What is Amazon Automation, How Does It Work? 5 Controversial Facts

July 7, 2023

What is Amazon automation? Amazon automation is the use or application of an agency, individual, or software to outsource tasks within the Amazon FBA business model, minimizing the effort spent by the owner of the Amazon store.

How does Amazon automation work? If you use an Amazon automation agency, it works by simply signing up for the agency of your choice, paying the fees, and letting the agency take over. If you choose to hire a virtual assistant, you’ll need to train them in your processes. For a software, simply choose the software you want, download, and troubleshoot any issues that arise.

Amazon automation sounds like the answer to many problems- after all, Amazon automation is not passive income, and a new FBA seller might spend dozens of hours a week setting up their new business with little return. However, there are 5 controversial facts you need to be aware of before starting Amazon automation that may ruin your business before it’s even begun.

I used to do Amazon FBA, and found that the time spent on the business just wasn’t worth the ROI (among other major challenges with the business model, like lack of control.) Instead, I found local lead generation, where you rank a site you own organically at the top of Google, and generate leads for local clients.

5 Controversial Facts about Amazon Automation (and Why It Matters to YOU)

1. Amazon automation services make false claims.

These exaggerations present making money on Amazon as an easy task and convince potential new clients to sign up. One of the most common claims is:

“Why don’t we just create more stores under our own name? Well, it's illegal to have more than one Amazon Seller Central account. So, we use our skills to make both of us money!” It’s NOT true that you can only have one Amazon account. But, with each Amazon store, there is more work and risk involved. 

Why it matters: By using their skills to make money with your store, they only get reward while you shoulder all the risk. You'll have to sign a contract before you start, and that contract guarantees they’ll get paid whether your store succeeds.

2. Amazon automation eats into your profits.

Amazon automation is expensive- especially when an agency charges around $30,000. Of course, this lengthens your ROI. But, Amazon automation profit shares are far worse. Most Amazon automation agencies collect some amount of profit share from their clients.

Why it matters:  Amazon automation agencies put no money in, but take a certain percentage of. Often, these percentages are above 50%, meaning that you will get less than 50% of the earnings from YOUR business.

3. There are few real Amazon automation success stories.

Part of the contract you’ll sign with an Amazon automation agency might include an NDA. NDA stands for nondisclosure agreement. This keeps you from sharing certain information about the company and your experience with it.

Why it matters: If you’re signing an NDA, all other clients also sign that NDA. This means you haven’t seen a full, honest review of that company. In fact, you’ve probably only seen feedback from affiliates who are paid to promote these companies.

4. Some agencies have virtual assistants do the work, not the experts.

Many automation agencies have an “expert” front man- someone who has verifiable experience making millions of dollars with Amazon FBA. However, this person probably doesn’t do much with handling your store. They may outsource every process to virtual assistants overseas.

Why it matters: You’ll have no control over the virtual assistants in charge of your store. You won’t be able to choose who handles your personal information. Ultimately, you could hire your own virtual assistants to do the same thing and save the tens of thousands of dollars going to the millionaire middle man.

5. Most Amazon agencies follow a dropshipping model… which leads to account suspensions and deactivations.

Amazon dropshipping is not illegal. It isn’t even against Amazon’s Terms of Service. But, dropshipping from other retailers like Walmart or Home Depot is. Customers are confused when they order an item from one marketplace, and it arrives from another. 

Home Depot and Walmart run the best deals. So, these retailers provide the best profit margin for dropshippers. But, you can’t ship something marked with Home Depot on Amazon. You’ll have to make sure that the external packaging has no logos or information for other retailers. Or, you can completely avoid retailers- minimizing the profits you’re already sharing with the agency.

More products and brands are becoming gated, meaning you’ll need special documentation to sell these items. Dropshipping involves a lot of buying whatever you can find good deals on, and so you won’t be able to get approved for all these brands before you want to list the products.

Why it matters:

Can You Buy an Existing FBA Business?

Yes, you can buy an existing FBA business. This is an expensive move, but one that can save you valuable time. Another way to avoid Amazon account suspension is to slowly season your account using wholesale tactics for a few months. Then, when Amazon isn’t watching your account as closely, transition to dropshipping.

What Are the Risks of Using an Amazon Automation Service?

The Amazon agency sells no products, leaving you out $30K+.

Amazon suspends your Seller Central account and freezes your funds.

You max out credit cards trying to pay for product and can’t pay them back because your account is shut down.

Your credit score plummets.

You buy bulk product, and the brand gates it before you can sell it all.

What are the Benefits of Amazon Automation for Amazon Sellers?

Could use more real-world examples. What brings value is the coach explaining his own unique story of struggle & triumph. This was lacking. The training is comprehensive, but feels generic at times.

No live coaching calls, the head coaches are not very accessible compared to other programs. Support is provided through the forum only.

It's unclear if the head coaches are actually building high-level Amazon businesses today or not.

What is an Amazon Automation Business?

An Amazon automation business is a company that manages your Amazon store for you. Some Amazon automation businesses take over every process, from account set up to customer service. Others handle specific tasks (like product research strategies and fulfillment methods) which must be discussed before buying in.Other names for an Amazon automation business include:

  • Amazon automation program, 

  • Amazon automation service, or 

  • Amazon automation agency.

Amazon FBA automation is rare, as most Amazon automation businesses run on a dropshipping model. With Amazon FBA automation, the business must use the fulfillment services that Amazon FBA offers in their warehouses. This involves following a business model like wholesale or private label. Dropshipping bypasses the FBA warehouses and sends product directly from another supplier (like Walmart or Home Depot) to Amazon customers.

What is an Amazon automation store?

An Amazon automation store is a running Amazon store with processes that happen without the owner’s effort. An Amazon automation business can create an automated Amazon store for you.

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How Can Amazon Automation Programs Help Your Business?

Amazon automation programs help your business by running repetitive tasks, like repricing, stock monitoring, order tracking, and more. 

Amazon automation is important for business owners because it frees up their time. Instead of spending hours a day checking their inventory, you can:

  • Enjoy passive income

  • Spend your time doing higher-level planning for your business

  • Work on other businesses

  • Add another income stream

How Much Does it Cost to Start an Amazon Automation Store?

Amazon automation cost is around $25-$30K depending on the business you choose to work with. Automation Empire through Tommy Rodriguez is $45K for the lowest offered profit share (70/30), plus a yearly $5K renewal fee. They offer a full service automation store, which differs from FBA Academy Done for You by David Zaleski. Rather than offering a full store, they will provide additional support and 3 test products for only $4997.

Is Amazon Automation Legit?

Yes, Amazon automation is legit, but some Amazon automation businesses are not. Consider Just One Dime, who recently filed for bankruptcy, barely a few years after launching their Just One Dime DFY program (which charged many students over $30K with no results). So, Amazon automation is a great way to free up your time. You can accomplish this by using Amazon automation tools or hiring VAs to help you. Even David Zaleski’s support based DFY program is better than paying tens of thousands to another company you might not trust.

How to Start Amazon Automation

  • Choose which processes you want to outsource. Sellers often outsource more time heavy tasks, like order fulfillment or customer service. 
  • Decide if you want to use an Amazon automation business, an automation tool, a combination of automation tools, or virtual assistants. Seller Labs offers a mix of both automation software and services.
  • Purchase the tools/service, or hire and train your virtual assistants. You can do this at any stage of your business, whether you’re first starting out or just looking to optimize current operations.

If you choose to go for an Amazon automation company, choose one that you trust. After all, you’ll give them tens of thousands of dollars and share profit with them. Next, we’ll cover tangible ways you can test which company you trust. Without knowing this information, you risk losing over $30K to a scammy company.

How to Decide What Amazon Automation Companies Are Worth It?

To decide what Amazon automation companies are worth it, ask several businesses the following questions:

  • Where Will Your Products be Fulfilled From, Can You See the Warehouse? Some automation companies follow the dropshipping model and will never see your product. Others, like the Amazon automation investment company Wealth Accelerators, have their own warehouses where you can visit your product. The CEO of Wealth Accelerators, Mike Sancho, actually offers a $500 travel stipend for you to see their warehouses prior to signing up. Amazon automation investment companies are very similar to automation companies- the only difference is that they are a true investment opportunity rather than a service you buy. This might be a better choice for you, and we’ll discuss it more below.
  • What is the Total Cost for Amazon Automation and What is the Profit Share? Some Amazon automation companies will take over 50% of your profits on top of the initial cost.
  • Is There a Maintenance Cost on Top of Profit Share? Tommy Rodriguez charges an annual $5K fee to keep his services coming (on top of the $15-$45K + profit share). Some companies may have unrealistically high costs, and you must make sure their services are worth it.
  • Do I Need a Credit Line? Amazon automation companies typically require their clients to have around $10K- $30K in credit cards open, and demand access to these cards. This way, they can continuously order more inventory for you, regardless of when Amazon pays you. Keep in mind Amazon takes about a month to issue your first payment, then every 2 weeks after.
  • Do I Have to Sign an NDA? If you do, this is a major red flag. It means that there are no negative reviews online, because other clients have also had to sign an NDA. Therefore, you have only been told positive aspects about the company, and your opinion may have been manipulated.

Why are Amazon Automation Agencies Sometimes Referred to as Investments?

Amazon automation agencies are sometimes referred to as investments because the company wants you to trust them. They know many people look for new investment options, and an Amazon automation store may appear as a groundbreaking new business. But sometimes, the Amazon automation company may be a legit, passive investment.

What is Amazon automation investment? Amazon automation investment companies are essentially the same service, but market this service more clearly as an “investment” opportunity.

Top 5 Ethical Full Service Amazon Automation Agencies

Read our full list of Amazon automation agencies to find the best team for you.

Can You Create 5 Passive Income Streams from Just One Dime?

No, you can no longer create passive income streams using Seth Kneip’s Just One Dime Done For You services. On November 23, 2022, Just One Dime filed for bankruptcy, after being sued by one of his clients for breach of contract. Read the entire story in our Just One Dime Done For You review.

What To Do If an Amazon Automation Agency Doesn’t Fulfill Their Promises

If your Amazon automation agency doesn’t fulfill their promises, you can sue them like Just ONe Dime’s customer. You can also file a complaint with the Federal Trade Commission. The FTC monitors online businesses, and will investigate your claims and the business itself.

When Your Complaint is Filed with the FTC, Do You Hear Anything from Them?

No, you won’t hear anything from the FTC after you file with them, unless they determine you should get money back.

How to Automate Your Amazon Business (Without an Agency)

Can You Automate Amazon Orders?

Yes, you can automate Amazon orders without using FBA. Some tools that help with order and inventory management include Skubana and E-Seller Hub. (Note: Amazon can also suspend your account if your inventory level falls too low, and you can’t fulfill orders.)

How Do You Automate a Shipment on Amazon?

To automate shipments, use a platform like ShipBob. ShipBob has 23 US warehouses, works with 9 shipping partners, and offers consistent support for their clients. Their error rate is only 0.05%, and they cost about 33% less than Amazon FBA.

How Do You Automate Purchase Orders on Amazon?

To automate purchase orders, consider using a service like KhooCommerce. KhooCommerce, based out of the UK, is focused on PO management. It also offers support, bulk processing, and more.

The Importance of a Good Amazon Review

How many times have you bought something on Amazon with zero reviews? Probably never! This is because the amount of reviews a product has, along with the amount of positive vs negative reviews, directly correlates to what products are shown on the Amazon search results. Automating customer service can help keep your customer reviews on the positive side.

Amazon suggests using a virtual assistant, Interactive Voice Response software, or their own chatbot to help with optimizing customer service, if you aren’t relying on FBA for customer satisfaction.

What are the Best Software Tools for Amazon Automation?

  • Yaballe- automatic repricing, product listing, order processing, and connections with suppliers like Home Depot
  • Feedbackwhiz- order management, email marketing automation, and of course- help with feedback
  • Hustle Got Real- product research and listing, order and stock management, automatic price ordering

What is AMZ Tracker in Amazon?

AMZ Tracker is an Amazon seller software that assists with keyword tracking, URL optimization, and more. It even alerts you when you get negative reviews, or when your listing might get hijacked.

What is the Best Amazon Accounting Software for Sellers?

Quickbooks is the best overall accounting software for all kinds of businesses, including Amazon selling. However, it comes with a steep learning curve. Finaloop is another option that’s a bit more automated.

Which is the Most Popular Amazon Automation Tool?

The most popular Amazon automation tool is Helium 10, though it isn’t only an automation tool. In fact, Helium 10 offers a full suite of tools that can either completely automate or simply speed up the process of some Amazon selling processes, like keyword tracking.

Automation Options within Amazon

Does Amazon Have Automation Options Already Integrated?

Yes, Amazon offers their third party sellers several features that automate certain business processes. For instance, the Brand Dashboard automatically updates metrics so that you get a clear view of your customer service metrics and sales without having to do the research yourself. But, there are more tools within Amazon’s platform that offer automation features.

What are some Tools Amazon Uses to Automate?

Some tools Amazon uses to automate are:

  • Order tracking tools,

  • Stock monitoring tools,

  • Marketing tools,

  • Fraud prevention tools,

  • Customer service tools,

  • Sales tracking tools, and

  • Automate Pricing.

What are the Benefits of Amazon Automate Pricing?

  • Optimize your product’s prices instantly

  • Monitor competitor prices and adjust accordingly

  • Higher chance of winning the Amazon Buy Box

  • Potential for increased Amazon sales

  • Possibility of improved profit margins

How Does Amazon Use Automation?

Amazon uses automation through the use of robotics in its warehouses. This part of Amazon used to be called Kiva Systems, but is now Amazon Robotics.

How many Automated Warehouses Does Amazon Have?

Amazon has no fully automated warehouses, but they’re close. In June 2022, they debuted a robot that works completely automatically within their warehouses.

When Did Amazon Start Automation?

Amazon started automating their processes about 10 years ago. Even with the additional robots, they have added over human one million Amazon workers as well.

What Type of AI is Used in Amazon?

Amazon uses automatic speech recognition, natural language processing, facial recognition, object recognition, and predictive analytics.

Amazon FBA FAQs

What is Amazon FBA and How Does it Work?

Amazon FBA is a service provided by Amazon that allows sellers to store, pack, and ship their inventory without doing it themselves. To do Amazon FBA, the seller must sign up for an Amazon seller central account, send their products to an Amazon fulfillment center, and pay the fees. On top of this, they must keep track of all the Amazon Terms of Service to avoid having their account suspended and funds frozen.

Wondering How Much Money You Can Make Selling on Amazon?

You can make anywhere from less than $500- $250,000/month in sales (not profit), depending on your product, the amount of money you spend on ads, and other factors. Most Amazon sellers make between $500 (or less) to $5K/month.

Does FBA Still Make Money?

Yes, Amazon FBA still makes money for third party sellers. The entire Amazon marketplace made $469.82 billion in 2021, up from $386.06 billion in 2020. But it's not the passive income model that Amazon FBA coaches want you to believe.

Does FBA Require Money to Start?

Yes, to start Amazon FBA, you must have at least $3,720. But, for your best chance of success, you should have over $13,495 so that you can cover expenses like professional photography and another batch of inventory. For more information, read our guide on Amazon FBA startup costs.

Can You Start Amazon FBA With No Money?

Yes, you can start Amazon FBA with no money- but you will only be able to sell 39 products max a month, and you’ll have to sell items you already have. This is called retail arbitrage.

Can You Start Amazon FBA with $500?

Yes, you can start Amazon FBA with $500, and it's better than starting with no money at all. With $500, you could pay for a few months of a Professional Amazon Seller Central Account ($40/month) and a tiny initial inventory. But you won’t make a lot of money this way; you’ll need a product research tool and other help (that comes at a cost) for a higher chance of success.

Can You Start Amazon FBA with 1000?

Yes, you can start Amazon FBA with $1000, but it’s still not enough to bring in a significant return. You might order a larger inventory, or spring for sample products, but you’ll still be short by about $2,700.

How Much Can a Beginner Earn on Amazon per Month?

A beginner can earn up to $5K/month, but it will take 4 to 6 weeks for that payout to start, if it does. And, it may take Amazon a month to process this first payment.

Can You Create Passive Income Selling Products on Amazon?

Yes, you can create passive income selling products on Amazon, but it will take months (or even years) to get the processes automated, and the quality controlled. There’s no overnight success here; you’ll have to do product and keyword research, learn how to craft a product listing that converts, vet suppliers, order product samples, handle returns and more.

What is the Best Amazon FBA Course?

The best Amazon FBA course is Tim Sanders’ Private Label Masters. This course teaches the private label business model, which involves creating your own brand and placing your logo on products. This is the most expensive Amazon FBA business model, but it has the most chance of success- and a far less chance of Amazon account suspensions.

What is Your Top Recommendation for Making Money Online in 2022?

My top recommendation for making money in 2022 is local lead generation. Unlike other online business models that are subject to massive platforms (Amazon, Shopify, etc), you stay fully in control. You’ll create a website that promotes a local service, collecting leads for small businesses. You own that website, and won’t have to worry about account suspensions.

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Ippei Kanehara

$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.

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