So, your eCommerce business is up and running on Amazon and you think that you have it all figured out. Guess again! There are still many things to learn when selling on Amazon and there are lots of issues that even veterans don’t figure out.
Amazon has detailed selling policies, rules, and best practices for sellers to follow when selling on its marketplace. Failure to do so will result in consequences.
Whether you are a novice seller or even a veteran seller, below are 10 common mistakes (in no particular order) sellers can’t afford to make and how to overcome them.
1. Choosing The Wrong Type Of Amazon Seller Account
You will be surprised how many sellers make the mistake of creating an Individual sellers account instead of a Professional sellers account. As a beginner, there’s nothing wrong with using an Individual account; but if you want to take your eCommerce business to the next level, Professional account is the way to go.
Be sure to do your research and learn about the differences HERE.
2. Incorporating Promotional Text, URLs, or Other Descriptions in Images
When optimizing your product listing, be sure not to incorporate any promotional text, URLs, or other descriptions in your main product image. Amazon is really strict with its image policy as that will affect customer experience on its marketplace.
Pro Tip: Try to avoid adding “Sale” or similar promotional text in your images as Amazon absolutely hates it.
Learn more about Amazon’s product image requirements HERE. You can also learn more Amazon’s product detail page rules HERE to avoid violating rules for your product titles, descriptions, bullet points, or images.
3. Poor Product Returns Management
Whether you are a new seller or a veteran, you are bound to experience a product return by an unsatisfied customer. Although damaged products returned by customers aren’t always 100% recoverable (as new condition products), you might still be able to salvage the product instead of disposing of it.
You need to track the return rate of each SKU and consider removing products that have a high return rate as that will affect your seller ratings. Perhaps you can try negotiating a return allowance with your supplier.
Be sure to check your returns so you don’t encounter any financial losses due to high return rates. Even though Amazon handles returns, you can have a clear process of handling returns efficiently as well.
4. Underutilizing Sponsored Ads Reports
Sponsored ads reports have always been underutilized by sellers. This report is a golden opportunity for you to find keywords that you never anticipated being effective.
Using these converted keywords, you can create new advertising groups that will lead to more sales. Plus using the search term report, you will find irrelevant keywords that can be added to the negative keywords section within your ad campaign.
Learn more on how to use search term report to optimize your ad campaigns in one of our actionable blog posts HERE.
5. Registering for More Than One Seller Account
Amazon only allows one seller account per user so please don’t try to create more than one account. You should play by Amazon’s rules to avoid getting suspended and suffering a huge financial loss.
Focus on one seller account and aim to grow and scale your Amazon business instead of trying to build multiple brands at a time.
6. Poor Inventory Management
This is another common mistake among sellers with tracking and managing inventory. When you only have one or two products, keeping track of inventory level is easy. However, when you have more than 10 products, things get challenging.
Perhaps you only have a few products, but you didn’t track your sales velocity so you ended up running out of stock causing you to lose traction.
Plan ahead and keep track of your inventory level especially during peak seasons such as Prime Day, Christmas, Black Friday, etc. If you are unsure when to stock up, send in more inventory to be on the safe side but not too much that you get charged for long storage fees.
Pro Tip: Use ZonGuru’s product managing tool so you never run out of inventory.
7. Calculation of Amazon Fees
Not knowing your numbers will most definitely put you and your business in the red. You need to know the exact fees Amazon charges such as FBA fees, picking & packing, shipping & handling, advertising cost, sellers account monthly fee, and monthly storage fees to be able to calculate your net profit margin.
Amazon has a revenue calculator that provides you with real-time cost comparisons between FBM (Fulfillment by Merchant) and FBA (Fulfillment by Amazon) so be sure to utilize it well. The ZonGuru Business Dashboard now also fully breaks down all FBA fees in the Net Profit breakdown section!
8. Inconsistent Branding
Another common mistake sellers make is having inconsistency when it comes to deciding your range of products to sell. For instance, if you are selling raincoats for dogs, you don’t want to start selling knitted pillow cases just because you saw an opportunity in it. Keep in mind that customers lose trust in brands with inconsistent products and characteristics.
Be sure to look at the bigger picture and have a range of products that are in line with your brand. For instance, you can focus on selling a variety of raincoats. Whether it is for pets or adults or kids, you are only selling raincoats.
9. Paying for Positive Reviews
Amazon has been cracking down hard on sellers who are paying for positive reviews by offering a discount in return. There are Facebook groups dedicated to buying products, leaving positive reviews, and then getting reimbursed through PayPal.
You might think that Amazon won’t be able to track these transactions, think again! Amazon has a huge network of people who are constantly monitoring suspicious activities on and off Amazon. I strongly advise sellers not to go down this route.
You can instead use ZonGuru’s email automation tool to follow up on customer purchases. Using an email automation tool to alert your customers that their product has been shipped, checking back to make sure they are satisfied and your overall great service will help get customers to submit a positive product review.
Most importantly, you need to ensure that your products are of high quality and meet customers’ expectations. This way, you will at least be able to mitigate some risk of getting negative reviews.
10. Not Using Fulfillment By Amazon
There are some sellers who prefer the FBM model and fulfill products themselves to avoid FBA fees. This is great if you can provide consistent, fast, and reliable shipping. If you can’t satisfy the above 3 aspects, then I highly suggest opting for the FBA model.
Amazon is constantly pushing for faster delivery so customers can get their purchases in the shortest time and of course, reorder again. Using FBA allows you to not only leave product delivery in Amazon’s good hands but also get priority over FBM products.
The Amazon marketplace is getting more competitive by the day and you want to avoid making any of the costly mistakes mentioned above. Sellers need to stay nimble by constantly innovating and improving to steer off the competition. With the right strategy, you will be able to grow and build a profitable Amazon business.
Drop us a message should you have any questions. We are happy to answer them!