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Plenty of people seek to start their journey as an Amazon business owner, but some shouldn’t. After all, this business opportunity has its downsides.

Today I’ll showcase those who shouldn’t start an Amazon business, to hopefully save them from the time and expense. It really takes so much to be successful.

I do this because I genuinely care about the right people getting started. Plus, there are some good alternatives available.

So let’s begin.

An Amazon business takes so much

You’ll be using tools to find a winning product to sell on Amazon. Following this, contacting suppliers and finding the ideal factory to produce your products.

Doesn’t sound like much? But here’s the scary part:

You’ll be sending money to a factory who you’ll unlikely ever meet, to produce a product you’ll ever see. Afterwards, they’ll hand your products to a freight forwarder who you’ll never see, who will charge you a small fortune to send your unseen goods to Amazon.

Then when your stock finally reaches Amazon, it’ll be handled by employees you’ll never meet and put on the shelves. Finally after months and months, customers, who you will never meet, then order your product(s) if they’re any good.

The icing on the cake is that some of these will return your products for no reason at all. Packaging opened. Unsellable. Straight into the rubbish bin. Yay!

Suddenly doesn’t sound so lucrative at all. You could lose every single dollar that you invest into your business.

So yes, becoming a successful Amazon seller takes courage. I have it, but not everyone does.

These following 5 people should never build an Amazon business.

The permanently broke individual

You simply can’t start an Amazon business and be successful if you’re permanently living with little to no money. There is a big expense which is your inventory, plus many more expenses along the way.

The broke individual shouldn’t consider Amazon, but look at alternatives such as Uber and Airbnb. These don’t take so much capital and are risky too.

The person expecting fast results

It’s well and good to wish that you’ll be making millions on Amazon by next year. Those mega-success stories you’ve heard of actually took years of work to come into fruition. Plus money. Lots of money. Those people had deep pockets.

I understand the excitement towards starting this new journey of selling on Amazon. I was looking for an Amazon course by an Australian seller, and I found it! But that wasn’t enough – I had to work to find success on Amazon.

Dirt cheap people

I’ve really taken a decent stab at cheap people multiple times on my blog. You know – those that don’t want to get education properly or invest in the right tools and resources. In 3 years time they wonder why their results are so minimal.

Cheap people won’t really find success here. You’ll need to keep pouring money into your Amazon business. Registering for multiple 7 day free trials on tools like ZonGuru isn’t really going to help you make progress, as smart as you think you might be.

Those who want guaranteed results

If you’re looking for a 100% guarantee that you’ll make money, then run from Amazon. Tie those shoe laces right now. Nothing in life is guaranteed, and quite simply, most people will not make a profit on Amazon. There, I said it.

People seeking guaranteed results are in the employee mentality. This is a business. A real business that requires risk and a crapload of work, not hoping and praying. Nothing here is guaranteed. I can guarantee that you’ll lose money at some stage in the journey, as I have 3 times over.

The older individual

I know – I’m going to cop some heat and controversy from this. I don’t recommend those who are 60 and older to get started in this Amazon journey. Some people see my results and think “If Joshua can do it, so can I!!” Yeah but, I’m in my 30’s with tech experience and years of personal development. Look: I was made for this.

Amazon is a risky business, as all businesses are. Don’t make this your last-ditch attempt. Unless you’ve genuinely got some past business experience and are happy to work in your retirement years, then give this a miss.

There is potential to lose every single dollar you invest in your Amazon business and you don’t want this to distract from your wonder years. Remember that Uber, Airbnb and Airtasker are good alternatives with less risk.

In closing

There is a false belief in the market that everyone is perfectly adapted to be a successful Amazon seller. Truth be told, that isn’t the case at all. Remember: Most people won’t make it.

These 5 people are some of which who won’t make it. There are more still to come. Plus, everyone makes mistakes. It’s all apart of the journey my friends.

My measurement of results is a full-time income and beyond. Some people do generate a good part-time income. Everyone will have to risk their capital and spend hundreds of hours before finding some initial results.

Play the long game. Avoid the gurus who promise success in 5 minutes. It won’t happen. And if you’re in this list, consider an alternative income stream. Because Amazon isn’t the only way to find success online.

There are many people who are jumping on board the Amazon bandwagon in the hopes of striking gold. After all, this opportunity has impressive upsides.

But there are certain things that you need backing you, long before getting started.

Not only will you need a strong and compelling reason to start this journey, you’ll need the mental toughness. That mindset to keep going through the challenges.

Then there is the biggest hurdle. The one that stops many people finding success.

That is money. Cold hard cash.

Touchy subject. You need money to start any business. Launching an online business is no different.

Today I’ll explain why selling on Amazon can’t be your gig (for now) but I’ll also highlight what you can do about it.

The hidden expenses

You’ll be coming across a range of expenses in the journey. Most Amazon gurus will hide this information, in order to sell their course. Only for you to find out later.

But I’m upfront. This post is public. Feel free to share it around. After all, some people are caught in the euphoria of Amazon courses, without seeing the reality.

Your expenses include:

• The initial investment into your inventory (your biggest capital outlay)
• Freight for getting your goods to Amazon’s front door, via air or sea
• Tools such as JungleScout to find the right niche and product to sell online
• Custom packaging if you intend to sell a more expensive/unique product
• Samples to assess quality before you place that first inventory order
• Amazons fees which include pro seller account, PPC, FBA and processing
• US Customs will charge you fees too, and guess what? They just raised it!
• Accountants will charge for advice plus setup of a new business structure
• Trademarks and patents are highly advised, and also very expensive too
• Finally, some of your products will be returned by customers. Ouch!

Suddenly selling on Amazon doesn’t sound that whizzbang fantastic, does it?

But wait, there’s more!

We haven’t even started our first Canton Fair experience yet. Here’s what you’ll have to expense for:

• There is the cost of flying to China ($700 economy to $4k on business class)
• Then the accommodation charges (Hotels jack up prices for the Canton Fair)
• Plus taxis and food for the few days (Watch for the dodgy and fake taxis!)
• …and the Visa itself is around $100! (Plus takes a lot of frustration to get….)

Amazon businesses are a bit like boats. You’ll constantly be pouring money in, long before seeing those rewards you were promised in webinars.

But those rewards do eventually come.

See – I sell on Amazon everyday. I went through the hard yards. There are some seriously impressive rewards here. But only for those who work + have some money.

Now, I had both qualities when starting. In fact, I started Amazon in the deepest and darkest period of my life. I made this work for me.

Finding the money for Amazon

If you’re starting, and you’ve got very limited money, then it’s not advisable that you even consider Amazon or a course. At least, not for now.

As you can see from the expense list I provided, you just won’t make progress with limited funds.

But what can you do in the interim? Well, by no means is this financial advice. But what I can say is: Hustle.

I live in Australia, and we don’t like being told that we need to work harder. This is, however, what it’s likely going to take.

Some ideas include:

• Getting an additional job to save up some extra starting money
• Selling your unwanted things online or via Gumtree (I did this)
• Seek to move into a higher paying job if possible (also did this)
• Reduce your expenses and income reducers (Foxtel, anyone?)
• Use Uber, Airbnb or Airtasker to build up that capital base
• Consider working for an existing Amazon seller part time

Expect 6 to 12 months of solid savings in order to attain some working capital. If you have credit card debt, then I would recommend paying this off first with said capital, as opposed to investing this into an Amazon business.

The truth about Amazon

What to know what it really takes? Ignore those who are saying you can get started with hundreds. Couldn’t be more further from the truth.

You’ll need $5,000 MINIMUM. $10,000 is ideal. This is above the course of your education.

Remember – there are plenty of expenses. It’s not just your inventory but many more as I’ve outlined here.

As I said, a bit like a boat. Keep pouring that money in… 😔

In summary

Amazon isn’t for the person who’s broke. Neither is it for the person who’s cheap. Certainly, it isn’t for the person who thinks they will make a million dollars by next year.

Please have realistic expectations. This business opportunity isn’t perfect either.

In fact, many beginners make mistakes. I know I certainly did in my early days. It’s all apart of the process.

An online empire takes years to come to fruition. So many courses are selling quick riches and success; simply capitalizing on people’s dreams.

Amazon is the #1 opportunity right now. Yet it takes money. If you don’t have it, then go work for it. Then really consider if this is right for you because 80% of people just don’t have the qualities to get them through the tough times.

I know – I’ve seen it. But if you’ve got what it takes, there is some serious potential here.

A lot of people who read my blog are new to Amazon and seek small MOQs for their new Amazon business. But there’s a catch – not all suppliers will say yes.

But some of them will!

In this post, I’ll be sharing how you can increase the likelihood that Chinese suppliers will agree to your smaller than normal order requirements. This way, you can launch your Amazon business with limited funds.

Let’s jump in.

Create a story

This is my 1st recommendation, so I’m leading with it. You need to run with a story in mind. I always propose you tell the truth, but be creative.

The straight up truth is that you:

• Have limited capital and can’t afford 500 units, or;
• Have the capital but don’t want to go ‘all in’ just yet

For that reason, I would recommend that you use some of these templates that I also use.

1. If you don’t want to go all-in just yet: “We’re expanding our business currently and are interested in your range. But we’re not entirely sure if our market will like the products that you produce. Would you consider a smaller order quantity?“
2. If you’re starting with limited capital: “Currently we’re waiting on additional funding as our business grows. For now, we’re seeking some new test products to add to our range. Would you consider a smaller MOQ?“
3. My current winner: “Our main market is the United States. Unfortunately, as you know, the additional customs duties is now reducing our profits. For this reason, we would need a small MOQ to test this new product launch for our customers.“

Please note that in those examples, I am using normal English that you and I understand. English is my 1st language, as I’m sure it is for you.

Chinese suppliers are likely to struggle to understand everything there, as I’ve used some ‘technical’ words. Most will say yes, but not truly understand what you’re saying.

For that reason, please reword these templates into more simple English. They will still see you as a professional if you approach with English that a 10-year-old could understand, since most factories only have a basic understanding of our language.

Things to avoid

There are things that you will want to avoid. Remember – you’re afraid of being scammed by the Chinese. They are just as cautious about you too. They want to know you’re the real deal. Some of these tips below have helped me in my journey.

Don’t say you have limited money

It’s harder to build a relationship if you flat-out say you’re broke. We’re really trying to hold off on revealing the true reason why we’re wanting a small MOQ. Remember that you’re trying to bend their minimums. These factories already run on tight margins. For that reason – tread slowly and sensitively.

Avoid conflict if they say no

There are literally dozens of other factories that can make your product. What you see on Alibaba is only a small portion of factories out there. Just like the Canton Fair, not all factories exhibit. Some are already at full production capacity, whilst others only have space for smaller clients like us.

Don’t say that you’re new to importing or selling online.

Oh man, this is one of the biggest rookie errors. Talk about one way to get taken advantage of. You’ll want to use your words strategically. Use something like “I’ve worked for many years and really know what high quality is.” See – you have not lied to them. You have worked for many years (in a job) and you know what high quality is (through buying products as a consumer), so you’ll be taken as a real importer.

Avoid straight up asking for a small MOQ for Amazon FBA

Whilst the objective is to eventually ask for a small MOQs for Amazon FBA so you can get started without such a big capital outlay, you’ll need to focus on building rapport first. Visiting the Canton Fair, keeping in constant contact and ordering samples are some good ways to build that relationship first, so they trust you.

Don’t start a PO until you have the smaller MOQ documented with company stamp

This sounds a little technical, but a PO is a Purchase Order. It’s a document where have all your specifics listed for the product for them to create. It’s a reference so if they mess things up, they will be liable, especially if they have the company stamp which is also known as the company chop.

Look at the bigger picture

What you’re really doing with small MOQs is attempting to ask a factory to make a special arrangement with you. You’re someone who they haven’t heard of before, probably doesn’t have a website, no history on Alibaba and can’t prove sales data.

Can you see that the Chinese factories are now skeptical of you? The tables have certainly turned. Most factories are real and many sellers do find their products have been produced with high quality. It’s generally the foreign person not keeping up their end of the deal.

Whilst they might say no, some might say yes! Here’s how:

• Make a firm commitment that you will seek larger ongoing orders
• Engage with them on WeChat and be very responsive to their questions
• Pay for samples, even if you think they’re pricey. It shows you’re serious
• Visit the Canton Fair and speak in person with the actual supplier in booth

I’ve personally found this approach works when engaging with new factories. Even today I still aim to have small MOQs for Amazon. This helps me in my Amazon business through testing and measuring results, before investing further.

Small MOQs are just one aspect

You can certainly start your Amazon journey with a smaller MOQ order to get your feet wet. Even if you have a 6 figure amount in the bank, I’d recommend that you learn the ropes first, before investing more into your Amazon business.

But it’s just one aspect. You’ll have to find the perfect product, the right supplier, ensure there is sales velocity and more. You’re dropping a new product into the world’s largest shopping mall, with your customers being your #1 critic.

Finally, remember to play the long game. Some Amazon sellers have built large businesses through starting at the minimum MOQ or below.

It takes years to really find success and the next 5 years will pass anyway. You might as well make a start with a tester product on Amazon through using the small MOQs strategy.

I build Amazon businesses to (eventually) sail around the world. This childhood dream is being achieved through Amazon, the #1 opportunity available today.

Build an Amazon business starts with a vision

It’s my belief that we should all write down, on real pen and paper, exactly why we’re starting this journey. It’s different for all of us. Mine is clearly written right here on the whiteboard next to me. I see it multiple times daily. Lagoon 52.

Where are you goals written down? And are they in clear sight? Are you friends aware of your dreams? Will they support you? If not, it’s time for new friends.

In this post, I’ll describe why building a business using Amazon is perfectly suited if you have ambitious goals as I do.

Scaling a business is easier

If you’re selling offline, you’re restricted by your geographical area. Amazon opens up an international marketplace. Starting in the US, you can then stretch to the European market before considering small markets, such as Australia and India.

Before the days of Amazon FBA, having a worldwide distribution was restricted to wholesalers and distributors. These were more challenging to work with, and would always result in you having thin margins. Now you have the choice of Amazon and/or offline distribution.

A 7-figure exit is possible

I know several people who have earned their early retirement selling on Amazon, through scoring a 7 figure exit. Was this easy? Hell no! There is a serious amount of work involved. Not for the faint-hearted at all.

But catamarans aren’t cheap either (yes, I’m looking at you Lagoon 42′) and the ongoing maintenance is costly too. A 7-figure exit is the easiest way to realize that dream.

Amazon allows the laptop lifestyle

Amazon is one of the few ‘vehicles’ that allows the laptop lifestyle. That is, you can cross an entire ocean (3 to 4 weeks) without really needing to put too much attention into your business, especially when stable internet is difficult to find. You can generally pick up from where you left off.

There are helpful services such as ZonSupport that can look after your customer service whilst you’re out of range. Even if you’re on fast-speed internet, there is no need to be located in a specific area. I could be anywhere right now, but I am genuinely home on the Gold Coast. 😜

The hours weekly are minimal

Starting an Amazon business requires 5 to 10 hours per week. Most people can find this, most just can’t find the money to start their business. There is a lot of flexibility here, and you can skip work for days if needed.

But unlike starting another business from scratch, you can begin on minimal part-time hours. I built my business during the evenings and weekends, even with a job that I actually enjoyed (but the hours were long…)

Logistics are all sorted

Amazon looks after your shipping to customers. Your packages are sent without needing a physical location, unlike a Shopify business or selling on eBay without 3PL.

Products are also manufactured generally in a 3rd world country. Your supplier then preps the product whilst your freight forwarder organizes the handling all the way to the United States. In my business, I am merely the conductor of this, and it gets easier over time.

A freedom-business is the most attractive

Many people are waking up to the potential of living anywhere in the world and having an online income stream. Amazon businesses, therefore, are very attractive.

They give strong cashflow returns with potential to scale the business further. There are some companies who purchase ready-made and profitable Amazon businesses every month, given the financial returns. So if you’re looking for a buyer, you’re in no shortage, provided you’ve got a rock-solid business.

Creating your dream

As I mentioned, you need a strong and compelling reason why you want to do this. Otherwise, what will get you through the tough times? Faith? Luck? I’m not counting on those.

I back myself with knowledge and motivation. I know my goals which are clearly written beside me as I type. Your dream starts with writing down the results that you’re looking to obtain right now. From that, Amazon may be the right vehicle for you.

With those upsides, also comes the downsides. This takes lots of work. But the capital, work and mindset required keeps a lot of people on the sidelines. I look forward to continuing to help people through the challenges.