build a strong and longer-lasting relationship with customers using personalized messages
  • The time that would have invested in drafting replies is now available for improving the business
  • Data from such campaigns can be complied with to find out the effectiveness of the brand.

If you’re wondering about what kind of automated emails to send out, then here are some pointers:

  • Start with a welcome mail when someone newly subscribes to your mailing list 
  • Keep their interests in mind and send a curation email based on their previous buying behavior.
  • Discount mails to convert paying users to repeat customers. 
  • If a customer adds products to their cart but does not check out, consider sending an abandoned cart mail as a subtle reminder. 

 

  • PPC (pay-per-click)  management 

A great way to generate traffic is to use Amazon ads that appear in other Amazon product listings related to your brand. 

Amazon PPC (pay-per-click) is a model of advertising where you only pay for an advertisement when someone clicks on it and is then taken to your listing. There are predominantly four different types of ads: 

  • Sponsored products– These are ads that show up at the top and bottom of the Search Results page. They lead to your product listings. You have the option of modifying the duration of the campaign, but it has to at least run for a single day. Make sure to use appropriate keywords. 
  • Sponsored brands– These ads include your brand logo, a tagline, and up to three of your products. Customers are directed to your custom landing page when they click on the ad. This type is best suited for ads with companies that already have some established brand awareness or are looking to improve on it.
  • Sponsored display–  Display ads that appear on other product listing pages. You’ll be expected to attach product images and pick your target audience. 
  • Stores– An effective way to promote your brand is by building an Amazon store. You can make use of custom templates to customize your store. Attach your logo, images and create separate pages for each of your products.

A PPC software aims to automate all these processes so that you don’t have to spend too much time learning the mechanics. They make sure that as many people see your ads as possible. If you still think it all sounds a bit too complicated, then consider hiring an Amazon ads management agency. These companies are vastly experienced and can create an effective ad campaign for you and manage them. 

 

  • Creating optimized listings

A listing is what determines if a customer buys your product or not. There are mainly four key components to a good  Amazon listing. They are: 

  • Keywords– They largely dictate what rankings your product gets on Amazon. So, don’t forget to insert the right keywords related to the product you are selling.  Keep in mind to include the keyword in the title in your product description. This will ensure that Amazon SEO picks up your listing over others, and it shows up in all relevant searches.
  • Content– Customers would want to know more about your product. This is where good product descriptions come in. They need to convey the benefits of the product and answer some common questions that people might have regarding its use.  Hire copywriters to do this for you. There are plenty of websites to find professionals who specialize within this niche.
  • Product images– Online shopping doesn’t offer the opportunity for customers to actually try on your product, unlike in brick and mortar stores. So, customers end up relying on photos instead. This is why having excellent pictures on your listing is so important. Use high-quality images. Fuzzy, out-of-focus pictures can make it harder for someone to see what your product actually looks like. Amazon lets you use up to six different photos, so use that space to show off your product’s features and functionality. If you’re not good with a camera, hiring a photographer is always a smart choice.
  • Reviews– Good reviews can make your business seem trustworthy and can also contribute to your overall search rankings. So, focus on providing good customer service and following up with an email to make sure they leave behind a review. You can also consider leaving an insert in the product that reminds customers to write a review if they’re happy with your services. 

 

  • Hire a virtual assistant 

If you’re looking to ease off some load off your back, then think about hiring a virtual assistant. They can help with handling mundane tasks like digital marketing, email management, content creation, etc. This provides you the time you can use to focus on building your business. You can drastically reduce costs by hiring virtual assistants from a different part of the globe where the wages are significantly lower. Here are some things to keep in mind while hiring a virtual assistant:

  • Ask for references– This helps you understand your prospective employee’s track record and work ethic
  • Look for experience– It’s ideal to hire someone who has some sort of body of work behind them. Hiring someone fresh might be cheaper, but it might mean that you spend more time trying to make them understand the goals of your business. 
  • Assign them a paid trial project– This is the best way to put their skill to the test. It helps you evaluate their strengths and clearly define expectations. 
  • Has a good hold over handling your social media profiles.

 

  • Managing inventory 

You might run the risk of missing out on potential sales if you don’t effectively manage your inventory. If you’re busy taking care of other parts of the business, keeping track of and ordering more inventory when you run out might seem like an uphill task. Fret not, there’s software to take care of this work for you. Automation software can: 

  • Keep track of existing inventory and warn you when you’re running low
  • Use data from previous sales to predict how much inventory you might need to buy at a certain time of the year
  • Process orders and returns across multiple warehouses
  •  Figure out the right price for the product

There are a plethora of such services out there. So, do your research and look for features that best suit your business needs. 

 

  • Repricing tools

It’s no surprise that price is the biggest driving factor when it comes to buying a product. Users are always looking out for the best value for the money they’re paying. This idea applies to a marketplace like Amazon as well. 

A repricing tool can help you gain that all-important edge over your competitors. You are no longer required to manually change product prices. The repricing tool tracks prices automatically and changes them on your listings accordingly. You’re also cutting down on human error, which might have crept in otherwise.

 

  • Bookkeeping 

Keeping track of your finances helps to determine profits and understand your expenses. A meticulous spreadsheet can come in handy while filing taxes. But, it can be tedious and extremely time-consuming. 

Thankfully, there is accounting software to take care of it for you. All you need to do is connect a Google Sheet to keep track of all your invoices. The software keeps track of where the money goes and helps you manage your finances better. 

 

  • Payouts

Managing funds can be a real headache. It can take up to 19 business days to get access to your money. You also might have experienced an unavailable balance on Amazon. Why exactly does this happen? 

If you have an unavailable balance, it basically implies that Amazon is keeping a certain amount of your earnings for longer than the usual 14-day payment cycle. This amount and the length of the hold isn’t always accurately predicted. In some cases, they might roll over onto the next payment cycle, while in others, the cash might be on hold for longer. 

There are several reasons why this could happen. Here are some common causes:

  • Delays in delivery– Amazon’s policy states that they can hold payment for seven days post-delivery to give the customer to make a claim or return a product if they are not really satisfied. So, if Amazon does not confirm, they can then hold back payment for longer than the stipulated time period of 7 days. 
  • Claims and chargebacks– In case an unhappy customer files a claim, Amazon can hold back payment until the issue is resolved. Once resolved, it can take up to anywhere around 14 days for the payment to be processed. 
  • Poor reviews– Bad performance reviews can be detrimental to your blossoming business. It can raise a red flag with Amazon, who could decide to review our account. This once again means unavailable balance until the review process is completed. 

So, as a business owner, if you want to avoid all this, consider getting a financial toolkit to automate the entire payout process. You will have access to more than 80% of the money from your sales on the very next day of the sale. This means that there’s ample cash flow to sustain your growing business. 

While these tools are sure to boost your business, the biggest advantage of using Amazon automation services is gaining a competitive edge over getting that elusive Buy Box. But, what exactly is the Buy Box, and what do you have to do to be eligible for it?

Amazon Buy Box is basically the box on a product detail page where a customer can add an item to their shopping cart. Becoming eligible for the Buy Box means that you’ll have to meet the stringent qualifying criteria set by Amazon. This criterion includes:

  • You need to have been selling products for a  more than 2 months
  • You need to have a good history of selling- fulfilling a large number of orders consistently 
  • You need to have an excellent customer service program in place- this comes down to the turnaround time for an order, the condition in which the packages are delivered, and the total number of canceled orders
  • You have the option to use FBA (Fulfillment by Amazon) services

 

Conclusion 

If you’re just getting started as a seller on Amazon, it’s only natural that you’re finding it difficult to stay on top of things. There are also family and other obligations on top of that. This is where Amazon Automation comes in. It helps find the people to take care of the day-to-day tasks so that you can focus on developing your business. Amazon automation businesses offer to do this for you, but it may not be a smart investment considering that you will have to pay money upfront and give them a cut of your sales. You can do automated selling on Amazon all on your own at a fraction of the cost. Remember, nobody cares about your business more than you. 

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