someone sent me this video the other day
and it might be signaling the end times could be the last straw
we’re already battling the Chinese trade war people are already saying that
Amazon is too competitive and now this Amazon themselves with their almighty
power and and knowledge stealing products from their own sellers everyday
people like you and me just trying to make a buck on their platform could this
be the end of the Amazon FBA Gold Rush hey I’m Jesse Franco and I’m gonna cut
right to the chase today so some of some of this we don’t Instagram the other day
with quite a bit of worry and concern they’re frantic like oh my god like I
just I was about to dive into his business model Amazon FBA sell some
products I’m gonna about invest a bunch of money and now I don’t know if this is
the right thing to do right like JT can you check it out let me know what you
think so I checked out the video I watched it and I gotta be honest I was
concerned too but for different reasons so let’s go ahead and jump into the
video here now Amazon is facing new scrutiny Yahoo Finance’s crystal who
investigated how the platform is using third party seller data and now because
as in control of third-party sellers a lot of sellers data allowed individual
seller have the concern that how their data may be used to compete against them
so my latest invitation looking into the matter and talk to two formal admins of
employees who explained to me that that’s exactly what Amazon was doing
today looking into the sales data the training product and the reviews and
returned data from their individual sellers and to decide what to make for
their private label products like Amazon basics so that’s the big problem here
it’s at Amazon with their entire database of our data right they’re
taking it and they’re using that everything they have the sales the
reviews the returns everything and they’re basically taking our products
copying them and because they’re Amazon they can obviously probably sell it for
a cheaper price and basically stomping us out of the market and and destroying
our businesses she even goes on to say this so sometimes they would even order
a product from individual sellers and try to reverse
engineer so that day could make their own version of the product so they’ll go
as far as to order our product that we worked so hard for to put together so
they can see it analyze and break it apart and reverse-engineer it so the big
question I have is this even legal this seems to me like it might violate some
sort of antitrust regulation great question I’m sure you are all thinking
that too and of course he goes on to say the answer is no because when we signed
up as sellers we did something and we accepted the Terms of Service so
basically they can do anything they want with our data and that’s why I said in
my 11 things to do before you start selling on Amazon to read the Terms of
Service is this is a tough one alright guys but read the Amazon TOS so
basically we’re trapped there’s nothing we can do to stop Amazon from taking our
products we should be outraged right not only now do if they compete against each
other now we’re gonna compete against Amazon
themselves and they have all the data they know what metrics to look for and
they have an unlimited budget it’s like they can just look for the best products
scope us down and just fire away right there’s nothing we can do now let me
tell you what concerns me most about this whole thing I’m concerned because I
know a lot of people watching this or seeing this video on Yahoo Finance are
going to be concerned I know they’re gonna be people are gonna be scared away
when in reality it’s not the biggest deal and let me explain why so what do
we know about what she said so far right so there’s a video here it’s also an
article under this so so I’m gonna be reading from the article they said that
they are able to analyze various data sets from the marketplaces including
list of top selling and training products in certain categories pricing
pricing points price points return data and reviews and then they would use this
metrics to decide on an inspiration product order from the seller and try to
reverse-engineer so what does she really say am I looking at the sales right the
the price points there and the reviews so what did we look at as private level
sellers we’re looking at the same stuff looking at the sales right your sales
history the price points the pricing history and the reviews so they’re
looking at the same exact metrics that we are as Amazon sellers and then she’s
gonna order information product or they’re gonna order inspiration products
and reverse-engineer it which is what I always say to do as well order products
from the competition right so Amazon is just
doing like a regular private label or like we are the only difference here is
that they have the hard data right so when we are doing this we’re looking at
estimated data right so we’re looking at stuff from viral launch which is not the
real accurate Amazon data where of course Amazon has the hard data it’s not
like they have some kind of god mode or they know exactly what products are
going to win they just have more data right because if you look at Amazon
basics they have failing products so it’s not a super algorithm if you go to
you know Amazon basics go to page whatever 59 of a particular category
you’ll see products there that have like two stars did really badly and then you
have just they’re out of stock now because they just discontinued these
products so then it turns to the big question of is what they’re doing okay
is it right is it going to destroy the businesses so maybe the lives of some of
the people on the platform right everyday people like you and me just
trying to make a buck in the platform is it is it okay what they’re doing now
really quickly I want to bring up a point here that’s in the article the
spokesperson says Jeff Wilk the data Amazon uses is just the bestseller list
that is fairly available to anybody so the things that we end up making improve
it labels are the things that sell the most that are on the top of search
results now that’s a little scary there it’s a little concerning right because
for us as private label sellers we’re looking at high demand and low
competition but with Amazon they’re just looking for high demand right they have
they have the money gun so they can they don’t care if it’s a little competition
if it has high demand they’re gonna make it now that’s gonna scare a lot of
people but I’ll get back to the second because I want to talk about wise to me
that’s actually good news right that’s actually good news but then let’s return
now to the question of is it ok so let’s go back to the video I mean if you think
about any traditional retailer you think about target selling groceries they’ve
Archer farms or Market pantry private labels I mean they’re basing their
decisions about what to sell and how to sell it and how to formulate it based on
watching Cinnamon Toast Crunch fly off the shelf right so the data here for
Amazon might be more sophisticated but target has some pretty sophisticated
data as well and I’m just picking target as one example isn’t Amazon just doing
better what retailers have always done and why should they get extra regulatory
scrutiny because of it great point Brian like a bride’s face
you know what he made a great point right there and that’s just it right
it’s no different than what Walmart and and Kirkland or Costco and Target are
doing with their own private label they’ve been doing it for years right
yeah you get a product you get your product into Walmart it sells well in
Amazon or sorry Walmart can go boom make a great value version of that right
Kirkland can cost we can go make a Kirkland version of that just like that
it’s the same exact thing now you’ll see here when she answers this question
we’ll play it she kind of changes the the issue
good point Bryant and we have to look at the unparalleled market position that
Amazon has and what kind of data it has access to as for say for example an
average grocery store usually carries around 60,000 SKUs in stores and that’s
what they have visibility on and then mark warmer which is one of the largest
online marketplaces they have 75 million skills online versus Amazon who have
over 100 million so that gives an Amazon a much better visibility of how the
whole marketplace is doing so now it’s no longer about third-party sellers it
becomes about because Amazon is so big that they have over 100 million products
whereas you know a local grocery shop you only have 60,000 or Walmart has 75
million that now it’s no longer about third party dollars about being unfair
to the competition the competition being Walmart and Costco right because I’m
gonna have to has such a huge dominating view of online retail and then here’s
the kicker that enter the punchline of the whole thing and also Amazon
dominance over a third of e-commerce sales in the US versus you know warmer
maybe only single-digit of the share so I think regulators care not about
exactly not just about what they do but how they get to the position they’re in
today and if they are already in a dominant position is a still fair for
them to do that for to their competitors she wants to emphasize Amazon’s
dominance by saying it has you know over 30% share of online retail Walmart is
only in the single digits and actually she underestimated that I’m closer to
50% of online retail right and then she finishes off by saying is if not
about what Amazon does right it’s about how do they get to where they are and
now that they are where they are is it still fair to look at third-party
sellers data or is it now a monopoly and it’s unfair to the competition like
Walmart and Target so the question now becomes has Amazon monopolized online
retail has a Milan monopolize retail right they call it everything store and
the fear is that Amazon is going to take all these products 160 million these
products and private label all them and create this massive a juggernaut like
they say an article right and have this big huge control over retail like the
the main corporation from the movie wall-e is very important to us and to me
that’s ridiculous Amazon has it monopolized retail Amazon
has made it accessible they’ve made it the first time ever in the world that
everyday people like you and me could sell massive amounts of goods to
consumers so she asked a question how is Amazon gone to this place how are they
able to get so many products you know 50% of the market and it’s because they
let us do it for them their business is not private label right they have 140
private label brands but that’s not what they’re focused on are they saying the
article here private label sales account for approximately one percent of
Amazon’s total sales while retailers like Walmart Costco Kroger Target Trader
Joe’s and Walgreens have private label products that represents 18 to 85
percent of their sales if that was Amazon and they have 50% of you know
EECOM and 85% of that was their own private label or even 50% that was over
I really won’t say yeah okay maybe don’t sell there run away they’re crushing
everybody they’re gonna consume you but that’s not their model so while
everyone’s being frantic and oh my god Amazon is dead you know it’s it’s too
late they’re gonna steal my products the opportunity is done I’m not gonna sell
on Amazon anymore that’s fine but then go get a product and get it into Walmart
you better start now and I’ll see you in a few years all right maybe you think
I’ll just start my own e-commerce store like Shopify and I’ll sell my products
there that’s fine too but you just heard that emmalin has 50% of the market and
Walmart has less than its into the single-digit percent so where are you
gonna fit it right so I know it feels like yeah Amazon may be weak monopolized
ecommerce but we are Amazon right the sales
of Amazon as they’re calling it in this article is majority us third-party
sellers 34 sellers make up the majority of sales on Amazon over 50 percent so
even if Amazon is sniping some of our products right I just like using this
thing but they’re not gonna to private label all the products not going to try
become a private label juggernaut and scoop up 40 20 even 10% of the market
because they just be cannibalizing themselves right they already make money
when we sell our products they already make money when we store it in their
warehouse and when we pay for ads right it’s a consumer first business and
having us do the dirty work of getting them to fifty percent of the market is
much easier and much better for the consumer but that doesn’t take away from
the fact that they are taking some of the products right I’ve seen the story
they’ve seen the horror stories of Amazon came in and they crushed a
product for a seller but this is why as a new seller even if you’re a six-figure
seller already you really shouldn’t be concerned because as we turn back to the
article now the point I mentioned earlier will call so that an Amazon data
the data animal uses is just the bestseller list right so the things that
we end up making in private labels are just the things that sell the most that
are the top of the search results okay so the reason we shouldn’t be concerned
about this is because Amazon is not looking for competition which is great
right they’re looking at the best of the best the top of the top the most sales
the top of search and if you were to compete or find that product you would
already be competing against a beast right you’re talking about products that
are making millions of dollars every single month one to three million
dollars a month Amazon is just gonna competing us them because they have the
budget to do that now I don’t know about you but I don’t have the budget to
launch a product at the end of that to try to compete for a million dollar
product on a product launch the products that I’d go for and the products the
kinda products I teach other people to go for like we’re looking at the top of
the market on a product it’s like a hundred grand right hundred two hundred
grand and we’re talking gunning for that top spot in this market and if you don’t
understand a while through the explain this okay
so 100 grand let’s say you have your one of solid product that makes a hundred
thousand dollars a month right and this product is sells for $30 on Amazon so
people buy it from you and you they pay $30 okay so now your think at that at $3
and $100,000 hundred month how many units you need to sell
ready to sell like thirty three hundred units okay so you need to sell thirty
three hundred unit which means you need to have inventory of at least thirty
three hundred units so how much is a product cost let’s say it cost landed
costs $12 so running cost it’s in the warehouse
everything just shipping everything included you spent $12 okay for one unit
so $12 a unit you need thirty three hundred units for one month worth of
sales you’re looking at thirty nine thousand dollars right thirty nine
thousand all right yeah just check my math and yes thirty nine thousand
dollars initial just to have enough units to sell to make a hundred thousand
dollars and you’re gonna actually probably need to order more of that
double that to have me no inventory on hand so that’s why that’s the max like
that’s the top of where I’m gonna aim for a product launch so if you’re
looking at million dollar products forget about it right and a hundred
thousand dollar product for Amazon is a small tiny fish right there goodness
they’re not they’re gonna sneeze at that I don’t I said that’s my maximum so I’m
typically looking at products in the 50 40 20 km month range so I can profit you
know five ten thousand dollars every single month so if your new seller and
you’re looking at a product so you can profit five grand a month 10 grand a
month and there’s not already an Amazon basics product there one nebula basic
product probably won’t show up right if you’re only trying to make $5,000 a
month do you think Amazon is actually gonna look at that market and be like
let’s launch one of those because 5000 Amazon they’re not gonna care right so
they’re just looking at the top of the top of the top so as new sellers it
really shouldn’t be a big concern so from that perspective you’re safe but
it’s still a possibility so what happens if right you do have the budget to
launch a big product and Amazon can come in there and take it or what if you
start it small and humble and you have your build up you build up and build up
and now you have a million-dollar product that you’ve built over five
years and then Amazon comes up and takes it right that’s a possibility but to
answer this question we gotta go back to the basics the brand right Amazon basics
so I think why do they make this brand out of the basics now there’s a lot of
private labels that Alan has right but Alan on basic is the main one that
everyone’s scared of like I’m not selling groceries like Amazon fresh or
whatever so Amazon basics it’s meant to be the cheap alternative right it’s
meant to be the great value the kirkland that cheap
version to make it you know easier for consumers better for consumers to buy
product cheap products on Amazon now it’s like even for my bigger products if
Amazon basics was to step in and take one of my products would it hurt my
sales absolutely right it would definitely take a huge hit on my sales
but it’s not gonna destroy my entire business right it might not even take
away that my profit my product would still probably be profitable and the
reason for that is because I’m not the cheap alternative I’m not the low-end
version of what Amazon is trying to create with their basics brand right I’m
position myself as premium and it’s the same reason I did when someone asks why
I’m not concerned about you know Chinese manufacturers selling my same product
for cheaper because not always about the price right on Amazon you want to be pre
me one you want to have quality so it’s something that people are gonna pick
because they want something better not because they want to pinch pennies right
you want to have an offer that is the obvious choice for your target consumer
because look when I go to Walmart and I go to Walmart all the time right by the
way shout out to the guy that saw me at Walmart and recognized me I go to moment
all the time and I will a have great value products great value and I walk
past them like great value toilet paper okay there’s great value eyelet paper
there at Walmart and it’s cheap but I’m still going Charmin baby because there’s
nothing greater value to me than a smooth ass okay so I am the no bullshit
Amazon seller after all and that’s my no bullshit take on this situation let me
know what do you think great are you scared now to sell Amazon did I miss
anything let me know in the comments below I want to hear your opinion as
well okay so just to recap is Amazon you know taking third-party data to sell
their own products probably yeah most likely but what did we expect okay is
there a super algorithm make sure they pick a winning product every single time
absolutely not they have losing products are they going to all of a sudden become
a super private label juggernaut and private label every product on Amazon so
all the sellers there and will have no chance at winning absolutely not because
we are what creates the sales of Amazon we are a reason there’s so many products
and so much options for people consumers to enjoy Amazon Prime right so if you’re
an Amazon seller or you’re looking to be an Amazon seller
don’t let this you know scare you off they’re only taking from the top of
the top and it’s really not gonna affect the smaller guys like us you just want
to make you just want to make six that you know five thousand a month on a
single product and then add those products up so you make a million
dollars a year the two million dollars a year right if you’re making a million
dollars a month on a product maybe you should be worried but if you’re not
there yet then don’t be too concerned Amazon is
still a booming opportunity it is still a really good time to get into it all
right now is Amazon monopoly that’s unfair to Walmart and Target and stuff
like that I don’t know quite frankly I don’t care cuz I won’t sell any products
in Walmart I only sell on amulet if you want to find out how to sell on Amazon I
would definitely go to the link in my description and join my free masterclass
I’m gonna give you the no bullshit way how to sell Amazon in this
hyper-competitive marketplace in this current age alright so go ahead and join
that now or if you want go ahead and watch that video right over there or you
can click my face to subscribe to this channel don’t forget your empire weights
I’ll see you later look for the best products in the market and just bury it
it’s outrageous I can’t actually do that way that sounds
so silly getting sweaty so basically wow what a long video