What Is Thrasio? And Why Amazon FBA Is So Difficult To Sell On In 2020 | My First Million Podcast

About this video

Sam and Shaan discuss listener feedback on their previous episode about Thrasio, a company acquiring Amazon FBA businesses. Their guest Amazon seller provides insights into the realities of the FBA business model—including typical profit margins, operational challenges, and the significant risks of account suspension or algorithm changes that can devastate businesses overnight.

Key takeaways

• Most Amazon FBA sellers in the $3-5M revenue range operate lean with small US teams and larger teams in low-cost countries, netting 10-20% margins or $500k-$1M annually, but face increasing competition from sophisticated players making entry harder than in 2013-2014
• Amazon sellers face asymmetric risk: high probability of modest consistent returns but low probability of catastrophic loss (account suspension, algorithm changes, or fee increases) that can eliminate income streams, similar to ‘picking up pennies in front of a steamroller’ as Nassim Taleb describes
• Amazon has dramatically cut affiliate commission rates and seller fee structures in recent years; Sam notes his personal affiliate revenue was cut roughly in half across categories, with massive impact on larger publishers like Wirecutter and BuzzFeed

Episode details: published May 11, 2020 · 3.1K views · 6:06 long. Summary written by Self Growth Videos from the episode itself. The business ideas, figures and results discussed are the hosts’ and guests’ own claims, shared as brainstorming and entertainment — not verified facts and not investment advice.

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