In 2020, Amazon’s $386 billion revenue made it the third-largest company in the entire world based on revenue. 56% of sales come from third-party sellers. Amazon automation businesses have been a trending topic lately, but what exactly are they?
Amazon’s platform has more than 6.3 million total sellers. About 1.5 million are active sellers.
Competing on any marketplace, including Amazon, is a challenge. Sellers are scrambling to find more efficient ways to optimize their Amazon stores.
One method that works well for e-commerce businesses is automation.
But what is Amazon automation? Is it a scam? Should you invest hard-earned money into an Amazon automation business?
Let us take a closer look at the pros and cons of Amazon automation.
- Amazon automation is not a scam, but there are warnings to heed.
- Automating your e-commerce business comes with major benefits.
- Learn easy ways to automate your Amazon business.
What is an Amazon Automation Business?
Amazon automation simply means you pay a fee to have specific business processes and tasks automated to free up valuable time and resources. These can include order fulfillment, customer service, email campaigns, and PPC management.
Automating aspects of an e-commerce business isn’t a novel concept. Think of chatbots, AI ad copywriting tools, automatic emails, outsourced content creation, et cetera. Automation is part of the e-commerce evolution.
Alternatively, invest in an Amazon automation business that does all the work for you. There are varying degrees of automation when it comes to Amazon, including building your store, selecting products, managing inventory, and setting up a customer service system. You pay upfront and surrender a percentage of your revenue, and the Amazon automation business does the rest.
3 Benefits of Automating Your Amazon Business
Automation can come with many benefits, such as effectively slashing labor costs, handling customer service responsibilities, lowering operating expenses, and improving order process efficiency.
Three of the primary benefits to automation include:
- Freeing up valuable time and resources so you can focus on managing your business.
Whether you’re running a full-time Amazon business and struggling to juggle too many tasks on your own or starting a side hustle while trying to manage a day job, automating your business can take the unnecessary busy work off your plate.
Even the important task of packing and shipping products is time-consuming – so why not automate it? Focus on more important tasks while the business continues to run on its own.
- Reducing common pain points when it’s time to scale your business.
As your company grows, you have critical issues to address. Are you going to upgrade your distribution system? Hire a bigger fulfillment team? Move to a larger site that can handle your growth?
Or will you automate elements of your business so you don’t have to worry about those problems?
- Creating a passive flow of income.
Even when not actively working, the money keeps coming. Spend time with friends and family without having to stress about answering customers, managing inventory, or fulfilling orders.
Should You Invest in an Amazon Automation Business?
Are full-service Amazon automation businesses scams, or not?
The truth is, it’s a bit of a gray area, so proceed with caution.
Most Amazon automation services will ask for an upfront investment. Payments can range from $15,000 to $50,000 but usually fall in the $25,000 to $30,000 range, not including the percentage of your revenue.
Ideally, you will earn that money back and then start to see a profit. You’ll have a constant ROI after recouping your investment if you team up with someone trustworthy who has the right experience and knows how to run your Amazon store properly.
The business model is legit, but that’s a high price tag for startup businesses. While some of these Amazon automation services are reputable, scammers don’t have the qualifications to deliver on their promises.
Before committing to an Amazon automation business and handing over your hard-earned cash, thoroughly research the company to make sure you’re partnering with someone who honestly knows what they’re doing.
Companies that rely on drop shipping through an automation business are likely violating Amazon’s terms of service and therefore run the risk of being shut down before earning your investment back. Ask the right questions before committing.
Amazon automation businesses can be profitable. However, there’s considerable risk involved when dropping thousands of dollars upfront.
How to Automate Your Amazon Business Yourself
If you aren’t ready or willing to take the gamble and go all-in on an Amazon automation business, there are still some opportunities to do some of your own automation:
- Fulfillment by Amazon (FBA): Rather than fulfilling orders yourself (fulfillment by merchant, or FBM), send your inventory to Amazon, which will then store it in their facilities and fulfill orders using their employees and delivery systems. Amazon also handles consumer complaints, returns, and communication with customers about their order status, estimated delivery date, and more.
- Email Automation: Create an email flow that sends messages based on specific customer behaviors and triggers. For example, a welcome email to new subscribers on your mailing list, discounts, and flash sales, abandoned cart reminders, order confirmation emails with tracking numbers, et cetera.
- Pay-Per-Click (PPC) Management: A PPC software automates the process to reduce manual labor and ensures many people see your Amazon PPC ads as possible. Sponsored products, brands, displays, and stores are in the right places for customers who are most likely to interact with them.
- Virtual Assistant: If you’re struggling to manage all responsibilities, a virtual assistant can take on some more mundane tasks.
- Repricing Tool: This type of tool monitors competitors, tracks price changes, and automatically updates your listings accordingly.
- Bookkeeping: Accounting software will keep track of invoices, monitor the money flow, and help manage finances.
Whether diving right into the world of full automation or easing in with baby steps, automating at least some tedious business tasks is a good idea. An Amazon automation business will handle it for you, but at a steep price and high risk, so proceed with caution.
Ready to boost your Amazon game? Learn more tips and tricks to become an Amazon top seller.