FBA, or fulfillment by Amazon, is growly massively. If you’re looking to acquire an e-commerce store, this could be a primary way that you sell in the future. How does it work? Amazon picks, packs, and ships your order. All you have to do is sell it. FBA can help any e-commerce business scale and expand immediately, but there are key mistakes that FBA sellers make. Here are the top 10 mistakes sellers make!
Sellers don’t understand which products drive profit and which drive loss
Companies that buy seller accounts must understand which parts of the online catalog are actually making money. While it may appear that an account is doing well, a lot of Amazon accounts will improve growth on the top line account by increasing revenues quickly. However, this will cause the bottom line to suffer. If a seller doesn’t understand the basics of what generates profits and losses, then it results in quite a few errors.
Sellers don’t account for liability from uncollected/remitted tax & customs duties
Unless you’re a tax attorney yourself, it’s probably best to get a tax attorney for your business as an FBA seller. Not properly collecting and remitting sales tax in all states is creating problems and can create a large back tax bill. This is relevant as well if you’re importing products from overseas. Don’t get yourself in a mess with US Customs and accumulate tax fines.
Sellers don’t understand the Amazon Marketplace concept
One of the biggest mistakes is that sellers don’t do enough research. Amazon isn’t like a typical marketplace and it shouldn’t be treated as such. Because Amazon allows the collection of data and utilizes the Buy Box Algorithm, it’s crucial that FBA sellers understand what this means for them prior to getting on Amazon. Be smart and do your research ahead of time.
Sellers don’t pay enough attention to reviews
Reviews are the name of the game on Amazon because this is how buyers get their information. Thus, if you’re unable to obtain that feedback that lets you know whether or not your customers are happy with your product then this is a huge mistake. It’s crucial to both current and future business to know how you can best serve your consumers, and the primary mechanism for that in e-commerce and especially Amazon is via reviews.
Sellers don’t create a brand for themselves
Buyers respond to brand recognition because if buyers find something they like, then they’ll return again and again to purchase more. Thus, in a competitive marketplace like Amazon, if you’re not standing out with your branding then you won’t get sales. Create a brand quickly for yourself and you’ll be better off.
Sellers don’t take the proper financial precautions
Sellers often find that it can be a riskier move taking on an e-commerce company than they would have originally thought. Remember that like any business, you won’t be able to take money out of your business for months. All profits you make should go right back into it. Build better products, have great photos and listings, and put money into higher quality so you can raise prices. FBA isn’t a get-rich-quick scheme and you’ll be smart to remember that!
Sellers don’t take their competition seriously
Your competition will be serious when you get on the site. The difference between a sale will often be the number of previous reviews and sales that you have. If you’re starting at zero, then it’s a long way up from there. Therefore, don’t underestimate how hard it might be in the beginning when you first put up your product. You’ll need to count on those first couple of reviews to get things going so keep that in mind.
Sellers don’t sell globally
If you have the capacity, selling in other countries is one of the top ways to expand. There’s no reason to limit yourself if yourself to the United States because Amazon is now global. Often, customers in other parts of the world are even willing to pay more for the same products. Amazon offers easy returns and purchasing and incredible customer service. At this stage in the game, not many other e-commerce sites have all of those features. Once you get going, don’t sell yourself short!
Sellers don’t sell in the right season
There’s plenty of seasonal designs and products on Amazon, but if you’re looking to be successful, make sure that you’re paying attention to the season if you have one of these season products. This means that you don’t want to launch a Santa product in July. Your customers just won’t exist in the same way that will when November and December roll around. As soon as the trends emerge, you’ll find that your item gets much more popular so just wait it out and don’t waste your time. You’ll be in a much better spot if you’re smart about when you sell.
Sellers don’t research product patents
Do you want to receive a “cease & desist” letter? Didn’t think so! If you’re selling a product patented by another company and you just don’t know then you’re going to be forced to stop selling your product. No one wants that right after business starts booming. Just like with taxes and the Amazon Marketplace, all it takes is a little while to do your research to make sure that you’re on solid footing. Even if it causes a slight delay, you’ll be better off in the long run and make a lot more money than if you end up in court.
Now that you know the top mistakes that sellers make, you don’t have to! Even though the Amazon marketplace is large, sellers who know what they’re doing are the ones who stand out. If you’re starting an FBA business, you can shoot straight to the top by avoiding these errors and by growing your product in the right way.