The Hidden Risks of Amazon-Only Product Brands
- Harvest Growth
- Jan 29
- 5 min read
Updated: Feb 24
In this episode of the Harvest Growth Podcast, Jon LaClare breaks down a hard truth many product founders don’t want to hear: building your entire business on Amazon is far riskier than it looks.
While Amazon can be an incredibly powerful sales channel—with built-in trust, massive buyer intent, and fast early revenue—speed does not equal control. Jon explains how fees quietly erode margins, why Amazon always puts its own interests first, and how even successful products can be replaced or undercut without warning.
More importantly, this episode dives into the long-term consequences of not owning your customer relationship. When you sell exclusively on Amazon, you don’t control the data, the follow-up, or the lifetime value of your buyers. Jon contrasts this with selling through your own website, where customer ownership becomes a compounding business asset rather than a one-time transaction.
This episode isn’t anti-Amazon—it’s anti-Amazon-only. Jon shares how to think strategically about Amazon as a channel, not the foundation of your business, and why the brands that win long-term are the ones that build on assets they actually control.
In today’s episode of the Harvest Growth Podcast, we’ll cover:
Why Amazon's fees quietly destroy margins over time
How Amazon competes with its own best-selling products
The real risk of not owning your customers or their data
Why selling direct increases lifetime value and defensibility
How to use Amazon as a channel without building on “rented land.”
What brands should prioritize if they want to survive long-term
You can listen to the full interview on your desktop or wherever you listen to your podcasts.
Or, click to watch the full video interview here!
If you’re launching a new product or already selling on Amazon, this episode will help you rethink your strategy before hidden risks become real problems.
To be a guest on our next podcast, contact us today!
Do you have a brand that you’d like to launch or grow? Do you want help from a partner that has successfully launched hundreds of brands that now total over $2 billion in revenue? Set up a free consultation with us today!
Transcript:
Jon LaClare [00:00:00]:
Welcome to the Harvest Growth podcast. I'm Jon LaClare, founder of Harvest Growth and author of the Perfect Launch System. Over the past 20 years, our team has helped launch and grow hundreds of consumer products, generating more than $2 billion in revenue for our clients. On this show, we break down what actually works in product marketing. Real stories, real strategies and lessons you can put to work in your business right away. Whether you're getting ready to launch or looking to scale what's already working, you're in the right place. Let's jump into today's episode.
Announcer [00:00:32]:
Are you looking for new ways to make your sales grow? You've tried other podcasts, but they don't seem to know. Harvest the growth potential of your product or service as we share stories and strategies that'll make your competitors nervous. Now, here's the host of the Harvest growth podcast, Jon LeClaire.
Jon LaClare [00:00:53]:
Today, I want to talk about something that might make some people feel uncomfortable. And that's the idea of building your entire business on Amazon. Now, let me be very clear right up front. Amazon can be an incredible sales channel. It's fast. There's built in trust, there's massive buyer intent. And for a lot of brands, Amazon is where the first real revenue shows up. But speed and control are not the same thing. And if Amazon is the only place you're selling, you're taking on more risk than you probably realize. Let's start with margins. Most sellers don't truly understand how much Amazon takes. There's the referral fee, often around 15%. And then there are fulfillment fees, storage fees, returns, and advertising. By the time everything is said and done, Amazon can easily take 30 to 40% of your revenue, sometimes more. On paper, the business looks great, but in reality, your margins are quietly disappearing. Amazon isn't a partner. It's a toll road. And the better you do, the more expensive that toll can become. Now, here's the part that really matters. Amazon always puts Amazon first. That's not a criticism. That's just how the platform is designed. Amazon sees everything. They know what sells, they know what converts, they know what products have strong margins. And when something works really well, they don't just promote it. Sometimes they compete with it. Let me give you a real example. I recently bought a pair of cowboy boots on Amazon. They were Amazon essentials. Cowboy boots, generic. I honestly never expected to see that. And even more surprising, the quality was actually very good. That's when it really hit me. Amazon is now eating into the margins of cowboy boot sellers, especially the smaller brands that don't have household name recognition. And that same thing is happening across categories. So if your product looks great today on Amazon, that doesn't mean it's safe tomorrow. Your margins can be eaten away and your product can be replaced entirely. But the biggest issue with Amazon isn't even margins. It's ownership. On Amazon, you do not own the customer. Amazon does. You don't really get the email address. You can't freely follow up. You can't build a relationship. Once you make a sale, selling to that same person again becomes much harder. Yes, you can pay for ads to reach them again, but you're renting access to a customer you already earned. Now compare that to selling on your own website. When someone buys from you directly, you own the relationship. You can build an email list, you can educate, you can upsell. You can launch new products. You can even pick up the phone or send something in the mail. That customer becomes an asset, not just a transaction. And that changes everything about the long term value of your business. Here's the honest truth. Building outside of Amazon usually takes longer. It requires more thought, more strategy, more marketing. But the long term payoff is dramatically better. Higher margins, more predictable revenue, more defensible brands. You're not building on rented land. You're building something you actually own. And just to be clear, this isn't an argument against Amazon. It's an argument against only Amazon. Amazon should be a channel, not the foundation of your business. If you already sell on Amazon, great. But start driving traffic to your own site. Start capturing emails, start thinking about customer lifetime value. If you're launching something new, design the business so customer ownership is part of the plan from day one. Because five years from now, the brands that survive and thrive won't be the ones who sold the fastest. They'll be the ones who built the assets they controlled. Want to take the next step in growing your business? Visit harvestgrowth.com to connect with our team and book a one on one conversation focused on your business. Thanks for listening. We'll see you in the next episode.
Comments