Whether you’re one of the 850 sellers responsible for 10% of Amazon’s worldwide volume, or one of the 360,000 sellers responsible for 90% of the volume, chances are you’ve probably committed some expensive Amazon mistakes in the past.
The quest to maximize Amazon profits is a never-ending endeavor. Even if you are able to find something that works exceptionally well, chances are that obstacles like new competition or shifting trends in your market will come along and disrupt the smooth sailing. In addition to finding things that work as an Amazon seller, fixing things that aren’t working is just as important to the equation of optimizing profits.
Still, there are some killer mistakes you need to avoid if you hope to be successful. Here are 12 of the most prevalent and expensive Amazon mistakes FBA sellers constantly commit that are killing their bottom line.
Top 12 Expensive Amazon Mistakes FBA Sellers Commit
1. Violating Amazon’s Terms of Service (TOS)
Violating Amazon’s Terms of Service is an easy mistake to make as the ToS are always being altered and updated. The rules on buyer-seller messaging for example have seen multiple redrafts in recent years. Some sellers get overwhelmed with these updates and stop staying on top of them.
This is a big Amazon mistake. Sellers that get caught violating ToS can face heavy penalties, including fines and account suspensions. Pleading ignorance on not knowing a rule will not be accepted as an excuse. It is every seller’s responsibility to stay up to date with Amazon’s rules and regulations. Make the time to read Amazon’s policy updates when they are sent out, and to adhere to them to avoid any future problems. Here are a few of the do’s and don’ts to keep in mind:
• Do not incentivize or use suggestive language in your review/feedback request emails
• No coupons or promotions
• Do not ask for 5 star or positive review
• Do not ask to steer them to contact you if they have issues prior to leaving a review
• Ask reviews in a neutral tone
• Remove all emojis, animated gifs/images, and images of your product
• Images of your store/brand Logo is okay and recommended to have
• Disable all Order Shipment emails
• No links outside of Amazon or other websites unless they are necessary for order completion
• Links to Amazon pages are okay
2. Unforeseen – or Worse, Inconsistent – Supplier Issues
Not all suppliers are created equally. Some sellers are so anxious to get their product to market that they select a supplier without doing their due diligence. This can lead to major issues including bad pricing, poor product quality, unreliable deliveries and more.
Here are 10 tips for great communication with Chinese suppliers. Mistakes sometimes happen and aren’t always an indication of a bad supplier. But if you ever feel like your supplier isn’t getting the job done at your level of standards, don’t hesitate to look for alternatives. The short-term headache of changing suppliers could save you a lot of time, effort, and money in the long-term.
3. Not Having an Automated Plan in Place to Generate Reviews
This might be the most expensive mistake FBA sellers are making. It’s imperative that every Amazon store has a review strategy in place. And every Amazon store that has an automated review plan in place can make the difference between stagnation and scaling.
The quickest solution to generate more product reviews is to simply click the “Request a Review” button. Clicking the “Request a Review” button is a great way for sellers to convert sales into product reviews. The system of manually pressing the button for every sale does have its flaws, however.
Different products require different amounts of time for buyers to formulate opinions on. Sending a request for a review too early or too late will result in low conversion rates. And for high-volume sellers, requesting reviews manually every day can be a hassle.
Fortunately, there are much better options available. FeedbackWhiz gives you the opportunity to fully automate the “Request a Review” button. By scheduling the amount of time after a buyer receives their product that you want to pass before the button is pressed, you can optimize the timing of requesting reviews across your entire product line. More product reviews will translate to more sales.
4. Using Incomplete or Insufficient Data to Analyze Profitability
The failure to fully assess the profitability of each and every one of your products can really send you down the expensive Amazon mistake rabbit hole.
Without a proper profit and accounting tool, it can often be very difficult to get the complete picture on how profitable a specific item is. Subtracting Amazon fees, shipping fees, and the cost of goods from the sale price of your product will give you a general idea of how much profit your gained or loss you chalked up to that product. But what happens when you factor in advertising costs? Promotional discounts? Shipping to FBA warehouses?
All of these costs must be factored in to get the complete picture of how much profit you are truly generating on your sales. Using a profits and accounting tool that makes keeping track of all of this data easy and accessible helps a lot.
5. Failure to Optimize Product Listings
Even the slightest mistake or oversight on a product listing can have devastating effects on conversion rates. If a potential buyer can’t immediately see whether or not your tablet case will fit the tablet they are using, there’s a good chance they’ll go look for another listing instead of spending too much time on the product page reading the description.
- Keep up with sales traffic trends.
- Generate product reviews.
- Improve product ranking.
- Protect and monitor your listings.
Even if there aren’t any egregious mistakes on your product listings, there may still be room for improvement including more descriptive images or more helpful keywords in the title. Take the time to regularly comb through your listings for areas to improve as converting customers who have reached your product page into buyers is vital to your success on Amazon.
6. Implementing the Wrong Metrics
Are you familiar with the AUR (average unit retail) on your products? Can you tell the difference between Amazon ACoS, TACoS, and ROAS? There are a number of different metrics that can be used to measure your profitability on Amazon. Understanding what these metrics are and their strengths and weaknesses can help you add them into the fold in your analytics process.
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7. Getting Overcharged in Fees
In most cases, there is not much that you can do to lower Amazon seller fees. These fees are static and set by Amazon. Amazon isn’t perfect, however. Sometimes it will place your product into the wrong category, potentially leading to higher referral fees.
In other cases it might charge you for oversize storage and shipping when your product is actually standard-sized. Discrepancies can be reported to Amazon’s customer service team for corrections and potential refunds. On high-volume products, the added fees from a discrepancy can add up in a hurry.
8. Not being properly reimbursed on returned, damaged, or lost items
Amazon is pretty good about reimbursing you for products that are lost or damaged in its FBA warehouses. But the process is far from perfect. It’s common to see customers who were credited with an early return fail to return the product within 30 days, products to be lost or damaged in the warehouse or during the unpacking process, and even items returned by the customer failing to return to your inventory.
Consider enlisting the help of a virtual assistant, partner, or consultant to audit your account on a regular basis so that you can stay on top of mistakes like this without having to put in all of the hours of research and cross-checking records yourself.
9. Inventory Mismanagement
Inventory management can be tricky, especially when dealing with changes in seasons, current trends, and sales. Mistakes are inevitable, but minimizing these mistakes is key to your business profitability. Stocking too much of a product will result in unwanted storage fees and a potential hit to your Inventory Performance Index (IPI) score. Stocking too little of a product will result in gaps in availability and lost sales.
These are both costly mistakes. If you have the capacity to do so, consider having two fulfillment methods on certain products, one Fulfilled by Amazon and one Fulfilled by Merchant. This way if you run out of inventory on a product in the FBA warehouse, you can still stay in stock on the fulfilled by merchant side until your FBA inventory is replenished.
And don’t get suffocated by Amazon FBA storage fees.
10. Obsessing Over Having the Lowest Price
There are pros and cons to automatic pricing tools. Depending on the parameters that you set, having an automatic repricing tool can help you keep your pricing dynamic without the need to constantly update prices yourself. But whether you price manually or automatically, it is important not to obsess over having the lowest price in your category.
Yes, price is important and is a major factor in the customer’s choice on what product to buy. There are plenty of other factors taken into consideration as well. Product reviews, brand, styles, materials, heck even advertising and driving external traffic to your product page can help.
Some competitors will have stock that quickly sells out at their too-low pricing. Others may be able to afford lower prices because they use inferior materials. It is wise to pay attention to your competition and price accordingly, but resist the urge to sink your profits by racing to the bottom.
11. Not Promoting Your Products
One major mistake that beginners (and even some veterans) make on Amazon is not investing enough into advertising. Some sellers simply fear spending money or cutting into their profit margins without realizing that more customers reaching their products through PPC and sponsored product ads will generate more profit in the long run.
For example, would you rather sell five units a day with a $10 profit per unit for a total of $50 in profit, or 20 units a day with a $5 profit per unit for a total of $100 in profit? As long as you keep track of the data and optimize your advertising campaigns, you should find in the majority of cases that advertising is the right move for your brand and products.
12. Failure to Use Available Amazon Seller Tools and Software
Of course, managing inventory, repairing feedback, generating product reviews, and assessing the profitability of your products can be challenging and extremely time consuming. Thankfully there are tools to help
FeedbackWhiz, lets you see all your feedback – good or bad – and generate automatic emails to help you stay in touch with your buyers. This streamlines all the work involved in managing both reviews and seller feedback.
In addition, FeedbackWhiz gives you access to a large amount of data from which you can draw insights into your business. For example, you can see all reviews for individual product ASINs and, if you spot a trend emerging, use that data to improve your offering to customers.
Have you committed any expensive Amazon mistakes?
Every seller has a story. And sometimes those stories consist of expensive Amazon mistakes. Do you have a story? Let us know in the comments below!
*Editor’s Note: This article on expensive amazon mistakes was originally published on July 16, 2020. It was updated on September 14, 2021.
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