Amazon is easily the world’s largest online retailer, with no other company coming close to it. Because of this, a lot of people choose to create their online selling businesses on Amazon. It’s easy to set up an account; there are already millions of people on the platform, and Amazon can protect and advertise your business.
However, it’s not always smooth sailing on this website. This is why it is very important to be prepared before you start selling on this platform.
To be ready, you need to know about the most common 5 top problems for selling on Amazon. We wrote this article to explain exactly why these problems occur and how you can avoid them.
Setting up any kind of business, especially for selling products, can be extremely costly for the owner. Unfortunately, that can be a real problem when starting a selling account on Amazon. Why?
Well, if you have your own physical store without a middle man, the money goes directly to you, i.e., you get the profits immediately. You can then use those profits to expand your product lineup or for yourself.
With an online store on a platform like Amazon, there is a middle-man, and you don’t get your income immediately. Instead, you get paid every two weeks. So, when you are starting out, you will have to wait for two entire weeks before you see any kind of money from the products you are selling.
This can hit pretty hard, especially if you are tight on cash. What can/should you do?
Instead of spending thousands of dollars on inventory, try to be at least a bit sparing when acquiring your products. Once you get your first paycheck from the platform (after two weeks), you can increase your inventory size.
Also, don’t forget that Amazon takes a cut from every single one of your sales too. Referral fees can be anywhere between 8% and 15%. You could also go with an Individual plan, where you have to pay $0.99 to the platform for every single product you sell.
Alternatively, you can get the Professional plan, a $39.99 subscription plan with the freedom to sell any amount of units.
All those benefits you can get out of the Amazon platform are definitely worth it and can change the outcome of your business.
However, you also have to think about the fact that everyone will get those exact same benefits. Because of this, the competition on this platform is huge which can be a serious problem. If you do not invest yourself entirely to be the best seller possible, you will get pushed down by other more successful sellers.
This is another reason why you should be careful with your original cash investment, just in case you don’t get to sell any products in the first couple of weeks or even months.
To stay competitive on the platform, there are a couple of things you can do. First, you have to ensure that you offer high-quality products to your customers. This isn’t something you can achieve easily so you will have to be very careful when choosing your products. Even when you think you are buying something good, it might not be.
Next, start doing some research on your competitors and the products they sell. Why is their approach better than yours? Why do they manage to get more buyers in a week?
An essential step of this process is to ensure that the price is right. If you are offering the same quality of an item for a higher price, naturally, no one will be interested in what you have to offer. Try to do a pricing analysis on the product on the entire platform to get that sweet spot for a price.
This brings us to the next top 5 problem.
Even after going through so much trouble just to get a breakthrough on Amazon, there is another huge problem you will be met with, and that’s competitive pricing. Or what a lot of people like to call “price wars.”
Desperate sellers on this platform will do anything just to pull buyers away from you. This includes considerably slashing prices and risking their profits just to farm a couple of sales and reviews on their account.
Doing any kind of considerable cut to your product’s pricing is never recommended. Analyze successful competitors and, follow their steps for pricing, and ignore the price slashers on the platform.
The Amazon rating feature is one of the main reasons why this entire platform is so lucrative to buyers. Reviews helps people determine which seller or product is good or bad.
Unfortunately, not all people that leave reviews are always honest. Feedback on Amazon can make or break you. There are even third-party websites for customers to report you and get customer help. Read more for contact details and to get an insight on what are top reasons of customers calls.
Based on various websites, shipping and delivery are some of the main reasons why customers are left dissatisfied. Returns/replacements are also pretty common.
Ensure you always provide the best experience to your buyers otherwise you might end up with negative reviews that you will never be able to remove from your account.
As a seller, you have to obey the rules of the platform at all times. If you break just one rule, you might end up with a temporary ban, a penalty or maybe even a permanent ban.
This is why it is so important to read through Amazon’s policy to ensure you are following their rules at all times because they can be very strict at times.
It is also possible to get a shadow ban which is something you definitely do not want as a seller.
These are the top 5 problems on Amazon that you should avoid as a seller. If you do manage to avoid them, you will become successful on the platform, no doubt.