4 Reasons Not To Start An Amazon Business

I love working on my Amazon business. I check on my inventory daily, I’m always looking for merchandise whenever I’m shopping. I go online and search for things, my friends and family are tired of hearing me talk about how great this business is.

I have convinced some friends to even try it for themselves, and unfortunately they stop shortly afterwords.

I think the reason is because I’m always talking about how great it is, how much money can be made, how many hours I put into it, and how the business has grown. I never talk about, or rarely, the difficulties involved in starting and maintaining a Amazon business.

Need Money Now!

So if you need money this coming week in order to pay rent, or that speeding ticket you just got, this is not the business for you.

Yes the money is good from this business and compared to others it comes back faster but lets take a look at the actual speed of getting your investment back.

You find something at your local Target that’s selling for $29.99 and your cost is $9.99. The fee’s Amazon takes is $9.36 so after cost and fees your making $10.64 which is 106% ROI.

Now you have that one item that has to go to Amazon, but you don’t have enough things to send in yet so it sits at your house. Let’s assume you bought it on the 1st of the month, and send it (a long with other merchandise) in on the 7th.

Now it takes days, to weeks to arrive and be available for sale on the site. Let’s assume that things start to arrive by the 13th, and some of the things sell right away. Other things though take days or even a few weeks to sell. Our specific $29.99 item takes an additional 7 days to sell, and drops in price to $25.99.

Unfortunately the item sold on the day your payment went out without finalizing, meaning it won’t be added to a payment for 2 more weeks. So you bought it on the 1st you don’t see any money for a month.

This business takes time, I don’t expect to see the money I put in for a minimum of a month. The money I receive today is from the hard work I did last month, and to get more money next month I have to work hard this one.

You Like Shopping

My wife loves shopping, she will go there when she is stressed and it helps her relax. I personally hate shopping, it stresses me out when I have to find something and spend any amount of time in a store.

Buying things for Amazon is nothing like shopping for yourself. In fact one of the most difficult parts about being at a store is not buying things for yourself.

To me sourcing (finding things to sell on Amazon) is more like treasure hunting than shopping. You look through bins of clearance things that most people don’t bother with because it’s too difficult to look through. You are constantly checking to make sure its “gold”, it’s fun but nothing like shopping.

Want To Build Up Credit Rewards

When I first starting doing this my wife thought it would be a great way to boost our credit card rewards points. This is a terrible reason to start this business, or really buy anything.

I’m not saying that we don’t get rewards points, in fact I use a few different reward programs in order to make more money on top of from the sales. But, that isn’t a reason to run this business it is a perk of running the business nothing more.

It’s Easy

Ok yes I and everyone else who talks about running this type of business makes it look and sound easy. My co-workers think all I do is sit around and drink mimosas all day (which if I was to drink anything it would be single malt scotch) and then collect money. Nothing could be further from the truth.

Yes this is easier than other jobs, in fact I truly feel it’s easier than running this site, but it does have difficulties.

Driving from store to store and finding nothing to buy is extremely discouraging. I have had many days where I feel I just can’t find anything and want to give up. I know that the good days are soon to come because they always do, but those bad days can be really scary.

Turning your house into a temporary warehouse is a huge burden, and has lead to some fights in the Philbrook house. We live in a tiny one bedroom apartment with little to no storage. I’m not exaggerating when I say the living room is sometimes more full of merchandise than anything else.

Conclusion

Running an Amazon business can be fun, exciting, and beneficial. You can make a lot of money, never really talk to anyone, and be happy. But that doesn’t mean it’s going to be easy. There are reasons that you wouldn’t want to start this business.

If you do I encourage you to look at both the pro’s and con’s, if you have any questions let me know in the comments and I’ll do my best to answer them. Or if you want you can email me directly and I’ll reply as soon as I can.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

6 thoughts on “4 Reasons Not To Start An Amazon Business”

    1. Gary, I was starting to feel bad because I had several friends start their own business and then decide to stop so I figured I would have some to show people to say “no it isn’t all good”.

    1. I hate shopping too Vickie but to me Amazon is nothing like shopping. But, it does have some difficulty so I would think carefully before signing up.

  1. I keep thinking about jumping in…I worked in used book stores and have a pretty good idea of that market (plus have plenty of seed stock) BUT I know it’s highly saturated. So far, i just keep finding other things to occupy my time.

    1. Emily I have thought about getting into books many times. I know many people who have had a lot of success selling books. I really recommend you look into that but I know many have success so likely you will too.

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