Amazon FBA (Australia) vs eCommerce: The Brutal Truth

Can you really make money with Amazon FBA in Australia?

Short answer, Yes. Long answer, it's incredibly difficult. 

Today I'll be showing you the brutal truth about Amazon Australia and why it's one of the most difficult business models a beginner can start. 

There's many courses out there that target Australian's looking to get a leg up in a hard economic situation. They prey on low and middle class individuals, looking for financial success.

Chances are if you're reading this, you'll know of a few courses. Most of these cost $997 to $9997, just to get into the elite members area. They promise coaching, product selection and financial freedom.

In the small print, you'll learn that financial success is dependent on your work ethic, how much time you invest, your choice of products and ultimately nothing is guaranteed.

Why Amazon Australia Is So Difficult?

These courses talk about Amazon Australia like a global business. Amazon USA and UK is not the same thing as Amazon Australia. 

But they simply don't tell you that. They show you success stories from selling on Amazon.com, which is a different marketplace to Amazon.com.au. 

Sparsely Populated & Slow Delivery

Australia is a small country in terms of population, but it's also one of the most sparsely populated countries that Amazon has entered. 

Amazon USA offers one day free delivery on all purchases under their Prime service. They offer something similar in Australia but it takes a minimum of 2-3 working days. Ordering on a Saturday, your goods won't arrive until Wednesday afternoon.

In the eCommerce world, consumers want fast delivery. Sites such as eBay are far more popular in Australia. Additionally sites such as Gumtree, classified ads and small business websites are thriving. 

In the UK, USA and Canada, Amazon all but wiped out the small businesses and due to the huge population, they have become a household name.  

But in Australia, Amazon has struggled. They have two warehouses, one in Perth and one in Melbourne. 

Poor Feedback System

Amazon Australia has less buyers, so when creating your product you'll become a victim of Amazon's feedback system. You start with zero feedbacks.

Most buyers see this zero feedbacks as a risk and probably will buy from another seller. This encourages fake reviews and often you'll need to give away your product for free to reviewers to build feedback. 

As soon as you get a negative, you can't reply! You're stuck with that feedback. 

Shoddy Refund Policy

Amazon collects customer payments on your behalf. As part of this process and under Australian law, buyers are entitled to a generous refund policy. 

If your buyer wants a refund, Amazon takes the money from your account. What's worse is that Amazon will charge you a return postage fee that allows them to provide a return label to the customer. 

You have absolutely no say in whether a customer gets a refund or not. 

And if you're selling electronics, you refund rate could be 1 in 3 sales. 

Expensive Fees

This is the biggest issue and no course vendor will tell you about this. You have to pay Amazon for pretty much everything you do. 

Initially you'll pay a storage fee to have them keep your products. If you don't provide the right barcodes you have to pay for someone to manually add these for you. 

If your products don't sell after 12 months you have to pay a long time storage fee.

You have to pay to ship your products to Amazon, and back to you if they don't sell. 

You have to pay 20% success fee on EVERY product sold. This is crazy! 10% goes to Amazon and the other 10% goes towards marketing and promotions, i.e. affiliates promoting your products. 

You have to pay a shipping fee and packaging fee on all orders to your customers

Before you know it, you're losing 35-40% on EVERY sale. 

But, you're told that you can absorb this cost if you have a winning product. Which brings me to the next point.

Rife Competition

I'm sure you've seen Amazon products with multiple vendors. In theory the cheapest vendor gets the main spot on the page. As long as they are selling an identical product. 

This means one day you might have lots of sales, the next you have none as a competitor outbid you by $1.

But what happens when that new vendor is selling fakes or inferior products?

Yep you guessed it, your pages feedback get's a negative and that impacts your future sales as future buyers assume you were responsible for that negative. 

Have a look for a product, you'll see lots of listings all selling the same products. This is to avoid backboning off someone else's shoddy feedback. 

Amazon FBA Is Expensive & Risky

How much capital do you need to buy products? That may or may not actually sell.

Well that depends on your choice of products. I've seen people spend $500 to $500,000 on stock. 

Can you afford to buy products that might not sell? This is how most retail stores go bankrupt. Holding too much stock that they can't sell. 

Would you go to China to find your products? Or would you buy products blindly online?

What about the quality? What if you buy products that arrive defective or don't work?

What about electrical products? Have they been tested to Australian standards? 

Can You Make Money With Amazon FBA?

Yes you can. If you look at all the negatives above, you could potentially find a winning product that offers huge margins, that sells like gold dust and makes you lots of money.

Worldwide there's over 100,000 people like you making $1,000,000 per year from Amazon. That's revenue, so i'd say they'd be making 10% of that, approx $100,000 per year.

Now that's worldwide, not Amazon.com.au! 

Amazon hasn't told us how many Aussies are making over 7 figures on their platform. What does that tell you? 

But you could be the first!

Why eCommerce Dropshipping Is Better!

I'm sure you've heard the term eCommerce and Dropshipping. 

eCommerce is the process of creating your own store. Gone are the days of hiring a developer or spending thousands. You can create a store for $29 using Shopify.

How It Works

Dropshipping is the process of selling someone else's products for a profit. Simply find a supplier and list their products (use their images, descriptions) on your store. If someone buys from your store, you use that money to go and buy from the supplier who blindly ships the product in discreet packaging direct to your buyer.

Your buyers can be anywhere in the world, not just Australia.

You pocket the difference. Imagine selling a kettle for $100 that cost $50. You'd make $50 gross profit.

You have no upfront investment, no stock purchases and no expenses.

In the Amazon model you'd buy the kettle upfront. Import it, store it with Amazon and then sell it. 

If the kettle doesn't sell, with dropshipping you've lost nothing. On Amazon FBA you've lost $50 + storage fees.

Dropshipping allows you to test products super fast. If they don't sell you can try something else. 

You can find suppliers in Australia, USA or China. Most suppliers offer dropshipping as it offers them another avenue to sell, rather than selling wholesale.

When selling on your own store you keep 100% of the profit. Yes, you might have 3% payment fees, but that's a lot less than Amazon's 30%!

The difference with your own store is that you must drive traffic, but this has it's benefits too. Rather than relying on Amazon customers, you can go out and generate traffic using social media, paid ads and influencers.

This is the hardest part, but if you learn how to generate traffic, you can make a lot of money.

Most businesses don't know how to advertise, so learning this part is an important step in your eCommerce business. If you can learn it well, you will be making a lot of money!

But how do you learn eCommerce and marketing?

A course I recently took called eCom Elites offers the entire A-to-Z process of starting a store, finding winning products and creating ads and generating traffic is the place to start.

This course is a fraction of the $2500+ you'd pay elsewhere. It provides over 180 videos on the entire process, over the shoulder training.

For this you pay $197-$297. No hidden fees, no upsells. 

Yes a crazy low price for what I recon is the best eCommerce dropship training you will find anywhere online. My intention here is to help you learn from the best, not promote the course with the biggest payday.

Ultimately you can spend thousands on the same information, or you can buy the oldest and most well reviewed course on the market for under $300. 

So why am I promoting this? It's simply the best information, at a rock bottom price. Over 15,000 students have enrolled in this course to start their own eCommerce business. At that price, if you decide the business model isn't for you, you haven't lost your life saving's. 

What You’ll Learn Inside eCom Elites?

1. How to create a Shopify store step by step
2. How to find winning products
3. How to find suppliers that dropship
4. How to test new products
5. How to create descriptions, images
6. How to create Facebook Ad campaigns
7. How to create Google Ad campaigns
8. How to work with Instagram Influencers 
9. How to scale your business
10. How to deal with difficult customers
11. How to handle returns and refund requests
12. How to automate and sell your store.

You Could Sell Your Store For 30X Revenue

Could you imagine selling your store for thousands? Well after 6-12 months of steady revenue, you can easily sell your dropship store for 20-30 times revenue. 

Take a look at this store being sold for $1.1 million USD! 

You could retire on that. You'll learn how to sell your store in eCom Elites.