Is Amazon FBA a Scam? Is Amazon e-commerce legit in 2023? Find out the complete truth!

Written By Ecommerce Beast

Every article is researched and written by e-commerce experts and then peer-reviewed by our team of editors.

Amazon FBA (Fulfillment by Amazon) is a service offered by Amazon that allows sellers to store their products in Amazon’s fulfillment centers, and have Amazon handle the shipping, delivery, and customer service for those products. This service has revolutionized e-commerce, making it easier for small businesses and entrepreneurs to reach customers around the world.

According to Marketplace Pulse, as of 2022, there are over 6 million active Amazon FBA sellers worldwide, with more than 1.5 million in the United States alone. In 2020, Amazon’s net sales reached $386 billion, with third-party sellers accounting for 54% of those sales. Had Amazon FBA been a scam, SME sellers wouldn’t have been able to achieve success at this scale and at these volumes.

Is Amazon FBA Legit in 2023?

As an experienced e-commerce journalist with 16 years of experience in entrepreneurship reporting and journalism, I can confidently say that Amazon is not a scam. Through extensive research and interviews with third-party sellers and customers, I have found ample evidence to support this claim.

To begin with, Amazon has a long-standing reputation as a legitimate and reliable e-commerce platform. Founded in 1994 by Jeff Bezos, Amazon has since grown into one of the most valuable companies in the world, with a market capitalization of over $1 trillion. Over the years, Amazon has won numerous awards and accolades for its innovative technology, customer service, and business practices, which clearly demonstrate its legitimacy as a company. Moreover, Amazon is one of the most intensely regulated companies by the US Federal & State governments. Because of its massive scale, all amazon policies and actions are closely monitored by state institutions to ensure that it does not breach any consumer or business laws. Hence, it would be almost impossible for the company to run a scam under such intense scrutiny.

In terms of customer satisfaction, Amazon consistently receives high ratings and reviews from its customers. According to a 2020 survey conducted by the American Customer Satisfaction Index (ACSI), Amazon ranked as the top e-commerce company in terms of customer satisfaction for the 12th year in a row. The survey found that Amazon scored 82 out of 100, which was significantly higher than the average score of 76 for e-commerce companies as a whole. This speaks to Amazon’s commitment to providing a positive and reliable shopping experience for its customers.

Amazon Credibility Ratings on Third-Party Review Sites:

Amazon, as one of the largest e-commerce platforms in the world, has been reviewed on many third-party review platforms, including Trustpilot, Better Business Bureau (BBB), SiteJabber, ConsumerAffairs, and Yelp. These reviews provide valuable insights into Amazon’s credibility and reputation as a seller and a marketplace. On BBB, Amazon has received an A- rating, based on its conduct, customer reviews and other factors. Although there are thousands of bad customer reviews as well, this is true for any other large business like Walmart, Best Buy, etc.

On SiteJabber, Amazon has a rating of 4.1 out of 5 stars, based on over 9,000 reviews. Customers praised Amazon for its ease of use, reliable shipping, and competitive prices. On ConsumerAffairs, Amazon has a rating of 3.1 out of 5 stars, based on over 4,000 reviews. Customers praised Amazon for its vast selection of products and reliable customer service, while some noted issues with counterfeit products or slow shipping times. So, overall, Amazon enjoys very high levels of trust amongst it customers and 3rd party-sellers, and a brand that achieves this kind of scale and trust from its customers cannot operate on a business model that is a scam, simply because it relies on it’s 3rd sellers to fulfill order worth billions of dollars per day. If it starts cheating and scamming the 3rd party sellers, it would quickly run out of suppliers and the brand trust would plummet. So scamming Amazon Sellers would be detrimental to their own business.

In my interviews with Amazon third-party sellers, I found that they appreciate the support and opportunities that the platform provides. Most sellers find Amazon’s policies and guidelines to be fair and transparent, and they feel that Amazon takes measures to protect them and their customers from fraudulent or unethical behavior.

Lastly, while there may be some individual instances of fraudulent behavior by third-party sellers on Amazon, the company has strict policies in place to prevent and address these issues. Amazon has a dedicated team that monitors seller activity and takes swift action against any sellers that violate Amazon’s policies or engage in fraudulent behavior.

In conclusion, as an ecommerce journalist with years of experience in entrepreneurship reporting and journalism, I am confident that Amazon is not a scam. The evidence and arguments presented above clearly indicate that Amazon is a legitimate and trustworthy e-commerce platform that provides a positive and reliable shopping experience for its customers.

Perception of Scam: Reasons

Is Amazon FBA Legit in 2023? Reasons why Amazon FBA might seem like a scam, even though it is not.

While we have conclusively established that Amazon FBA is not a scam, there are still credible reasons why Amazon FBA might seem like a scam to uninformed people or new sellers with insufficient experience of dealing with Amazon:

In my interviews with novice Amazon sellers, I have heard many concerns and complaints from sellers who have felt misled or confused about the platform. Here are some reasons why Amazon FBA may still be perceived as a scam by some people:

  1. Lack of Transparency: Amazon’s policies and fee structures can be complex and difficult to understand, leaving some sellers feeling like they are not getting a fair deal. Additionally, the lack of direct communication with Amazon can be frustrating for sellers who are looking for support or clarification.
  2. Unpredictable Fees: While Amazon FBA offers convenient fulfillment and shipping services, the fees associated with these services can be unpredictable and sometimes unreasonably high. This can lead some sellers to feel like they are being charged unfairly or without sufficient notice.
  3. Competitive Market: With millions of active sellers on Amazon, competition can be fierce, and some sellers may feel like they are fighting an uphill battle to get their products noticed and sold. This can lead to feelings of frustration or hopelessness, particularly for new or inexperienced sellers.
  4. Counterfeit Products: Amazon has faced criticism in the past for allowing counterfeit products to be sold on its platform, which can be harmful to both sellers and consumers. Some sellers may worry that their products will be mistaken for counterfeit or that they will be unfairly accused of selling counterfeit products.
  5. Limited Control: While Amazon FBA offers convenience and ease of use, it also means that sellers relinquish some control over their products and their customer relationships. Some sellers may feel like they are at the mercy of Amazon’s policies and algorithms without enough control over their own businesses.

Top Pitfall for New Amazon FBA Sellers & How to Avoid Them:

Here are the top 10 issues faced by Amazon FBA sellers and how to resolve them:

  1. Low Product Visibility: With millions of products available on Amazon, it can be difficult for sellers to get their products noticed. To resolve this, sellers should optimize their product listings by using relevant keywords, high-quality product images, and clear product descriptions.
  2. Product Returns: Product returns are a common issue for ecommerce businesses, and Amazon FBA sellers are no exception. To resolve this, sellers should have a clear return policy and process in place, and communicate this policy to customers. Sellers should also inspect returned items carefully and address any issues promptly.
  3. Negative Reviews: Negative reviews can have a significant impact on a seller’s reputation and sales. To resolve this, sellers should respond to negative reviews in a professional and courteous manner, and take steps to address any issues raised by the customer. Sellers can also encourage customers to leave positive reviews by providing excellent customer service and follow-up.
  4. Competition: With millions of sellers on Amazon, competition can be fierce. To resolve this, sellers should differentiate their products by offering unique features or benefits, and by providing exceptional customer service. Sellers should also monitor their competition and adjust their pricing and marketing strategies accordingly.
  5. Inventory Management: Managing inventory can be a challenge for Amazon FBA sellers, especially during peak seasons. To resolve this, sellers should use inventory management software to track their inventory levels and sales, and to ensure that they have enough inventory on hand to meet demand.
  6. Suspensions and Account Deactivations: Amazon has strict policies in place to ensure that sellers comply with their terms of service. However, sellers may still face suspensions or account deactivations due to policy violations or other issues. To resolve this, sellers should carefully review Amazon’s policies and guidelines, and ensure that they comply at all times. Sellers should also respond promptly to any notices or warnings from Amazon, and take steps to address any issues raised by Amazon.
  7. Intellectual Property Infringement: Intellectual property infringement can be a serious issue for Amazon FBA sellers. To resolve this, sellers should ensure that they have all necessary permissions and licenses to sell their products, and that their products do not infringe on any trademarks or copyrights. Sellers can also monitor their listings and take steps to report any suspected infringement to Amazon.
  8. Tax Compliance: Tax compliance can be a complex issue for Amazon FBA sellers, as they may be subject to different tax laws and regulations depending on their location and the location of their customers. To resolve this, sellers should consult with a tax professional to ensure that they are in compliance with all relevant tax laws and regulations.

In conclusion, while Amazon FBA has many benefits for sellers, there are also valid reasons why it may seem like a scam or a difficult platform to navigate. By being informed about the potential pitfalls of selling on Amazon and staying vigilant about fees, policies, and competition, sellers can make the most of this powerful e-commerce platform. Overall, Amazon has a strong reputation for reliability, customer satisfaction, and responsive customer support. While there may be some challenges and issues associated with selling on Amazon, the platform’s overall reputation for customer satisfaction and transparent policies is a strong indicator that Amazon is not a scam.