eCom Automation can be beautiful and brutal. You can either watch the profits roll in over the next 12-24+ months, or you are fighting to get your investment back. Now, it is capital-intensive. Hence, the large upfront starting fee is like a franchise. Also, depending on your model, there are inventory costs. This opportunity is for people with surplus cash who want to create a passive income.
The benefits are (especially if this is your first business) business tax write-offs, passive income, and lines of credit that you may use in other business ventures. Furthermore, this is virtual real estate. You have staked out your land in eCommerce. This is something you can scale and/or sell.
eCommerce helped me retire at age 40. Thus, I might know what I am talking about. eCom Automation has been around for years but has exploded in the last 4 years. I have seen the awesome and awful side of this business. Pick the wrong service company, and your large investment could be lost. Choosing the right team will help you grow eCom wealth.
Why Would You Choose eCom Automation?
eCom Automation is not for everybody, and this usually caters to high-income earners, entrepreneurs, and/or investors. Also, this is for people who can cash out their paper asset portfolios to get better cash flow. Furthermore, this is a long-term investment. These people don’t have time to build their store. They do not have the time to invest in an eCom coaching program. But they have the financial capacity to invest.
This is simpler than a regular franchise model, as most franchises require you to be active in the business. Meanwhile, this only requires your money, and the management teams do the rest. Definitely, this isn’t for the faint of heart. You must understand the timelines of earning income, the total investment, and ongoing costs.
Choosing the Platform
Now, this is where it gets tricky. Do you choose to have your store on Amazon, Walmart, Etsy, or eBay? Another route is using Shopify and bucking the rules of the major platforms. There are pros and cons to both. You have to strictly follow the guidelines of places like Amazon and Walmart. One misstep, and you are suspended. The service you hire must know these guidelines.
I have seen thousands of stores suspended due to poor management teams. Also, if you do get deactivated or suspended how does the management team get you reactivated? Do they have a team in place to handle these situations?
Most Service companies use Amazon’s platform. And why not? 1 out of 3 people in the US has a Prime membership. The last statistics show that Amazon controls 53% of the e-commerce sales. In addition, they have over 350 million customers. With Amazon, you can choose to drop ship (follow their guidelines), use FBA (Fulfillment By Amazon), or FBM (Fulfillment by Merchant). Each has its drawbacks, and the service company should be an expert in these areas.
Besides the investment, most of the time, you will have a profit split. The service company makes its money off the upfront fee, and the profit is split. The profits split can range from 50/50 to 90/10 with you the bulk share. Some service companies do charge monthly and operations fees depending on your profit split. Usually, the higher your profit split, the more fees you have to pay. They can range from a monthly service fee, software, and paying per pallet for inventory.
On Your Own?
Another route for eCom automation is choosing a platform like Shopify. Now, there are other platforms like WooCommerce and Wix. Most automation services use Shopify. Going the Shopify route does have its advantages. The selling fees are lower. Also, you are not handcuffed by places like Amazon and Walmart guidelines.
The caveat of going with a management company that uses Shopify is they need to be a marketing expert. Most of the companies give you a profit split. They will handle the inventory and the marketing. Yes, the marketing. Unlike Amazon, with its 350m+ customers already buying from Amazon. You have to drive traffic to your store.
If the service company knows how to market your store you will succeed in the long run. Furthermore, you won’t get nickeled and dimed like you would on Amazon. The key is to find a service company that can show you an excellent track record of successful stores. Plus, if their marketing caught your eye, then consider them. Then they may be great at marketing your store.
What to look out for.
With every company you speak with, do your due diligence. Most of the time, you will speak with someone who will try to enroll you. Be ready to ask questions. This is just like buying a house. Do your inspection before you invest:
1. How long have they been in business?
2. Can they show you actually live stores? Can they show you a portfolio of stores with returns on investments?
3. Do the employees actually have an eCom store run by the company
4. You can check Trust Pilot, the BBB, and testimonials. Also, remember these things can be manufactured. Take this with a grain of salt.
5. You may ask for references; most people are paid to speak with you. This makes sense. They are busy. This is the reason why they chose eCom Automation.
6. Check for lawsuits. Have their lawsuits been settled? Who filed it? A lawsuit does not mean the company did something wrong. You may just disgruntled people who file lawsuits.
7. How do you get your investment back? Do they have any guarantees?
8. Read the fine print. Are there hidden fees? Are there any software fees or inventory storage fees?
9. Do a quick background check on the leadership.
10. Ask for POF Proof of Funds that they are liquid.
11. Check out their website. Are there misspellings? Is it poorly done? If they lack in their web presence, does that instill confidence?
Of course, all this can be manufactured, but you must do your investigation to gain trust. You are going to be in partnership for at least two years. Be mentally prepared for long-term gain. Do not get caught up in the quick money grab. It takes time to start and run a business.
Bottomline
eCom Automation can be a great passive investment. eCommerce helped me leave my job at age 40. It is an investment vehicle that can grow your portfolio, and it is virtual real estate.
In my opinion, I would choose Shopify Automation over Amazon. Your return on investment will be higher and less cost-intensive. Finally, you must be crystal clear on what you want. Understand what you are getting into.
