Fulfillment by Amazon programs and services can help you establish your business, grow it, and reach more customers. As an FBA seller, you’ll have an ecommerce business that sells in Amazon’s store and outsources inventory management through the FBA program. You’ll outsource shipping to Amazon and don’t have to be completely in charge of the fulfillment of the things you are selling. You can benefit a great deal from starting an Amazon FBA business. However, if you don’t do it right you can incur losses and have a difficult time sustaining the business.
We’ve compiled 10 Amazon FBA mistakes beginners make so you can avoid them and ensure success.
1. Ignoring Amazon’s Terms of Service
This is one of the most common mistakes you need to avoid because it can lead to your account getting suspended.
Launching your FBA business is one of the most exciting things to do. That is why you may feel there’s no need to read Amazon’s terms and conditions. However, that’s one mistake you don’t want to make because it can lead to many blunders including financial losses. For example, if your products have already been transported to a fulfillment center and your account gets suspended, you’ll lose access to stored inventory. You won’t be able to ship the products which means you have to pay the Amazon fulfillment facility to keep them. The worst part is that you won’t be able to sell on Amazon again. So, read and understand the terms of service and make sure you adhere to them. Know what you can do and what you cannot do on the platform. Know the products you can sell and the ones you can’t sell.
2. Picking the Wrong Niche
Picking the wrong niche and failing to research the product you want to sell can make it difficult for you to succeed.
If you just pick any niche and focus on products you think might sell without doing proper research, you’ll have a hard time getting conversions. This is because you don’t know what the market is like and whether or not there’s demand for your product. So, do proper research and make sure you understand the product or niche you want to venture into.
Answer key questions: “Is there market demand for this type of product?”, “Can I reach my sales goals by choosing this niche?”, and “What does the competition look like?” Answer these questions to ensure you don’t focus on an over-saturated niche.
Another common mistake to avoid is failing to properly launch your product. Remember that listing your products on the platform isn’t enough. You have to run campaigns and promote your products on social media to reach more people. Your campaigns should involve asking for early reviews, getting early sales, and giving away promotional materials to boost visibility and attract more leads.
3. Ignoring the Competition
Ignoring the competition is one mistake you don’t want to make because it can make it difficult for you to attract customers.
If the market is saturated and there’s too much competition, convincing prospects to buy from you will be difficult. Especially if you are only starting and don’t have a unique selling point. So, identify your top competitors during market research and find out how many leading sellers are in your space.
One way to do proper research is by focusing on the first 15 sellers in your product search results and paying attention to how many reviews they have. To succeed, focus on offering products that have fewer competitors and higher market demand.
However, if you believe you can get into a market that has lots of competition and make your mark, go ahead and do so. Just make sure you create a unique value proposition that will give you a competitive edge.
4. Not Preparing Your Product Listing Right
Another mistake to avoid is not placing your goods in the right category. So, make sure you pick the appropriate category when listing your products to avoid getting excluded from the search results and minimize competitive risk.
Your Amazon listing is as important as your sales rank and copy. So, pay careful attention to it and invest your time in the process. Write a compelling product description, optimize your keywords, highlight unique features, and state the benefits buyers will get from purchasing from you. Make sure your product description is appealing to prospects to get them to buy. Add all the important information to accelerate buying decisions and make it easy for potential buyers to understand your offer.
After properly listing your products, make sure you monitor your listing to find out how it’s performing. That means constantly watching your rankings, evaluating your keywords, and tracking competitor listings. Use the data you collect to gain insights into the performance of your products and improve your marketing strategy.
5. Not Examining Your Product
Failing to examine your product and shipping it without inspection is one of the mistakes you need to avoid.
If your customers receive damaged goods or poor-quality products, they won’t buy from you. They may even leave negative reviews that will make it difficult for potential customers to purchase your product. So, make sure you ship quality products that attract positive reviews and more sales. You can hire an inspection agency that will monitor the manufacturing process and identify defects. This will help you save money and ensure you meet customer expectations. It is key to having repeat customers and growing your business. Don’t source or sell low-quality products because it will ruin your reputation. If hiring an inspection agency is impossible, order product samples and analyze them. If there are any complaints, contact the manufacturer and have them address the issue before shipping to customers.
6. Failing to Ship Your Products on Time
Your shipping time is important. It determines who buys from you continuously and who doesn’t. It also influences the kind of reviews that customers leave on your page.
If you fail to ship your products on time, you’ll attract negative reviews and lose buyers. So, have a fast-shipping option and make sure you deliver your products on time. When you promise customers that they will receive their orders in a day, make sure that happens. If you promise them to deliver within 2 days, keep your promise. It makes it easy for them to trust you and rev about your product continuously.
7. Ignoring Additional Costs
Not paying attention to extra costs can lead to losses and make it difficult for you to build your FBA business.
Before starting your business, you have to consider additional costs such as storage costs and freight expenses. Find out how much money you need to cover various expenses and ensure success. Determine whether or not you can afford the total amount needed to launch the business, pay for storage, cover shipping, invest in your marketing processes, and so on.
Consider freight expenses and determine which option is best for you. Factor in product weight, type, and volume. If you want to use air freight services, know how much you need to raise to cover all expenses. Compare air freight services with ocean freight ones and go with the best option that suits your needs.
Not understanding your Amazon tax liabilities is another mistake you don’t want to make because it can lead to losses down the line. Learn more about various sales tax obligations and make sure you understand tax collection, remittance, and filing. Doing this helps you keep your accounts in order and ensure smooth business operations.
Inventory mismanagement is another common mistake that’s worth mentioning. One that you need to avoid if you are to succeed. Your main goal as an FBA seller is to sell more products and ensure profits. You want to make sure you optimize returns and reduce expenditures. The best way to achieve that is to do inventory management and improve it as you go. Remember that you have to pay storage fees whether or not your products are selling. So, if you don’t do stock control, you’ll incur losses. The more your products remain in Amazon warehouses, the more money you’ll pay.
8. Not Using Amazon PPC
Amazon PPC or pay-per-click helps you get your product in front of more people and ensures sales. It improves your rankings, enables you to target buyers based on search terms, helps you improve your marketing strategy, and gives you full control over ads.
Invest in Amazon PPC to increase the visibility of your listing, get more leads, increase your conversion rates, and grow your business. Do adequate research and make sure you understand the best ways to run a successful ad campaign. Know how much money you can get from investing a certain amount. Track and monitor your ads to find out what’s working and isn’t. Running your campaigns without a strategy only leads to failure. So, have an effective strategy that will help you reach your goals.
Identify and use distinctive keywords that are less competitive when listing your items. Research the keywords related to what you are selling before incorporating them into your strategy. Competing for keywords is difficult when you are starting. That is why using pay-per-click advertising is important. It boosts visibility and helps improve your rankings even when you are new to selling on the platform.
Advertising costs vary and depend on what you want to achieve, how much you are willing to pay, and how long you want to run your ads. The best ways to succeed with your PPC campaigns are to use negative keywords, structure your campaigns, make data-informed choices, and group similar products.
9. Not Managing Your Inventory System
As a seller, you have to manage your inventory and make sure you never run out of stock, always provide quality goods, and constantly improve on them. Running out of stock can lead to lower rankings and make it difficult for users to find your products. Keep track of your inventory levels and always know how many units you have available so you can re-stock on time. This is key to staying on top of search results, attracting positive reviews, and succeeding on Amazon. Don’t make the mistake of thinking tracking your inventory isn’t important since you are only starting because it is.
Even if you have smaller inventory volumes, you still need to have an effective inventory management system that will help you manage and grow your business. So, track the number of orders you get and update your inventory to avoid supply shortages.
Use sales estimation tools like Jungle Scout to predict product demand and avoid paying more money for storage and ads. Jungle Scout is an all-in-one Amazon research tool for finding, launching, and selling products on the platform and beyond it. It gives you up-to-date tools, features, and accurate data to help you make informed decisions. So, that you can improve your marketing strategy, reach more customers, and get more sales. You can use the tool to identify best-selling products, estimate sales, spy on the competition, and research high-performing keywords. Easily find profitable keywords and use them to get more people to choose your product. You can even track your product’s organic search rank for your keywords. Jungle Scout also shows you the most profitable products and ones that will enable you to grow your business. That is why most sellers use it. The best part is that you can manage your listing data from anywhere. The application has a simple interface that makes it easy for you to use all the available tools. The only drawbacks are that the tool is expensive and inventory management gets complicated as the business grows and you have too many products to manage.
10. Over-Ordering Stock
Over-ordering stock is another mistake that new sellers make. You buy extra stock without assessing market demand or understanding your target audience’s buying habits. You want to avoid running out of inventory and order more items not realizing that it can lead to too many losses. For example, if you over-stock products that no one buys or ones that have low demand, you’ll have to pay storage fees for as long as your goods remain in Amazon warehouses. So, you’ll have money going out instead of the other way around. Which makes it difficult to keep your business afloat or improve your cash flow.
You might consider liquidating or getting rid of excess stock but making profits will be challenging. If not impossible. Getting back your full investment won’t be possible. So, make sure you buy the right amount of stock to avoid waste and losses. Jungle Scout can also help you in this area. It creates an order plan you can follow to avoid overstocking and make sure you purchase adequate units. You won’t have to pay long-term storage fees for goods that no one wants to buy because you can easily identify winning products and know the number of items to purchase.
Launching a profitable ecommerce business is challenging and requires enough research, time, and patience. You have to understand the niche you’re in and your target market to succeed. Find out if there’s demand for the product you want to sell and only buy items that will help you build a successful business. Know your competitors to avoid failure. Identify your unique selling point to attract customers and get more conversions.
Before starting your business, make sure you understand Amazon’s terms and conditions to avoid violating the rules and getting your account suspended. Create an effective inventory management system to keep track of sales and avoid running out of stock. Always deliver your products to customers on time to give them the best experience and turn them into repeat buyers. If you promise certain goods will be delivered to their doorsteps in 24 hours, make sure that happens. Inspect your products before shipping to avoid selling low-quality items, getting negative reviews, and losing your customers. You can hire an agency to monitor the manufacturing process or order product samples and test them. Contact the manufacturer if there are any queries and have them rectify the mistakes before you start selling. Monitor your listing and rankings regularly to optimize your marketing strategy.
Use the right keywords, product descriptions, and images on your listing to capture attention and get more leads. Use Amazon PPC to improve your rankings, gain more control over ads, increase your conversions, and get your products in front of users who are likely to buy. Research and know the best ways to run a successful ad campaign so you can improve your marketing strategy. Know how much money you can get from investing a certain amount in your chosen ads. Track and monitor your ads to find out what’s working and what isn’t. Invest in Jungle Scout to speed up the process and get a return on investment.