Amazon is by far the most popular eCommerce platform out there, so it should come as no surprise that both new business owners and casual sellers are flocking to the site in droves. The process of getting a new Amazon seller page or storefront off the ground can be tough for those who are new to the game. Learn about a few of the most common, and most expensive, Amazon seller mistakes that new sellers make -- then avoid them from the get-go.
7 Amazon Seller Mistakes to Avoid
1. Breaking the Rules
Sellers need to take Amazon’s Terms of Service seriously. There are certain violations that can get accounts suspended or even terminated, which can wind up costing sellers a small fortune, especially if they’ve already begun to ship inventory to the fulfillment center.
When an Amazon account gets shut down following a lack of compliance, the seller loses access to all the inventory stored in Amazon’s warehouses along with the right to sell on the platform. This makes failure to follow the rules, either willfully or accidentally, one of the most potentially expensive Amazon seller mistakes.
2. Ignoring the Competition
Checking out the competition should form an integral part of any Amazon seller’s product research process. Even if you have a great product, product categories with hundreds or thousands of options may be too crowded to make a big impact.
The cost of attempting to enter a highly competitive market unprepared can add up. At a minimum, sellers who can’t compete will lose the money they invested in inventory purchases, which can amount to thousands of dollars. Or, the attempt to garner more traffic using expensive ads could be money down the drain as well.
3. Failure to Vet Suppliers
Most sellers on Amazon don’t produce their own goods. Instead they set up seller accounts, then order products from suppliers at wholesale prices. Not all global suppliers are trustworthy, though, so it’s important to find one that has a good reputation and a history of accurately fulfilling orders in a timely manner.
Choosing the wrong supplier can cost Amazon sellers money. Sellers may get overcharged hundreds of dollars if they aren’t careful. In a worst-case scenario, a supplier might even pocket the deposit and fail to fulfill the order, which can leave sellers out thousands of dollars.
4. Copycat Products
Sellers who produce unique goods often assume that it will be lucrative to take other brands’ most popular product ideas, tweak them a little, and start selling a copycat product. This is a mistake because today’s shoppers are too smart to fall for that. If they see two almost identical products for sale on Amazon for reasonably similar prices, they’ll almost always go for the one that has the most positive reviews. That’s almost never the copycat product.
Instead of just changing the colors or a topical design feature, find a useful product that hasn’t quite made the grade and change it based on customers’ complaints. This requires some research, but it’s worth the time and effort. Competition is what drives today’s markets and only a product that offers proven solutions to a competitor’s problems will be competitive.
5. Over-Ordering Stock
Some sellers feel more comfortable ordering extra stock so they won’t run out of inventory if demand for their products increases. However, Amazon charges money to sellers to store their items, so going overboard can cost a lot of money.
Having confidence in a new product is great, but it should be backed by adequate research and verifiable data. Instead of over-ordering the first time, place a more reasonable order and wait to see how the product performs. This will make it easier to ensure adequate inventory without going overboard.
Stocking extra goods can be expensive, especially in the long-term. Not only are business owners spending money on extra inventory that could have been better spent elsewhere, but Amazon changes its storage fees after products have been in their fulfillment centers for more than a year. At that point, the monthly storage fee increases to $6.90/cu ft of product.
6. Sloppy Listings
Think of Amazon product listings as primary sales copy. The listings need to be professional, thorough, accurate, and optimized. Shoddy listings that feature low-resolution images, fail to list features or benefits, or don’t make a good pitch to the customer, just won’t sell products. Sellers who don’t have enough time or online marketing experience to come up with high-quality product descriptions, images, and sales pitches should consider enlisting some outside help.
7. Poor Customer Service
Running a successful business on Amazon is like running any retail business. It requires excellent customer service. Those who sell products through Amazon FBA don’t have to worry as much about this aspect of running their business, but anyone who fulfills orders directly should be prepared to tackle customer complaints quickly and efficiently.
Poor customer service will impact the business in a few ways. First, companies will lose valuable repeat business. Second, dissatisfied customers will start leaving poor reviews. Finally, the cumulative effect will be fewer sales and a poor reputation as a seller, which can wind up costing business owners their potential fortune.
The Bottom Line
Selling on Amazon takes a good deal of time and effort. The best way to succeed is to learn from other sellers’ successes and failures, do plenty of research into competing products and stores, provide excellent customer service, and enlist outside help as needed.
Nothing spells disaster quicker than a lack of effort on the part of sellers. Start out with a well-conceived and optimized product listing, plenty of data-supported insights, and a plan to deal with potential problems as they come up. The time, effort, and money business owners put into setting everything up right the first time will pay off in the long run as their Amazon business starts to grow and thrive.
Our team of Amazon business consultants has extensive experience helping business avoid these costly mistakes. Let’s chat about getting your business on a path to success and growth. Schedule your free consultation to get started.