Amazon Automation Review: Legit or Scam? 14+ Things to Know (Top Agencies Discussed)

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Amazon Automation Review: Legit or Scam? 14+ Things to Know (Top Agencies Discussed)

August 26, 2024

Is Amazon Automation legit or scam? Some automation services are legit, but expensive. They simply handle the menial FBA management tasks for you.

Others show major red flags. Especially when they claim you will make money by doing nothing, because they'll do everything for you. Upon closer inspection, it turns out these companies are deploying pretty risky business tactics on behalf of their customer's Amazon account, putting these accounts at major risks for suspension.

Before "Amazon Automation" became the next hype...

Before it became a new catch-phrase and a business opportunity.

Amazon Automation is simply a business management strategy. It involves outsourcing certain Amazon business management tasks to an agency, virtual assistant, or software.

Software and virtual assistants typically automate a few aspects of operating an Amazon store. Agencies are more full-service. Automation businesses complete product research, optimize your product listing, manage Amazon ads, and more.

However, it’s difficult to decipher ethical full service Amazon agencies from the scammers. In fact, many aspects of Amazon automation are controversial. Here's why some people think that this phrase "Amazon Automation" is a scam:

Coffeezilla: “You want to stay away from these people. These people want to saddle you with all the problems if anything goes upside down."

Coffeezilla reviews scammers on YouTube and has reviewed Just One Dime on his channel, here's what he had to say:

Just One Dime = "Just One Scam". It's something he likes to call "risk for thee, and none for me." Seth Kniep claims to provide a conservative ROI of 200% minimum- but if this doesn't happen, it's not his fault.
Automation gurus can take your money, get your Amazon account suspended, and leave you with nothing. If you take legal action, they will use the money you gave them for representation.
Just One Dime criticizes gurus who charge high fees. But then, they charge $30K just to start. Throughout his pitch video, Seth claims to have "run all the numbers, a hundred different ways" without sharing those numbers.
The numbers he supposedly ran show that taking a 15% cut of your total sales revenue is more appropriate than a 30% net margin cut. The only way that this works in the seller's favor is if you are making over 50% profit margin. If it goes below 30%, Seth will still get 15% in sales.

Beau Crabill: “If you get someone's account suspended, you shouldn't be taking money from people."

Beau Crabill sells wholesale on Amazon and is not a fan of automation. Here's why:

Many automation agencies dropship from retailers. This is against Amazon's Terms of Service.
Even if they dropship from wholesalers, dropshipping makes little sense. It's an FBM model, which means you can't win the buy box and therefore will get less sales.
Agencies often fake their testimonials, use employees or sales reps, or make guarantees that are corrected in the small print. You rarely see bad testimonials because they force customers to sign an NDA.
Many agencies don't even have merchant accounts. So, to use them, you must wire their fee. This fee is often upwards of $30K, with no guarantee that Amazon won't suspend your account.
Refund policies are non-existent or ignored.
The bottom line: These agencies can take $30K, get your account suspended, and earn you literally $0. In fact, Beau has evidence of at least 20 people from just ONE agency that has done this. That's $600,000 that the agency has collected with no deliverables to the customer.

Spencer Cornelia: “An automated system to separate you from your money."

Spencer is a real estate agent in Las Vegas. His YouTube channel, with over 400K followers, debunks scams like this one, here's some of his quotes:

"Kevin David's automation agency is in line with his other scams. He cares more about making money than his own reputation, which gets him the nickname "copycat Kevin." Here's an image he shares of a product that's made him money. If you look closely, each item the arrows are pointing to is completely different."

These gurus claim to know how to find a product that will cover Amazon's cut, their cut, handle shipping costs, and manage returns, all within a tight profit margin that will still deliver.
So, if you look closely at testimonials, you'll quickly notice that they rarely share expenses. This is because $1000 profit isn't impressive if you spent $100,000.

Why would gurus sell a "secret" system, if they can make the most money doing it that way? Getting you to spend your money is ultimately more profitable for them.

SUMMARY: Why Some People Believe Amazon Automation is a Scam

You wire tens of thousands of dollars to someone making close-guarantees of success. They use this money to perform services on Amazon that are against the Terms of Service. Everything is in your name, so YOUR account gets suspended. Now, you're out of all that money with no return. The agency may not honor their return policy. If you take legal action against the agency, they use your money to fight your claims.

But is this the whole story? Let's see if these opinions are true or not.

What Are the Advantages of Amazon Automation?

You get your time back and create passive income as an Amazon seller.
Because you have more time on your hands, you might grow your business more quickly, or work on other investments.
You can achieve higher customer satisfaction.
Better customer service leads to repeat customers and more sales.
You may see a reduction in order processing errors.
If you choose a private label model, you may scale and sell your business more quickly. This could be up to 3-5 times its annual sales.

What are the Risks of Using an Amazon Automation Service?

The agency may not be transparent about their fees.
They may not explain their services clearly, like Apical Ecommerce.
The agency may present an overly optimistic time frame. In 2019 and 2020, only 14% of new Amazon sellers were profitable within their first 3 months of selling.
The agency or individual may take your money and run.
Amazon may shut down your store. In fact, this is common with Amazon Automation that's doing Dropshipping. When a suspension occurs, Amazon can withhold your money for at least 3 months.
Most of your profits may go to your agency. For example, rather than taking a cut from your profits, Just One Dime receives funds from your Amazon sales revenue. Raphael Vargas takes a 50% cut of your profits.
Many automation services use dropshipping as their business model. Dropshipping uses Amazon FBM. Amazon FBM business models have very little chance of winning the Buy Box. So, your sales will be lower.
Your agency may not have a refund policy or they might deny a refund request.

risk-of-amazon-automation-service-diagram

Amazon Automation Reviews

"When I started, I started with $15K-$20K which is not much, it's what I had. But you [Enopoly] have guys that made it work. And I had opportunity now to work on my other businesses, so I can invest more money.- Maribel, Enopoly client

"Amazon does not like when you start dropshipping on a new account because they don't have any type of trust with you, there's no faith that you can actually fulfill orders, and so on. Now, when it comes to this type, you will get suspended a little bit more often than the other ones and that is mainly due to the fact that you have to be beholden to the suppliers... if the suppliers out of stock, or they take longer to ship, or they don't give valid tracking information, those things can hit your metrics and in turn cause a lot of headaches."- Roughnecks Ecom

"All in all, I am enjoying it. Kinda weird to be joined in an investment, but it is fun as hell. Just sitting back and like watching all this stuff happening in the Amazon store I mean its great." - Ranga, on Just One Dime's DFY program

Does Amazon Allow Automation?

Yes, Amazon allows automation. In fact, many business owners use an Amazon Automation tool to take certain management tasks off their shoulders.

For example, Seller Labs has software and services that can automate your email marketing, customer satisfaction strategy, and more.

As long as you are operating within Amazon’s Terms of Service, automation is possible.

However, it becomes a major risk when you allow another company to have full control over your Amazon FBA business. If they use your account and do whatever they please with it, it becomes common for accounts to get suspended or even canceled.

Suspension can happen if a brand reports you, or if a bot picks up on a restricted keyword within your listing. There are thousands of ways your Amazon store can get suspended, especially if you’re following a dropshipping business model.

Choosing the wrong automation agency can heighten your chances of suspension.

Is Amazon Automation Illegal?

No, Amazon Automation is not illegal. But, some Amazon automation agencies and gurus make illegal claims. Anytime you see someone guaranteeing a huge ROI, know that this is against the law. The Federal Trade Commission (FTC) regulates these claims and does their best to hold scammers accountable.

Once a Complaint is Filed with the FTC, Do You Hear Anything From Them?

You may not hear from the Federal Trade Commission if you file a complaint, unless an enforcement action determines that you should receive your money back. Regardless, they will provide you with information on how to protect yourself in the future. If someone calls you from the FTC, make sure they have your reference number.

If you report a scam or fraudulent behavior, the FTC will take your report and investigate the individuals or business in question. In 2018, the FTC awarded over $9.1 million back to $13,348 customers of the Amazing Wealth System scam.

What is Amazon Dropshipping?

Dropshipping involves using a third-party (suppliers & retail stores) to conduct your inventory management- from storage, to packaging, to delivery. Sometimes, this third party manufactures the product, too.

Many Amazon automation agencies use dropshipping as their business model to make money online. Amazon allows this, but there are rules you have to follow. First, you must have an agreement with your supplier. This agreement guarantees that the supplier must identify you as the seller of the product. Second, you must handle all customer returns yourself, and follow Amazon’s other rules.

is dropshipping profitable? It can be, but it has the slimmest profit margins out of all the other Amazon models because you're simply the middleman.

Remember: With the dropshipping model, your profit margins are around 10%. So, if an automation agency is promising that you will receive a certain amount in profit, they also promise that you should make around 10x that amount in sales. And they also make a cut from your sales.

And this model has the highest rate of account suspensions. Is it worth all the risk?

Why Doesn’t Amazon Like Dropshipping?

Dropshipping creates confusion for Amazon’s customers and competition for Amazon FBA sellers.

When a customer buys something from Amazon but the box that shows up doesn't have Amazon on it anywhere because a retail store or supplier drop shipped it directly, the customer gets confused.

In addition, they want to attract Amazon sellers that will use Amazon FBA, their alternative to dropshipping. Amazon can charge a single Amazon FBA seller hefty fees and fines. They would much rather your product was in an Amazon warehouse, collecting $0.83 - $2.43 per cubic foot, than somewhere else. So, they make it difficult to work around their own services.

If a customer has issues with the product and contacts Amazon but they can't process any of the dispute because it has to be settled with a different retail store that dropshiped it. It creates bad customer experience and potentially fewer chances that customer will return to Amazon.

This is what Amazon fears most and why they dislike dropshippers.

What is Amazon FBA and How Does it Work, How Much Can a Beginner Earn Per Month?

When sellers purchase bulk product, store it in an Amazon warehouse, and sell on the Amazon marketplace using PPC ads, they are doing Amazon FBA. On average, a beginner FBA seller can earn up to $3,500 in profits per month, or $42,000 annually.

There are many Amazon FBA business models to choose from. Check out this related article on the Amazon FBA program to learn more.

How To Decide What Amazon Automation Companies are Worth It?

Do the research. Dig into YouTube videos, Reddit, and the company’s site. If you see a positive review, see if the company has an affiliate marketing program. These programs pay individuals for their positive engagement.

Finally, make sure they are upfront about pricing and their process. Some may require you to schedule a call, like Wifi Wealth. Above all, be critical of their claims. Even fairly common names, like Steven Mayer from Valiant Consultants, or Kevin David’s AMZ Automation, need to be looked into before giving them your hard earned money.

Here’s a breakdown of some prominent Amazon Automation companies in 2022.

Is Tommy Rodriguez Automation Empire Legit?

Tommy Rodriguez follows a dropshipping model. He requires his clients to have at least $15-$20K available on credit cards to keep business flowing until Amazon releases funds.

Note: If your account is suspended (and Amazon withholds your funds) you will have to make payments on this credit card with none of your available profits.

To work with this Amazon automation business, you have three packages to choose from:

$45,000

Suspension Coverage: Unlimited- they handle it and submit an appeal for you

Yearly Renewal Fee: $5,000 on the recoup of your ROI on the first year only

Profit Share: $500 or 70/30 profit share

$30,000

Suspension Coverage: 1 suspension/year

Yearly Renewal Fee: $5,000 on the recoup of your ROI on the first year only

Profit Share: $500 or 60/40 profit share

$15,000

Suspension Coverage: None

Yearly Renewal Fee: $5,000 on the recoup of your ROI on the first year only

Profit Share: $500 or 50/50

Suspension coverage? This doesn't mean you become immune to suspensions. It simply means their team will work on your behalf to communicate with Amazon in an attempt to reinstate your account. However, this process can still take months.

Tommy’s Team Will Take Care of:

Finding products
Purchasing products after the customer buys
Ensuring the supplier ships the product to customers
Fighting account suspensions (if your package includes this)
Everything is in house (except manufacturing and suppliers)
Any package gets you access to: In-person meetup events and other community access, their mobile app, and US-based customer support.

Cons of Automation Empire

It can take at least 12-18 months for Tommy’s clients to recover their full ROI. This time lengthens if your Amazon store is shut down. Sometimes, Amazon can suspend a client’s account for a year or more. This ties up their investment in inventory- after paying Tommy $15,000-$45,000.
Also, you won’t be able to pay Tommy and walk away. There’s actually some work you have to put into this “done for you”. First, open an Amazon Seller Account and set up your shipments and returns. Also, you will need to become tax exempt with one of Tommy’s chosen suppliers.

SUMMARY

For every successful testimonial that Tommy has, there are countless others stuck in the Amazon suspension purgatory. Their $30K investment frozen in time. Tommy's team does Amazon dropshipping and no matter how much they claim that it is not against Amazon's TOS. This model is the riskiest of all especially since 2021 Amazon is cracking down on this harder than ever before. In the long-term, it really makes little sense for Amazon to allow dropshippers because it creates too much confusion for the customer and Amazon can't be in full control over the product disputes & returns. In-depth break-down: Tommy Rodriguez Review

Just One Dime- Is it Worth Your Investment?

Just One Dime’s Done For You Amazon automation program follows a private label model. This means that you can resell your business in the future. Reselling is not as profitable- and often impossible- with a dropshipping model.

Just One Dime’s Amazon automation cost is:

$10K per product (and you must commit to 3 products) = $30K
15% of total sales revenue every 3 months
Annual fee: $3650 (breaks down to $10/day)

In addition, you need to cover about $5,000-$10,000 per Amazon product. Product inspection, photography, and any other necessary miscellaneous costs are your responsibility. They are not included in your initial $30K investment.

Without considering the sales revenue payments, your initial investment for Just One Dime will be around $99,650. This includes no miscellaneous costs.

What Does Just One Dime Do For That Price?

Conducts meetings with you
Tailor services to your vision of the future
Create a plan to scale your new brand
Product research and differentiation plans
Find suppliers
Price negotiations
Apply for brand protection programs

Run PPC ads
Apply new techniques to enhance sales
Add-ons like Amazon giveaways
Listing optimization
New product testing
Source products from the factory and ensure it makes to its Amazon warehouse

Remember, Just One Dime completes these services- but you cover any related costs.

SUMMARY

Just One Dime's full automation is taking the $30K investment and they'll actually launch 3 your very own products. So this is not dropshipping, which is great. But they do take a hefty 15% of *sales price* Not Profit, to do this for you. Which means they are always on the winning side of the equation and maybe they deserve to be if they're doing all the work. Here's how it breaks down: if some fee goes up or you have to reduce your sales price to deal with competitors and your profit margin % goes down, Just One Dime will still make their profit, even if you get to a point where you're close to breaking even. What does this mean? It means that Just One Dime is taking your money to launch new products, knowing that a lot of products that you launch won't turn out to have great profit margins. The Average profit margin in Amazon FBA is 20-25%. So if you do really well with the product and get 25% profit margin, after Just One Dime takes their 15%, you made 10%. If your profit margin was less, you could break even while Just One Dime still makes 15%. It's a way for Just One Dime to launch more products all the time using their client's money with minimal risks for them. Be realistic about the numbers, achieving 40% or higher profit margin on Amazon FBA is the edge case, not the common ground.

Forte Management Group by Travis Chisenski & Lisana Locke

Forte Management Group was established in 2022 by Travis Chisenski and Lisana Locke. The agency offer Amazon automation services but they lack detailed course information and proven effectiveness. Travis Chisenski's background is in music. While Lisana Locke has experience in marketing merchandise and managing international business. But their expertise doesn't directly align with Amazon automation. The company's services include logistics, product research, and store optimization. But, they lack external reviews and transparency. Given the high initial investment and the absence of verified success stories, clients should be cautious. The founders' diverse experiences don't guarantee success in e-commerce automation.

Price: An initial down payment of at least $40,000 is required to access Forte Management Group's services.

More Info: Forte Management Group Review

Summary: Are Amazon Automation Services a Scam?

Is Amazon Automation legit or scam? Some Amazon automation services are definitely scams. Others have shady or extreme aspects to them, but could deliver some decent returns in the short term.

Be careful with companies that promise you that they'll do EVERYTHING for you, and you don't have to lift a finger. You can make all this great money while doing nothing. When it sounds too good to be true, it usually is.

Here's the Catch 22. If the automation company is doing dropshipping, which is high risk because it gets targeted the most by Amazon for account suspension. They're essentially using your account as a sacrificial lamb. They can deploy more risky tactics because none of their own accounts are at risk of suspension, only yours.

Amazon Automation Agencies vs. Full Amazon Automation

There are true agencies out there that will handle a lot of the day-to-day management, grunt work for you. Like dealing with customer complaints, watching over the inventory, communicating with your suppliers on new shipments, responding to customer reviews, etc

These agencies are simply doing a service for a fee, and outsourcing these tasks makes sense if you're not going to build your own team.

This differs completely from a company that is taking over your account and selling whatever item they please with your account. Giving up that much control gets risky.

My Online Business Portfolio in 2024

Amazon FBA: $15K NET per month (After 50% split with a partner)

Local Lead Generation: $52K NET per month

Amazon FBA is a great business model but like all businesses it has its challenges, particularly how competitive it's becoming as more big brands & suppliers began selling on FBA themselves 2-3 years ago.

Another business model I've had a lot of success with is local lead generation. It's simple and less competitive. It might be a better fit for some people.

Click here to learn all about it: Local Lead Generation vs. Amazon FBA

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Ippei Kanehara

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$52K per month providing lead generation services to small businesses

Ippei.com is for digital hustlers, industry leaders and online business owners.

His #1 online business recommendation in 2024, is to build your own lead generation business.