[ BDSN ] ✍🏽 Fake reviews & Amazon's Low Cost Store

🫵  ARE YOU an ENTREPRENEUR or a BUSINESS OWNER?

While both entrepreneurs and business owners manage businesses, their goals, risk tolerance, and approaches differ significantly.

Entrepreneurs typically seek to innovate and disrupt industries, taking on greater financial risk for potential long-term gains.

Business owners, on the other hand, operate within more established, proven business models, focusing on profitability and sustainability, often in local or regional markets.

Key Differences:

1. Risk Appetite:

• Entrepreneurs are known for their high tolerance for risk. They often pursue business ideas that are unproven, aiming to revolutionize an industry or create something entirely new. For example, an entrepreneur might launch a startup around AI technology that is still emerging in the marketplace.

• Business owners, however, tend to be more risk-averse. They often choose business models that are proven to work, such as opening a local retail store or an online shop based on an established product category. While they still face challenges, the risks they take on are typically lower compared to entrepreneurs.

2. Motives:

• Entrepreneurs generally have larger, more ambitious goals beyond simply making money. They aim to innovate, disrupt industries, and potentially change the world. Think of a Silicon Valley tech founder who wants to create a new app that redefines how people communicate or shop online.

• Business owners, on the other hand, are more focused on generating income and achieving stability. Their goal might be to run a profitable, sustainable business in their community, like an e-commerce store specializing in niche products with a solid customer base.

3. Profitability Timelines:

• Entrepreneurs tend to take a longer-term view on profitability. They might go through years of investment and financial risk before seeing substantial returns, focusing on scaling their business rapidly or developing a disruptive product.

• Business owners generally expect to see profits sooner. Since they often use established business strategies, they aim for consistent, short-term profitability to sustain their operations.

4. Impact on Community:

• Business owners are typically more embedded in their local communities. They may sponsor local events, donate to charities, or support community causes. Their success is often tied to their reputation and connections within their community.

• Entrepreneurs, on the other hand, usually have less direct focus on their immediate community. Their ventures are often more global or national in scope, and they might outsource services from different regions, rather than relying on local talent.

5. Business Structure:

• Entrepreneurs often operate incorporated businesses to shield themselves legally from the risks of their high-growth ventures. Incorporation provides legal protection, separating the entrepreneur’s personal liabilities from the business.

• Business owners may not always incorporate, especially if they are running smaller, local operations. Many business owners run unincorporated businesses, which means their personal assets could be at risk if the business faces financial difficulties.

6. Innovation vs. Proven Models:

• Entrepreneurs thrive on innovation and tend to break the mold. They experiment with new ideas and business models, often pioneering new markets or technologies. They might be willing to take on losses in the short term to achieve disruptive success later.

• Business owners usually follow established, proven models to generate income. They prioritize stability over innovation and are less likely to take large, speculative risks that could jeopardize their livelihood.

7. Access to Capital:

• Entrepreneurs generally have more diverse funding opportunities. Venture capitalists, angel investors, and other high-risk investors are often willing to back entrepreneurs with promising ideas that could scale rapidly.

• Business owners tend to rely more on personal savings or local bank loans. They may find it more difficult to attract outside investment because their business model is more predictable and less likely to experience explosive growth.

8. Growth Ambitions:

• Entrepreneurs often aim for rapid, large-scale growth, frequently looking to expand their business nationally or even globally. They might be preparing their venture for an IPO or an acquisition by a larger company.

• Business owners are more likely to focus on local or regional expansion. Their growth ambitions are usually more modest, aimed at increasing their presence within a defined market rather than scaling their operations dramatically.

9. Stability vs. Volatility:

• Business owners often run their business with a focus on stability. They may intend to keep their business for many years, managing day-to-day operations themselves or with a small team of employees. Their role tends to remain relatively constant over time.

• Entrepreneurs, however, often anticipate major changes in their roles as their businesses scale. They might hire managers, executives, or even sell shares of the company as they expand. Entrepreneurs expect volatility as part of their journey, understanding that rapid growth comes with constant change.

10. Rule-Breaking Tendencies:

• Entrepreneurs are often described as rule-breakers. They challenge the status quo, and some research suggests that successful entrepreneurs may have engaged in risky or unconventional behavior earlier in life. Their willingness to take bold risks often drives innovation.

• Business owners, by contrast, tend to follow established rules and procedures. They are more likely to adhere to regulatory and industry standards to ensure the stability and longevity of their business.

Where Do You Fit?

• Entrepreneurs: If you are building an e-commerce business with the goal of disrupting an industry, innovating products, or scaling globally, you’re likely an entrepreneur. You’re comfortable with high risks, longer-term investments, and ambitious growth targets.

• Business Owners: If you prefer running a stable, profitable business with a proven model—such as a successful Amazon store selling in-demand products—then you’re more aligned with being a business owner. Your focus is likely on consistent growth, maintaining control, and serving a local or niche market.

If you’re an entrepreneur, you’ll likely take bigger risks, push for long-term growth, and aim to innovate in your niche. If you identify as a business owner, your focus is on steady, manageable growth, with an eye on short-term profitability and community impact.

Ultimately, while all entrepreneurs are business owners, not all business owners are entrepreneurs. It’s about the scale of your vision, your appetite for risk, and how you plan to grow your business.

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🎃 HALLOWEEN SPOOKTACULAR HIGHLIGHTS

Watch what you missed at last week’s Halloween Spooktacular Party Billion Dollar Sellers helped produce during the Amazon Unboxed Conference in Austin, TX.

🏬 DETAILS EMERGE ABOUT AMAZON’S LOW COST STORE 

Amazon is launching a new initiative called the Low-Cost Store, possibly as soon as November, aimed at competing with platforms like Temu by offering unbranded, low-priced items sourced directly from China.

This move is part of Amazon's strategy to capture the bargain-hunting segment of the market, which has been increasingly drawn to competitors like Temu and Shein due to their lower prices and willingness to trade fast delivery for cost savings.

• Structure and Operation: The Low-Cost Store will sell unbranded items directly from Amazon's fulfillment center in Dongguan, Guangdong province, China. The store will operate on an invite-only basis for sellers, focusing on lightweight and small items (under 1 lb and specific dimensions) with strict price caps per category.

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• Pricing and Fees: Products are capped at prices like $14 for shorts or $10 for necklaces, with listings above these caps being deactivated. Fulfillment fees start at $0.50 for very light items, increasing based on weight, and there are also storage fees.

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• Logistics and Returns: Orders will be shipped to U.S. customers within 9-11 days using air freight, avoiding tariffs due to the de minimis threshold. The return policy is limited, with many low-cost items not eligible for returns.

Impact on Sellers

• For Chinese Sellers: Amazon's Low-Cost Store provides a direct channel to U.S. consumers without the need for branding or complex logistics management. This could be attractive for sellers focused on volume sales of low-cost items.

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• For U.S. Sellers: The new store offers little advantage unless they manufacture in China, as it primarily benefits those who can leverage the direct-to-consumer model from China.

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• Competitive Pressure: Both Amazon and Temu are vying for dominance in the low-cost segment, with Temu offering lower fees and encouraging competitive pricing strategies. This competition could push sellers to adjust pricing models or explore multiple platforms to maximize reach.

✍🏽 FTC RULE PROHIBITING FAKE REVIEWS NOW LIVE

The Federal Trade Commission (FTC) is cracking down on fake reviews.

As of Monday, it's officially prohibited to post deceptive reviews online, and violators can now face penalties.

Here’s what you need to avoid:

• Purchasing reviews.

• Manipulating social media metrics like buying followers or inflating views.

• Falsely representing customer experiences in reviews.

• Hiding or suppressing negative feedback.

• Using AI to generate reviews.

Additionally, you can't use intimidation or threats to influence reviews.

These new regulations aim to create safer online shopping experiences for consumers and foster fairer competition in the marketplace. In the long run, they could also give you clearer insights when analyzing your competitors.

📻 AMAZON SELLER PODCAST GOLD

I trained a battalion of AI robots to listen to 54 Amazon-related podcasts every week and share some of the best nuggets with you. Here are a few:

✌🏼 Have a great weekend.

See you again Monday.

The answer to today’s STUMP BEZOS is
8% of Walmart users make over $200,000 per year