Ready to start selling on Amazon? With over 6 million sellers1, the competition is tough. Make a wrong move, and you could lose big. How do you ensure success and avoid these traps?
Amazon is full of opportunities for making money, but it’s not easy. Mistakes are common, but they can cost you dearly on Amazon. To succeed, you need to do your homework and avoid the typical seller blunders.
This guide will highlight the main mistakes new sellers often make. It offers tips to make your selling journey on Amazon smoother. We talk about understanding Amazon’s rules, improving your product pages, and managing stock. Avoiding these errors can help you prevent account issues, revenue losses, and stress.
It’s important to keep up with Amazon’s changing policies to stay out of trouble1. For instance, some sellers try to use more than one account, which is against Amazon’s rules2. Knowing and following Amazon’s terms is your best bet to avoid getting your account suspended3.
- Understand Amazon’s program policies and Seller Code of Conduct to avoid account suspensions
- Choose the right seller account type based on your business needs and sales volume
- Optimize product listings with accurate titles, images, and keywords while adhering to Amazon’s guidelines
- Offer competitive shipping rates and meet Amazon’s dispatch and delivery time requirements
- Manage inventory proactively to prevent stockouts and lost revenue
- Stay up-to-date with Amazon’s ever-changing rules and regulations
Not Reading Amazon’s Terms and Conditions
Many new Amazon sellers don’t spend enough time on the platform’s terms and conditions. They rush into selling without understanding Amazon’s rules. This can cause their accounts to be suspended. In 2021, sellers making a total of $1 billion faced account suspensions4.
It’s key to know the difference between an account suspension and termination on Amazon. A suspension means a short-term ban. A termination means you’re kicked off for good4. To stay clear of these issues, sellers need to follow Amazon’s rules. These rules include having less than 5% defects on invoices, keeping negative feedback under 1%, and ensuring less than 1% of orders are late or canceled4.
Understanding Amazon’s Program Policies
Amazon’s program policies touch on copyright, performance, and tax matters. It’s vital for sellers to really understand these to stay aligned with Amazon’s goals. Not doing so can lead to serious penalties like account bans or payment issues5.
Sellers are closely watched on metrics like product quality, shipping times, and order cancellations. Amazon’s Account Health Rating shows how well sellers are doing and the risk of being banned5. To keep their accounts in good health, sellers must closely follow Amazon’s policies.
Familiarizing Yourself with the Seller Code of Conduct
The code of conduct outlines listing rules and no-go practices. It stops sellers from using fake brand names and pulling customers away from Amazon5. Sellers must also stick to Amazon’s condition rules, such as New or Used6.
Mistakes often made by sellers include repackaging products wrongly and not having good grading systems. They also mix returned and saleable items, miss the Renewed guidelines, and skip over FBA return analysis and direct shipping checks6. For success, sellers need to fully grasp the seller code of conduct and have strong inventory management practices6.
While some rule breaches can be explained with a Plan of Action, it’s far better to prevent them. Knowing Amazon’s terms and conditions well from the start is crucial. Not following the rules can get your account suspended or worse, so following them closely is a must6.
Underestimating Costs and Fees
Many new Amazon sellers often miss the mark on how much it costs to sell on the platform. It’s not just about the money you put in at first. You need to think about the ongoing costs too. These include fees for storage, helping customers, and getting the word out about your store. If you don’t plan for these expenses, you might find yourself in a tight spot financially. This could slow down your success on Amazon.
Fees and taxes on Amazon can change a lot and are different in each place. It’s smart to keep up with the latest rules. Tapping into the wisdom of others in Amazon Seller Forums, where 9.1 million sellers gather7, can be a big help. They can share their experiences and offer advice on handling Amazon’s many fees and taxes.
A recent survey found that 80% of Amazon sellers struggle most with keeping their business accounts in order8. This shows how vital it is to really understand the financial side of your Amazon business. Luckily, Amazon helps out by handling tax collection in over 40 states. This lessens the chance of errors and headaches for sellers8.
“Inventory is a capital investment and should not be expensed before being sold.” – Expert advice for Amazon sellers8
To manage your money well, using good accounting software like QuickBooks is recommended8. Knowing what you can deduct from your taxes, like the cost of goods, shipping, and even some home office setup costs, can make a big difference. It helps you use your budget better8.
Remember, dealing with returns can eat into your Amazon profits. Reports from some sellers show that return costs are as high as a third of what they make in a month9. It’s key to know all the parts of return costs. This includes what you refund, the cost of sending things back, and the fees Amazon charges you9.
| Amazon Fee | Description |
|---|---|
| Monthly Fees | Based on the number of items sold8 |
| Referral Fees | Charged for each item sold8 |
| FBA Fees | Flat shipping fee per unit based on product size and weight9 |
You can lower the hit from return costs by improving your product photos and descriptions9. Keeping a close eye on your finances with tools like Sellerboard is crucial. It helps you find places to do better and make choices that grow your Amazon business9
.
Learning about Amazon’s costs, fees, and how to budget is key to doing well in the long run. By keeping informed, reaching out for help, and using the best tools and advice, you can overcome Amazon’s financial challenges. This will help your store grow and be more profitable over time.
Choosing the Wrong Seller Account Type
Being a new Amazon seller, picking the right seller account type is critical. There are over 9 million sellers on Amazon10. It’s key to pick an account that matches your goals and budget. The wrong choice can limit your success11.
Deciding Between Individual and Professional Selling Plans
You have to choose between an individual or professional plan at the start. Pick individual if you sell fewer than 40 items a month. You pay $0.99 per item. Or, choose professional for $39.99 a month with extra perks. Knowing Amazon’s fees is crucial for your profits12.
You might later switch to a pro plan if your business grows. It’s free to switch plans anytime. Sticking to one account helps grow your Amazon business well12.
Exploring Specialized Programs like Handmade, Small Business, Brand Registry, or Launchpad
Amazon also has special programs for different sellers. These include:
- Amazon Handmade: For handmade items by artisans
- Small Business: Great for small to medium-sized businesses
- Brand Registry: To help protect and promote your brand
- Launchpad: For startups and new product launches
Each program has unique perks, requirements, and limits. Do your homework to see which fits your business model the best.
| Program | Key Features | Requirements |
|---|---|---|
| Amazon Handmade | Showcase handcrafted goods, no listing fees | Products must be handmade, no mass production |
| Small Business | Dedicated support, promotional opportunities | Must meet Amazon’s small business criteria |
| Brand Registry | Enhanced brand protection, access to A+ Content | Registered trademark, active website, product images |
| Launchpad | Increased visibility, marketing support | Innovative products, less than $5 million in sales |
Amazon allows only one seller account per person12. Having more than one can get you banned10. Think through the Amazon account types available. Choose the one that meets your needs. This sets you up for Amazon success.
Mispricing Products and Neglecting Repricing Strategies
Add and understand the value of pricing your products sharply as a new Amazon seller. Get this wrong, and it could affect your success greatly. Warren Buffett’s advice is key here, discussing how to tackle mispricing and ignoring the need to reprice products13.
Setting costs too high can make your items hard to spot or buy. This might block your listings or lower them down the search pages. Pricing too low, on the flip side, can mean losing money, especially if rivals price lower to attract customers.
Overpricing and Underpricing Risks
Setting the wrong price can lead to big problems, whether too high or too low. For example, the market often doesn’t fully account for the future of oil and gas companies. This can make ExxonMobil’s value look up to 70% higher than it really is14. The gap between market prices and those based on a 1.5C carbon policy has grown. This gap is up to 70% now, potentially more than before the pandemic14.
In the dot-com crash, some said earnings weren’t important anymore. They pushed new ways to measure a company’s value. This started bubbles, with bankers being called “eager postmen”15. Overlooking energy transition risks can lead to undervaluing stocks. The stock market hasn’t reacted much to fears of a carbon bubble for oil and gas companies14.
Utilizing Repricing Software to Stay Competitive
Use repricing software to stay competitive on Amazon. These tools update your prices to match market trends and rival prices. This way, you can keep making money while attracting shoppers. But, make sure to set the software right. Wrong settings can drop your prices too low, hurting your profits.
BuyBoxBuddy is one option. It updates your prices in real time, within price limits you set. This software also keeps an eye on your profits. With the right repricing tools and plans, you can thrive on Amazon by staying flexible in the marketplace.
“Price is what you pay. Value is what you get.” – Warren Buffett13
Buffett highlights the need to assess risk and figure out an item’s true worth13. He looks at different factors when valuing something, like free cash flow or ROIC. By understanding value investing and carefully valuing items, you can make smart pricing choices that support your business goals and the market13.
Ignoring Customer Pain Points in Product Listings
When you sell on Amazon, remember you’re solving a problem for the customer, not just selling an item. Around 80% of seller mistakes on Amazon come from upsetting customers16. To prevent this, focus on what the buyer needs most. List your product’s features and conditions in ways that specifically address their concerns.
After finding out what the customer needs, use these ideas to create catchy phrases. In your product title or description, include phrases like “best for x & y,” or “fits models a & b.” Such descriptions help customers see exactly how your product meets their needs. This boosts your search ranking and attracts more buyers17.
Add a picture that shows how your product helps in a real scenario. Clear, high-quality images can pull in shoppers. They show your product’s benefits in action. This, in turn, helps you get more attention and make more sales.
“Customer is the King” – focusing on a customer-centric approach is essential for success on Amazon16.
Good listings include great images, detailed descriptions, and well-chosen content. These elements don’t just make your product look good. They also help in getting a higher rank on Amazon searches18. Focus on what your customers need and clearly show your product can meet those needs. This helps you stand out on Amazon.
| Strategy | Benefit |
|---|---|
| Identify customer pain points | Tailor product listings to address specific needs |
| Use searchable key phrases | Improve product discoverability and relevance |
| Include high-quality images | Demonstrate product benefits and boost sales |
| Optimize product descriptions | Enhance searchability and customer engagement |
By using these strategies that put your customers’ needs first, you’ll avoid a major pitfall. Ignoring what your customers really need in your listings can hurt. Instead, focusing on their needs and ensuring your products meet them will draw in more buyers. This can lead to good reviews and success in the long run on Amazon17.
Amazon Seller Mistakes: Improper Titles, Images, and Keywords
To succeed on Amazon, sellers must optimize their listings. This means creating great titles, images, and keywords. With so many active sellers, standing out is crucial19. Sellers need to follow Amazon’s guidelines for Amazon product listing optimization.
Adhering to Amazon’s Character Limits for Titles and Bullet Points
Failing to follow Amazon’s title rules is a big mistake. Sellers can use up to 200 characters. But many exceed this limit or forget important keywords20. Focus on brief, clear titles that spotlight your product’s best features and use the right keywords.
It’s also important to watch your bullet points’ length. Each bullet point should not go over 100 characters, with a total of 500 for all. Stick to the essentials to make your points stand out.
Avoiding Prohibited Elements like HTML, URLs, and Promotional Language
Using banned elements like HTML and URLs is a common mistake. Amazon does not allow these or promotional text in your listings19. Also, avoid using promotions in image text20.
Make sure your product images are compliant and of high quality. They should show your product clearly. Don’t use caps, symbols, or promotions in your titles or descriptions, to avoid getting suspended19.
Amazon is strict with its image policy, emphasizing not to use promotional text or URLs in product images21.
Understanding Amazon’s rules for titles, images, and keywords is essential. Always keep your listings updated with the latest guidelines. By steering clear of pitfalls and focusing on quality, you can boost your products’ success on Amazon. Regularly checking and improving your listings is key.
Charging Excessive Shipping Fees and Delivering Late
As an Amazon seller, knowing how to keep shipping prices fair is key. It’s vital to meet Amazon’s delivery deadlines too, especially for Prime members. They pay $119 yearly for quick, cheap shipping22. About 63% of Amazon U.S. buyers are Prime members, so their expectations matter22.
The Importance of Competitive Shipping Prices
High shipping costs can hurt your sales and search result standing23. A customer once got charged $7,455 for shipping three toilet paper boxes. This shows how crucial it is to set fair shipping prices22. The issue was fixed later on, but it drew a lot of attention and caused problems for the seller22.
To keep customers happy and avoid problems, consider adding shipping costs into the product prices. This could allow you to offer cheap or even free shipping. But it’s tricky – set prices too high or too low, and you could lose customers or money23.
Meeting Amazon’s Dispatch and Delivery Time Requirements
Handling a complex supply chain can make it hard to ship on time. By checking on your shipment from its start to when it arrives, you can avoid delays. This is vital for ensuring everything reaches the buyer when it should24.
To be efficient, try to meet Amazon’s quick shipping demands. This might mean working outside normal hours. Yet, it’s important for your account’s health24.
Optimizing Amazon’s shipping is crucial. Think about the costs and perks of each shipping method:
- Sea freight is generally cheaper than air, with prices up to $3,900 per container. But during certain times, like container shortages, the price could be even higher24.
- Express shipping might cost $5 to $9 for each kilogram. This is for smaller shipments, under a cubic meter or 150 kg24.
- Prices for peak season shipping can jump up, affecting your bottom line. Expect higher costs during these times24.
- You should also consider extra fees for things like shipping to multiple Amazon centers, peak season costs, and U.S. Customs checks24.
Using an inventory management system with an inventory tracker can help manage stock levels effectively. This can prevent situations where you run out of stock24.
Stick to Amazon’s rules on shipping and use tools like inventory management. This will help you deliver on time, keep your customers happy, and steer clear of trouble with Amazon23.
| Shipping Method | Cost Range | Considerations |
|---|---|---|
| Air Transport (China to US) | $4 to $8 per kilogram | Fast but costly |
| Sea Freight | Up to $3,900 per container | Slow but more affordable; prices can change |
| Express Shipping | $5 to $9 per kilogram | Best for small shipments under 1 cubic meter or 150 kg |
Remember, Amazon sells fewer than half of its products. Most come from sellers like you22. By focusing on good shipping and staying competitive, you can succeed on Amazon.
Conclusion
To soar as an Amazon seller, you need focus, research, and a big “no” to common missteps. This piece touched on some critical errors. Yet, Amazon’s world offers a bunch more missteps to sidestep25. Know Amazon’s rules well, chat with seasoned sellers, and keep track of updates. These things are key for making it long term.
Get spooked by things like breaking the rules (a worry for 37% of sellers26), setting wrong prices, not solving what customers hate, making rule-breaking listings, and over-charging for shipping. Let’s not forget, poor service turns off 65% of buyers26, and 84% check reviews first27. So, aim for top service, solid listings, and good deals to win.
When diving into Amazon sales, think about tools like ZonResearch, ZonScanner, and ZonRepricer. They make researching products, setting prices, and handling stock easier27. If you use these and steer clear of major blunders, your Amazon gig can really take off. Good luck selling on this top online market.
Source Links
- MY FBA PREP – https://myfbaprep.com/blog/amazon/common-amazon-seller-mistakes/
- Top 15 Biggest Mistakes to Avoid When Selling on Amazon – https://www.edesk.com/blog/mistakes-to-avoid-when-selling-on-amazon/
- 10 Common Mistakes For New Amazon Sellers – SellerEngine – https://sellerengine.com/10-common-mistakes-for-new-amazon-sellers/
- MY FBA PREP – https://myfbaprep.com/blog/amazon/amazon-seller-account-suspensions/
- Selling on Amazon? Learn the Crucial Terms and Conditions – ESQgo®, P.C. – https://www.esqgo.com/blog/selling-on-amazon-learn-the-crucial-terms-and-conditions-for-success/
- Master Amazon Condition Guidelines: Sell Smart, Avoid Returns – https://riverbendconsulting.com/blog/amazon-condition-guidelines/
- Major Selling Challenges Faced by Amazon Sellers – https://alpharepricer.com/blogs/major-selling-challenges-faced-by-amazon-sellers/
- 6 Amazon Accounting Problems for Sellers & Accountants | Webgility – https://www.webgility.com/blog/amazon-accounting-problems
- The actual costs of Amazon FBA returns and how to minimize these costs – Blog | sellerboard – https://blog.sellerboard.com/2022/09/19/the-actual-costs-of-amazon-fba-returns-and-how-to-minimize-these-costs/
- 18 Amazon Fba Seller Mistakes That Are Killing Your Profits – https://amzprep.com/amazon-fba-seller-mistakes/
- 18 Big Mistakes New Amazon Sellers Can’t Afford to Make | Tinuiti – https://tinuiti.com/blog/amazon/amazon-seller-common-mistakes/
- 10 Common Mistakes New Amazon Sellers Can’t Afford to Make and How to Overcome Them – https://realdigital.tw/zh/10-common-mistakes-new-amazon-sellers-cant-afford-to-make-and-how-to-overcome-them
- Buffett FAQ – https://buffettfaq.com/
- The magnitude of energy transition risk embedded in fossil fuel company valuations – https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8606343/
- Statements.PDF – https://business.columbia.edu/sites/default/files-efs/pubfiles/903/Penman_The_Quality_of_Financial_Statements.pdf
- 12 Mistakes To Avoid When Selling On Amazon – eStore Factory – https://www.estorefactory.com/blog/12-mistakes-to-avoid-when-selling-on-amazon/
- 10 Most Common Amazon Seller Mistakes To Avoid – https://www.myos.com/en-blog/most-common-amazon-seller-mistakes
- CEO’s Top 5 Pain Points of Selling on Amazon – https://pattern.com/blog/pain-points-of-selling-on-amazon
- 12 Expensive Amazon Selling Mistakes Sellers Must Avoid | Data4Amazon – https://www.data4amazon.com/blog/amazon-listing-mistakes/
- Are You Making These Common Amazon Seller Mistakes? – https://www.amzignition.com/amazon-seller-mistakes/
- 10 Common New Amazon Seller Mistakes | ZonGuru – https://www.zonguru.com/blog/10-common-new-amazon-seller-mistakes-and-how-to-overcome-them
- Woman charged $7,000 for Amazon toilet paper delivery gets refund — more than two months later – https://www.usatoday.com/story/tech/talkingtech/2018/05/23/woman-charged-7-000-toilet-paper-amazon-refunded-2-months-later/637442002/
- Essential Mistakes to Avoid for Success-Linktrans – https://en.link-trans.com/newsinfo/920203.html
- 14 Mistakes Sellers Make When Shipping to Amazon FBA – https://www.sostocked.com/shipping-to-amazon-fba/
- Avoid These 14 Expensive Mistakes Amazon Sellers Make – https://www.onlinesellersolutions.com/post/amazon-seller-mistakes
- 6 Amazon Seller Mistakes And How To Avoid Them – https://blog.heroshe.com/amazon-seller-mistakes/
- Top 6 Costly Amazon Seller Mistakes and How to Avoid Them – https://www.zonbase.com/blog/amazon-seller-mistakes-and-how-to-avoid-them/
