Last updated on January 5th, 2023 at 08:44 am
Amazon made it easy for regular people to sell products online. And many now use the platform to generate six-figure incomes for themselves.
Unfortunately, almost everyone makes mistakes along the way. And these can cost them dearly, preventing them from being successful long-term.
That’s where this post can help. We take a look at all of the mistakes new Amazon sellers seem to make and how you can avoid them.
Spending Money On Paid Advertising Without A Real Strategy
Amazon now lets sellers advertise from within the platform, which is a great idea. However, it also comes with risks. Spending money on ads doesn’t always make sense. And if you get it wrong, you could fall into negative returns – not what you want.
Therefore, you’ll need a strategy before you start spending money. Don’t buy any PPC until you know your goals and what you want to achieve.
Also, make sure you understand how Amazon ads work. Don’t throw money at them expecting immediate results. It doesn’t work like that.
Failing To Manage Inventory
Next, many Amazon sellers get into trouble when they fail to manage their inventory correctly. Brands fall short of the platform’s standards when customers discover their products aren’t available.
Unfortunately, Amazon doesn’t just give sellers a slap on the wrist. Failing to have products in stock damages SEO and makes it less likely you’ll appear on page one of Amazon results.
Therefore, get into the habit of tracking your inventory levels regularly. Make sure you have real-time metrics showing you demand forecasts and when you need to place your next order. Avoid the temptation to wing it or play it by ear. That rarely works and it could land you in trouble.
Once you improve stock levels and know what you have in reserve, you can begin to relax a little and let the algorithm take over. Regularly supplying people with your goods and services is the best way to protect yourself from brand damage.
Failing To Manage Your Tax Liabilities
Tax liabilities vary from country to country. However, most jurisdictions have both sales and corporate tax rules you need to obey. Failing to do so could result in trouble with Amazon and the authorities.
Amazon sellers typically pay sales taxes based on their location. Therefore, you can sell all over the world, but you pay the sales tax rate that applies to your local area.
You’ll also want to familiarize yourself with various tax concepts. This way, you know what they mean when authorities contact you. Filing, remittance, and collection should all be terms you understand. If you don’t know what they mean, work with a bookkeeper who does.
Reaching Out For Customer Reviews
Most brands reach out to their customers for feedback and reviews. However, you shouldn’t do this on Amazon. That’s because it goes against the company’s policies. The platform believes companies should not influence reviews in any way, which is why it does not solicit them.
You may have noticed this when using Amazon yourself. The platform is extremely cautious around the issue of feedback. It does not provide customers with any giveaways or incentives in return for them leaving a review.
Botching A Product Launch
Brands assume that launching a product on Amazon is different from any other platform. However, that’s not true. They are more similar than you might think.
Launching products on Amazon requires going through all the steps yourself. It’s not enough to post the product on the platform and then expect it to do the rest for you. That won’t work.
Launching a product the right way includes using the Amazon Sponsored Products campaign, promoting the new item on social media, and looking for ways to increase organic Amazon sales, such as implementing the right keywords. This way, you should improve your visibility, generate more reviews, and get a larger number of people interested in your product.
You can get away with fulfilling orders a couple of days after users place them on eBay and Etsy. However, the same is not true of Amazon. The American conglomerate prides itself on its rapid same-day or next-day deliveries.
Therefore, third-party sellers need to up their game. You want to deliver orders within 1 to 2 working days. This way, you’ll get ahead of slower competitors on the site.
Only promise what you can achieve, though. Don’t tell customers you can deliver their orders within a few hours if it will take you several days in reality.
New sellers struggling with fulfillment should choose Fulfilled by Amazon. This way, you can benefit from the platform’s infrastructure while you set up your own fulfillment centers.
Expensive Shipping Options
Amazon gives sellers flexibility on shipping prices. However, you’ll want to make sure you reign these in as much as possible. Customers resent having to pay shipping fees, particularly if they are Amazon Prime members.
The only way you can get away with high shipping prices is if you sell a unique or rare product. However, the likelihood of having no rivals is small.
To avoid expensive shipping, calculate your margins ahead of time. Find out what you need to sell items for to turn a profit.
Then, ask various delivery partners for shipping quotes and rates. You will find quite a wide spread, letting you choose the best price for your items. You may be surprised to discover how profitable you can be.
Poor Product Listings
Newbie Amazon sellers also tend to gloss over their sales copy, believing it is unimportant. That couldn’t be further from the truth. Buyers often want to find out specific pieces of information about a product before committing themselves to a purchase.
The trick here is to answer all your customers’ questions in your descriptions. Make sure you provide them with all the information they need to make an informed purchase decision. Always list the full specifications of your products, even if they seem boring. Also, answer questions your customers may ask in detail. Give them all the information they need to feel confident hitting the buy button.
Aside from the copy, you also need to consider the quality of your images. Avoid anything that looks pixelated, cut-and-pasted, or low-effort. Double-check the quality of your images by accessing your Amazon pages independently.
Delivering Dreadful Customer Service
Amazon won’t deal with all your customer service needs for you. As the vendor, you’ll have to provide your clients with direct support when they ask for it.
Remember, 60 percent of customers prefer good customer support to low prices. Hence, it makes sense to invest in support when you can.
You can also sell through Fulfilled by Amazon if customer service is your weak point. This service takes care of all complaints, returns, and questions for you. Just remember that Amazon might not know as much about your products as you do,
Selling Products Sold By Everyone Else
Lastly, many newbies think they can start making money on Amazon immediately by selling anything. However, that’s not the case. Ideally, you want to pick a niche nobody else is in. This way, you can get a temporary monopoly on items you sell, at least within the Amazon ecosystem.
Going up against established players is a bad idea. They have bigger budgets, more connections, and better marketing. It’s just hard to keep pace.
In summary, you can’t guarantee success on Amazon. However, you can improve the likelihood of a positive outcome for your business dramatically with the right approach. Avoid these mistakes and you will go far.