Most Common Amazon Seller Mistakes
It is very simple for Amazon sellers to get caught up in the enthusiasm of 230 million purchasers. But while Amazon, one of the biggest e-commerce sites, recruits more than 100k new sellers every year to the market, a significant percentage will leave the website within 4-6 months and will do so quite often for very preventable and avoidable reasons.
Some of these reasons are based on mistakes in how they handle their e-commerce, lack of understanding of Amazon’s rules, and not considering all aspects of conducting such a business. In this article, we will take a look at some of the most common mistakes made by sellers when selling on Amazon’s marketplace.
Registering Your Account Wrong
One of the key mistakes happens right from the start. Users typically begin with the personal Amazon seller accounts, but once the sales pick up, they end up paying higher charges for the volume of products they move and begin to exceed the private account’s limitations. With a personal seller account, you will be paying a monthly fee but will incur a $0.99 per item fee.
When sales increase, it is prudent to switch to a professional seller account on Amazon, an action that costs a third party seller nothing but is more conducive to large-volume sales. Keep in mind that If you are selling less than forty products a month, you will also be paying much more than you need to for the professional account. A $0.99 charge incurred on an individual account is only sensible until you reach the monthly fee of $39.99 that you would pay for a professional account.
With a professional seller account, you do not pay per item sales fees, as they are rolled into your monthly plan. The professional plan also gives you access to helpful inventory tools such as reports and stats, aspects that are typically useful to most medium-to-large businesses.
Lack Of Clear Return Policies
As much you would like each shopper to be completely satisfied with their product purchase, you will inevitably run across people who wish to send the product back. As a consumer, few things turn you off from a brand of products more than being stuck with a product you do not like or cannot use. When customers feel dissatisfied with the product, they should know how to return it and if they are eligible to do so.
While you may outline your return policies clearly in one place, most excited consumers are unlikely to comb your return terms thoroughly enough. It stands to reason that when we are looking to make a purchase we are thinking about having the product, not salivating at the idea of returning it. While you may fairly have your return terms listed, it is to your advantage as a seller to mention your return policy in some form as often as possible. If you put the information in front of the prospective buyer’s eyeballs, it is much easier for them to notice and process the information.
Having Non-Moving Supply
A common and significant mistake normally made by new sellers is not adequate considering how much to carry in stock for their listing. While it’s never great optics to post a ‘currently out of stock’ tag on an Amazon site and can disinterest buyers from purchasing your product, it is certainly worse to be stuck with tons of products you cannot sell and incurring a financial loss. To address this, new sellers should start small and trend their sales numbers. As the sales pick up, sellers can increase their inventory while still pulling in profits from their sales. While having the buyer wait because you are out of stock is never great, investing in inventory supply that you cannot move hurts your bottom line more.
Not Keeping Commitments To Buyers
You are only as good as your word. This is especially vital when you consider that the transaction between a seller and a buyer occurs in a non-spoken fashion entirely online. Some sellers try to motivate their sales by overpromising on what they can deliver, and underdelivering on what they promised. If you keep your promises to the buyer and commit to getting them the product they expected to purchase in the condition they wanted it in, you will grow a happy, and recurring customer base.
Messing Up Order Completion
Too many Amazon sellers fail at their venture because they are unable to mitigate many simple errors that they typically can control to some degree. Among these are mistakes such as late shipments, failing to provide Amazon with shipment tracking information, or canceling orders because your inventory ran out or your supplier didn’t provide the product in time.
As buyers themselves, most sellers understand that messing up a timely and accurate completion of the order causes frustration and annoyance for the buyers, some of whom are relying on the timely arrival of products. A great way to avoid many inventory and shipping errors is to utilize the FBA service (Fulfillment By Amazon).
The FBA process is simple, you purchase the products, and send them to Amazon who will store them in one of their warehouses. When a buyer orders your product Amazon will pack, ship, and even track the order on your behalf. If the buyer needs to return the product, Amazon will pick up handling the returns and refunds too.
Overly High Shipping Costs
Many third-party sellers often price their item in a way attractive to buyers, but those same sellers sometimes make the mistake of charging high costs for their product. According to Forbes, 80% of buyers are soured by the idea of paying high shipping costs. At times these costs can exceed 30% of the actual product’s cost which turns most buyers off and hurts sales.
To avoid this, sellers should practice pricing their items in such a way as to profit while factoring in the shipping costs. This can be done by doing some research into the most cost-effective, reliable shipping methods, then incorporating them into the charge for the product. An absence of a shipping fee or a very low one is something that quickly catches the buyers’ eye and could go a long way in helping assist the sale turnover. You can also utilize FBA which has significantly lower shipping costs and can handle the shipping for the seller.
Amazon holds some hard rules against review solicitation. They need the reviews to be from customers and for those reviews, to be honest. Asking for positive reviews is a big no-no for Amazon, and they would readily take actions they feel are necessary against a profile of a seller that violates those conditions.
Amazon is also exercising their right to stay ahead of sellers who may think themselves clever in trying to incentivize positive reviews with giveaways or prizes in exchange for the positive feedback. The idea of honest consumer reviews is that a seller uses these to build on their business and improve their selling portfolio. Negative reviews are not to be used as demoralizing insults, but rather as guides to customer pain points and weak areas in a seller’s activity that can be improved upon.
Many sellers outright forget to factor in sales taxes. When an item is sold, a part of the earnings is taken from a sales tax. While the tax rates are small on an individual basis, selling a large volume of products can run the sales tax numbers way up. This means that not accounting for these sales taxes will pull money from the sellers’ pockets, eating into their profits.
If a seller is selling in other countries, it is important to understand the tax implications there too. Not doing so could end up costing sellers so much that purchasing inventory will become prohibitive, and once that happens, what can they build their sales on?
Luckily, sellers can utilize services made available by Amazon to keep track of sales tax figures or even leverage third-party services that will collect the sales tax on your behalf, thereby avoiding costly mistakes.
One of the best ways you can enhance your business and grow your sales is by learning the tricks of the e-commerce trade on Amazon. Avoiding simple errors can save you not only a lot of money but also garner you a loyal consumer base that will keep your online sales business thriving for years to come. By identifying every potential pitfall, here you can keep track of the key things you should not be doing and begin focusing on the vital aspect to stimulate business growth.
So take the time to study up on the rules and intricacies of Amazon’s sales platform. Assuring you deliver your products in an expedient and timely manner means satisfying your customers. Happy customers will bring you continuing business and advocate for you with potential new customers.