Inside the massive online forums for people who sell stuff on Amazon
Nate McCallister didn’t set out to create one of the largest Facebook groups dedicated to Amazon sellers. In fact, at the time of its launching, the group was focused entirely on an extremely niche topic within the Amazon selling community and was only being offered to his paying clients.
A few years ago, McCallister had become inspired while listening to a podcast about people who visit grocery stores and local retailers to scout out discounted products and then resell them on Amazon. In 2014, he started selling books and other assorted odd items on the Amazon marketplace and began to see some success. It was while getting set up on Amazon that he accidentally stumbled into a side business. “When you start selling on Amazon, you can only start selling a certain number of brands,” he told me. “They have a process, called ungating, where you have to get approved to sell different brands and categories. It was tedious, people would complain about how hard it was. So I basically made a system out of it, and turned it into a business.”
Essentially, this new business aimed to help new Amazon sellers get through the ungating phase more quickly so they’d reach the point where they could sell any brand or product they wanted to. One of the perks of becoming a client of McCallister’s was that you got access to a private Facebook group he set up so his customers could interact with each other and share insights. But soon after he launched the group, he saw an influx of new members asking to join. “I was starting to notice that I was getting more people than I actually had clients, and people were using the group to ask questions related to Amazon in general.” In other words, his customers were expanding into topics beyond the ungating process.
Realizing he had a burgeoning community on his hands, McCallister changed the focus of his group to Amazon selling and began letting in anyone who requested access. Within months, he had thousands of members, and today the group, called FBA Today, boasts over 20,000 Facebook members, many of whom are extremely active within the forum. On any given day, users will post dozens of questions and observations, and these posts amass hundreds of answers and comments.
And what’s more, FBA Today is just one of dozens of Facebook groups that focus on selling products on Amazon. Some of these groups have attracted upwards of 40,000 members. An Amazon seller community on Reddit sports 23,000 subscribers, and there are several YouTubers who have each generated millions of views and tens of thousands of subscribers for their how-to videos addressing the Amazon selling audience. This community is both massive and extremely vocal.
To understand how this community grew to the size that it is, it helps to know a little bit about selling on Amazon. In 2006, the company launched a program called Fulfilment By Amazon (FBA for short). Essentially, it allowed third party sellers — which ranged from solo entrepreneurs to small businesses — to not only list products on Amazon, but to also store and ship those products. These sellers would only have to ensure that the products get to the warehouses, and Amazon, for a fee, would sort, store, and ship the items to its customers. It would even handle customer service. If you’re a consistent Amazon user, chances are you’ve purchased something from one of these third-party sellers without even realizing it.
Prior to the launch of FBA, there had been a vibrant subculture of internet entrepreneurs who had been buying and upselling consumer goods through eBay, but for the most part they had to handle all the storage and shipping themselves, often in their own homes. FBA opened the doors to scalability, and within a few years after its debut there was a not-insignificant number of entrepreneurs who had learned to optimize for the platform and were making really good money. Some practiced what’s called retail arbitrage, which involves combing through local retail outlets and finding discounted products that are selling at a much higher price point on Amazon.
Other FBA sellers white-labeled commodity products and then leveraged their marketing skills to get them displayed prominently in Amazon search. They’ll take a common item like, say, fish oil pills or staplers, find someone to manufacture them (often through a company in China, which they’ll find and contact through Alibaba), and they’ll work to optimize their Amazon product pages so that consumers are more likely to buy their products over all the near-identical competitors.
The most ambitious kind of FBA seller is one who designs and brands a new product from scratch. For obvious reasons, this is the hardest feat to pull off, but also packs the most potential reward, since these kinds of sellers won’t face a daily barrage of new entrants that are simply selling an identical product at a lower price.
As the FBA seller community grew, there emerged a significant need for information exchange among sellers. There’s a huge learning curve for those entering the market. You not only need to identify product categories in which you can compete, but you then have to navigate the world of overseas manufacturers, shipping fees, and international tariffs. You need to price your products in such a way that ensures profitability while accounting for Amazon’s cut, taxes, and storage fees (oh, and you better not order too much of a product, lest Amazon’s long term shipping fees kick in). You must do all this while adhering to Amazon’s long list of arcane regulations, the violation of which will quickly get you booted off the platform.
You can probably see why these online communities sprouted up. Scroll through the posts of the FBA Today Facebook group, and you’ll see questions and observations across a wide range of topics. There are often multiple posts a day asking for help in parsing Amazon’s fee structure:
Others post customer service related questions:
And many more are simply shoot-the-shit type posts where users make mundane observations, ask open-ended questions, and even crack a few jokes:
“Some of the most popular and controversial posts are where people post their sales numbers,” said McCallister. “Some people make fun of them. Some people say, ‘that’s awesome, good job!’ Other people accuse them of posting fake numbers.”
As the community has grown and matured, it’s gotten better at both policing itself and leveraging the vast archives of posts that have piled up over the years. “A lot of people will use the ‘search group’ feature because they’ve been trained over time that if they ask something that’s asked all the time, people will get on them,” explained McCallister. “So a lot of people will actually search the archives if there’s a topic they’re interested in, and you can tell that they’re doing that because I’ll suddenly get a comment or question on a post that I uploaded all the way back in 2015.”
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Not all the forums dedicated to FBA are easy to access. It’s not uncommon for members to splinter off into their own private groups. Practitioners of retail arbitrage will share BOLOs — short for “be on the lookout” — which are items they stumble across at retail outlets that are severely discounted. But they won’t post the BOLOs to the large open groups because it’ll flood the Amazon marketplace with cheap goods, driving down the price for everyone. Instead, they’ll pass the BOLO tips around among a much smaller, self-selected group. “If I were to post a BOLO in my group, I would be slaughtered, because it hurts sellers,” said McCallister.
For some of the FBA groups, you actually have to pay to get into them. That’s the case for the Facebook group run by Will Mitchell; all 3,200 members of his group have paid the $1,500 to take his E-Commerce Empire Training Program, a comprehensive online course that teaches customers how to sell on platforms like Amazon (and for those doing the math at home, yes, those 3,200 members represent $4.8 million in revenue). Mitchell told me that he first got into e-commerce 15 years ago. “When I was like 12 or 13 years old, I discovered you could buy really anything from China and resell it on eBay or in person, and there was nobody doing it back then,” he said. Over the years, his business has matured, and he now develops his own private label brands and product lines.
As Mitchell grew his business, he started blogging about the insights he learned along the way. “It blew up to where I was getting several hundred emails a day just asking questions about the business model,” he said. “So at a certain point I was responding to so many emails it was becoming almost a full time job. And I was just like, ‘I need to figure out how to get this knowledge to my entire reader base, in one swell swoop.’” He launched a series of paid coaching webinars to meet this demand, and eventually this evolved into a standalone course that a customer can enroll in and take at their own pace. The Facebook group is an added benefit to taking the course.
I asked Mitchell why users are attracted to his Facebook group when there are much larger ones they can engage with. He told me that the $1,500 entry fee acts as an incredibly effective filtering mechanism that drastically improves the quality of discussion. “In the free groups, you get a lot of people who can’t even ask coherent questions,” he said. “We just saw a lot of problems with the free groups just because the high quality sellers didn’t want to be in those groups. The high quality sellers want to be in private pay groups.”
In fact, Mitchell actually incentivizes the biggest sellers to spend time in his group by handing out monthly rewards to those who hit six figures in monthly income. “We give a $2,500 prize package every month to one of those winners. So that’s basically one of the ways we’re incentivizing big sellers to be in that group, just to give them the extra push to get them to help out. It’s very expensive for us to answer high level questions, and much cheaper for us to just incentivize other big sellers to do it.”
The high cost of admission also weeds out the scammers that sometimes prey on the free groups. Lured by get-rich-quick claims, new FBA sellers are extremely vulnerable to black hat practitioners who can quickly defraud a wannabe entrepreneur out of thousands of dollars. “Most Facebook group owners have no idea how influential their group is,” said Mitchell. “It’s a hotbed of scams and con activity. Which is why people love our group. We police the hell out of it.”
McCallister told me he’s increasingly frustrated by the growing number of bad actors on Facebook. Recently, they’ve been taking advantage of Facebook’s policy of allowing anyone to add a friend to a group without that person explicitly opting in to said group. “So you’ll see people who have 5,000 friends all the time, and then they launch Facebook groups that within 20 days have 20,000+ members,” he said. “They go to other groups, add those people as friends, add them to a group, and then unfriend them.” Often, because a Facebook user has already joined several FBA-related groups, they’re not able to differentiate between the established groups and the bad actors.
Why go through all this trouble? Because, as it turns out, the admins of these large groups wield tremendous power and influence. “If you create a place where people are continually coming back and getting value, they’re way more likely to trust and buy from you going forward,” said McCallister. “I’ve made a good amount of money on affiliate products and my own software that I’ve created that I sell to my own group.” Mitchell told me that his Facebook group represents his most devoted fans. “This Facebook group of 4,000 people, this is the core group that really loves me,” he said. “This is the group where my marketing has worked so well that they see me as a Tony Robbins or a Tim Ferris. I can jump in at any time and say, ‘Hey guys, I really need your help pumping up this YouTube video today,’ and they’ll go in and give me all the promotion I need, 4,000 people upvoting it.”
Of course, Facebook isn’t the only place where the action is. Search for “FBA” on YouTube and you’ll find dozens of accounts with names like Side Hustle Pros and Project Life Mastery that have each attracted tens of thousands of subscribers.
An FBA seller named Cody Hawk joined YouTube in early 2014 and began uploading videos of himself speaking to the camera about his selling tips. “Back then the community was a lot different,” he told me. “It was virtually non-existent on YouTube. I had read every blog, article, and forum that I could get my hands on.” Hawk published new videos on a fairly frequent basis on topics ranging from retail arbitrage (including a video of him actually visiting stores with his family) to how to shrink wrap products. Most videos feature him wearing a baseball cap and a signature style of very energetic, fast speaking.
Hawk’s motivation for producing these videos, he said, was that he hoped they would allow him to connect and network with a few other entrepreneurs like himself. “Frankly, I guess you could say my real life friends, they didn’t know what I did,” he said. “A lot of them had traditional jobs. The average person is just simply not an entrepreneur. My local community of entrepreneurs was kind of small, and so I thought maybe if I start putting out videos, I can connect with some people. Maybe a couple hundred people might watch some day.” The channel ended up outperforming his wildest expectations; by the end of his first year, he had 10,000 subscribers. Today, he has over 60,000, and he said he’s growing by about 4,000 a month.
I asked Hawk why he thinks his videos appeal to so many people. He said that, in addition to the informational value they attain from his content, they also enjoy watching him as a person succeed. Hawk mentioned a few times in our interview that he’s a high school dropout from a lower middle class family, and in him his viewers see a kind of everyman. “Even though I’ve done fairly well financially, I don’t come on here and flaunt fancy cars and big houses like a lot of my competitors’ channels,” he said. “I just show you what hard work actually looks like. And I feel like a lot of people relate with me on that level, where if you know what, if this guy can do it, then maybe I can. If I’m willing to work hard and use some of this knowledge then maybe I can be successful like him.”
This was a mentality that I found in most of the FBA communities I studied for this article. Nobody I encountered in these forums was trying to build the next Apple or Netflix. For the most part, they’re entrepreneurs who are, at most, iterating on already-existing products; they know that if they’re going to succeed in e-commerce, it’ll be through hard work and old-fashioned hustle, and these groups are a way for them to motivate each other through the dark times and, hopefully, be cheered on when they finally emerge on the other side.
And that, I think, is why so many viewers populate these forums, answer questions, leave words of encouragement, and watch videos put out by people like Hawk. “I’m not the Lebron James of business,” he said. “I’m not going to be the next Bill Gates. But I’m proof that the average person who wants to work really, really hard can potentially do something for their financial future, for their business, and, most importantly, for their lifestyle.”
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Simon Owens is a tech and media journalist living in Washington, DC. Follow him on Twitter, Facebook, or LinkedIn. Email him at simonowens@gmail.com. For a full bio, go here.
