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Is Amazon Automation a Scam? A Seller’s Guide to the Latest Amazon Craze

With AI increasing efficiencies across the board, some companies are now offering a “business in a box,” often called Amazon Automation. But is it legit? Let’s find out…

  • September 20, 2023
  • /
  • Chuck Kessler
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Not to go down a rabbit hole, but when I first heard about the idea of an Amazon automation scam, I didn’t know what to think. We all know that Amazon, the world’s biggest ecommerce platform, attracts countless entrepreneurs, dreamers, and hopefuls, all vying for their slice of the retail pie. 

With the allure of passive income, many are drawn to a variety of different get-rich-quick schemes that are going to be present whenever there’s a lot of money to be made. Still, for one main reason, this idea of an “Amazon automation” scam seemed like a stretch to me. 

That’s the fact that automation is at the heart of many of the practices that Amazon – and sellers on its platform – use to be successful. 

For example, let’s take the Fulfillment by Amazon (FBA) platform. Anyone who’s ever taken the (closely monitored) Amazon warehouse tour knows that it’s ground zero for the majority of Amazon sellers and a big part of their ecommerce success. 

It’s also home to a lot of diligent robot workers. 

FBA allows sellers to outsource order fulfillment to Amazon. When a customer makes a purchase, Amazon fulfillment specialists can pick, pack, and ship the order. Amazon also provides customer service and process returns for those orders.

What’s not to like?

Then there’s the Amazon advertising’s platform automated bidding automation that systematically optimizes bids for the new placements in order to improve conversion.

However, as I looked closer at the search results, I quickly realized that there was something else going on, and it wasn’t good.

A screenshot of video thumbnails about Amazon automation.

Understanding (this Version of) Amazon Automation

Yes, this was something else altogether. In simple terms, it’s a hands-off approach to selling on Amazon. A third-party company manages every aspect of your store – from product research, sourcing, and listings to shipment and customer service. 

In return for this service, these companies typically demand an upfront fee and a share in the profits.

The promise? Sit back, relax, and watch the profits roll in. But can it be that easy?

After listening to just a few videos promoting “Amazon automation” services, here are some of the ways that this program is presented:

To be fair, let’s look at why more than a few would-be entrepreneurs have opened their wallets and tried this path to a passive income. There’s got to be something that’s monopolizing all this internet bandwidth, right?

Decorative. A robot finger meets a human finger.

Possible Amazon Automation Selling Points

For novices, Amazon’s ecosystem can be intimidating. Automation services promise to bring experts to your table. They claim to know the ins and outs of the platform, and theoretically, their experience should give you an edge.

Amazon automation claims to speed up the process and free up significant time, allowing investors to focus on other ventures and carry on with their everyday life. 

With scalability the goal of most if not all Amazon sellers, in theory, having a team dedicated to your store, scaling seems to be more attainable.

Screenshot of search results for "amazon automation" with red arrows pointing out "scam"

Big Amazon Automation Red Flags

Unfortunately, like many promising ventures, there are associated risks. With done-for-you Amazon FBA business automation, there are many. 

Many Amazon automation agencies charge high upfront fees. This can range from $10,000 to $30,000 or more. For sellers, this is a steep price to pay, especially with no guaranteed returns.

Then, these “automated” Amazon sellers still need to fork out for the inventory that they hope to sell on the platform. On top of the upfront costs, many of these services take a percentage of monthly profits. This can significantly reduce an investor’s ROI. 

Even worse, by handing over the reins, sellers lose control over their business. The problem is that in severing any real connection with their business, sellers don’t learn the kind of “online commerce 101” skills that many entrepreneurs attribute to their later success.  

How Amazon Sellers Can Actually Automate Their Ecommerce Business Today

In recent years, the term “Amazon automation” has come to mean something else altogether. It now encompasses a broader range of services and technologies, everything from AI-driven content creation to full-service account management offered by top Amazon agencies. 

These new automations can be game-changers for sellers, streamlining operations and optimizing sales. The continual advancements to artificial intelligence and machine learning have allowed Amazon sellers and agencies alike to save time, by tailoring content to precise ecommerce niches. 

For example, AI can help sellers analyze enormous amounts of data in order to find out the search terms really driving sales and use that information to determine how to best appeal to a specific target niche. 

That results in a highly optimized, effective Amazon product listing.

Selling on Amazon – or on any marketplace – isn’t a static, set-it-and-forget-it exercise. It’s constantly changing. AI continuously monitors listing performance and makes adjustments to react to changing market dynamics or customer preferences.

As long as the machine (AI) serves the human, and not the other way around, automation can be a very good thing! 

Making the Right Choice in Automation

Not every seller will benefit equally from AI-driven content creation or agency management. It’s essential to assess where automation can add the most value. For some, it might be optimizing listings, while for others, it could be comprehensive account management.

Automation doesn’t mean disengagement. Sellers should remain involved in order to understand what the AI or agency is doing and why, and then to regularly monitor the performance metrics.

Modern Amazon automation, whether through AI-driven tools or specialized agency management, offers sellers exciting opportunities to scale and optimize their operations.

A man scientist writes on a clipboard in a lab.

Amazon Agency Account Management Offers Accountable Automation

While the best Amazon agencies do use a few automated practices, for the most part, the reason for the increased popularity of Full Service Amazon Management has to do with the bespoke, or carefully handcrafted “personal” attention that individual Amazon sellers receive. 

It’s one way that Canopy Management can achieve the kind of powerful sales figures it does for its partners. With a track record of growing client profit by 87% on average and a 98% client retention rate, Canopy is the quiet force behind some of Amazon’s most successful brands.

After all, if success on Amazon’s marketplace was as easy as automating everything – with our untethered access to AI and automation – there should be a leveling out of success on Amazon’s marketplace. 

But we’re not seeing that. Instead, individual Amazon experts are using automation in order to free up bandwidth so that they can hand craft individual strategies not just for individual Amazon sellers, but sometimes for micro events within an interlinked online sales and marketing strategy. 

The need to understand the Amazon platform’s constantly changing algorithms, policies, and recommended practices has never been greater. Artificial intelligence can only do so much. The heavy lifting will continue to be done by human experts with the Amazon IQ to balance AI with the mercurial changes endemic to ecommerce.

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