Gone are the days of the brick-and-mortar shops. Most of us shop online now, even for basic things. The device you are reading this article through, there is a high chance it was bought online.
In this booming e-commerce market, sellers on platforms like Amazon often find themselves at a crossroads, deciding whether their business will soar to the first page of search results or become lost among the multitude of generic, low-traffic listings on page two.
Today we will discuss the pitfalls that can derail an Amazon seller’s journey to the top of the search results. Here are some mistakes every seller should avoid while selling through Amazon.
#1: Choosing an over-saturated niche
While chalking out the business, new Amazon sellers tend to select a very saturated niche that they think will be easy for them to navigate. Again and again, they fail to see the high competition. This happens mainly because of well-established brands and/or manufacturers in that field. This is why market research is fundamental before starting. Being a novice seller it is very difficult to confront the competitors who are many years and resources ahead of you.
In such niches, it is also hard to distinguish your product by a particular USP. This sometimes leads to unevenness of traffic to your listings as customers will not likely remember your specific product.
#2: Not optimizing the listings
Your product listing page conveys everything about your product to the buyer. It is like a bridge between you and Amazon’s massive customer base. A conversion happens only after the customers’ queries are effectively addressed by the information you provide there. And if your page fails to do so, a potential buyer leaves with an empty cart.
Tell-tale signs of a bad listing can be low-resolution images, incomplete product description and bullet points, lack of keyword optimization, and above all, being unclear about how exactly the customer will benefit from the product. Contrarily, a listing with enticing clear images, great description, and proper keyword optimization can result in a listing with 4+ stars and plenty of rave reviews.
#3: Not updating your seller central account
Most new sellers start their business as a sole proprietorship and set up their Seller Central accounts accordingly. But as the business scales up, the business structure updates too. Suppose your business upgrades from Sole Proprietorship to a Limited Liability (LLC) structure, you must update your Seller Central account with relevant details as well.
Your business’s transitions mark significant changes in the legal and financial frameworks. Failing to update your selling account with those details can lead to harsh consequences from Amazon due to guideline violations. Please keep an eye on the paperwork to avoid them.
#4: Neglecting tax responsibilities
Many sellers do not bother learning about sales tax obligations while selling on Amazon. However, a seller’s tax-related responsibilities are based on several factors including, but not limited to, the states where the business is based, state nexus, business activities, and state policies.
In the long run, it is necessary to understand your tax liabilities on Amazon. You should know which component — tax collection, filing, or remittance — applies to you, and when they are required. Make sure your books are well organized from day one, to avoid future issues.
#5: Failing to follow the guidelines
Being one of the largest shopping platforms on this planet, Amazon has to manage numerous factors to nurture the trust of millions of buyers worldwide. If there is no trust, why would one want to buy? And if no one buys, how can Amazon do business?
Amazon has implemented a myriad of guidelines for sellers so there is nothing illegal, harmful, or malicious on sale. And if one breaks them, the consequence may range from search suppression to even your account getting shut down for good. Getting your account suspended, especially if your inventory is with Amazon as part of the FBA program, is a heavy price to pay. So make sure to understand and stay up to date with all the rules while selling to avoid this mistake.
#6: Not putting the customer first
They say that eyes are the windows to one’s soul, and just like that, the customer service of your business is indicative of the soul of your enterprise. Whether you value your buyers’ judgments, and reviews, addressing their queries and complaints often distinguishes a good business from a mediocre one. A Gartner survey says that more than 60% of shoppers prefer great customer service over price. Various statistics strengthen the very fact that high-quality customer service-providing sellers tend to retain their customers more frequently.
If you are selling using FBA, then you need not worry as Amazon will take care of the customers, but if you fulfill your orders, always be ready to address and resolve the customers’ issues. Keep in mind, that time is of the essence here. If you do not resolve this within time and the customer does not like the shopping experience, they will promptly go to the competitor hoping for a better service there.
#7: Creating PPC campaigns without a solid strategy
Although Amazon Sponsored Product Campaigns are very useful in getting your listings to rank higher, the lack of knowledge on how PPC campaigns work may lead to more harm than good. There are several angles for a PPC marketing initiative to perform well and it is important to cover them all. One should also be adept in optimization strategies so the campaigns can be seamlessly adjusted to the changing market.
Launching a campaign before knowing its ins and outs may lead to the seller bleeding their hard-earned resources in vain. It is pivotal to plan your ad expenses so the overall profit or your margin does not take a blow.
#8: Inventory mismanagement
For an Amazon seller, your product being out of stock during the peak sales period is a scary nightmare. This causes a drastic drop in rankings. And when it drops, you’ll lose potential buyers to your top competitors. Also, note that well-stocked listings often rank higher as the algorithm prefers sellers who can serve the customers promptly.
To address the concerns, develop a habit of keeping your eyes on your inventory. To make your job easier, you can use one of the many inventory management software available in the market. Amazon FBA also provides inventory management capabilities for its partners so they can stay ahead of the curve by knowing when to refill their stocks to operate smoothly.
#9: Soliciting reviews
Let’s address the elephant in the room super quick! As an Amazon seller, you absolutely should not ask people close to you to write reviews under your listings just to build credibility and thus, rank up. Amazon strictly prohibits sellers from coercing a customer to write a review, let alone ask for positive feedback. Only the customer should decide to write what they feel about the product – be it good or bad. And their decision must not be influenced by the seller.
Amazon also does not like it when a seller provides incentives such as rewards or giveaways to ensure good reviews. These illicit activities result in harsh actions taken against the seller’s profile. Instead of those, you can always go for the Early Reviewer Program for genuine early feedback. Always make sure to pay good heed to the reviews to address shortcomings and improve your business.
#10: Not setting the prices right
Mistakes in pricing can show immediate consequences on a seller’s business. Many Amazon sellers don’t do deep product research to understand the market requirements and objectives, this mostly leads to a hastily decided price tag slapped on the product. This can go two ways:
- Overpricing: As the sale costs go up, the seller ends up with fewer customers and/or unsatisfactory margins.
- Underpricing: The product gets surrounded with similarly priced low-quality, cheap products which in turn can make your product seem unreliable – resulting in low conversion.
A seller must do thorough product research, market research, and competitor analysis to avoid misaligning product prices with business objectives, neglecting content consideration, omitting customer segmentation, overlooking pricing updates, basing quotes on costs instead of customer value perceptions, etc.
#11: Botched product launches
Most sellers do not give much thought to the launch of a product as they do for other technical things like SEO and backend management. One should realize that it is not enough to simply create product listings and let Amazon take care of the rest. That is only a start. One should be active throughout their selling journey from start to finish to get the listing to the top of the Amazon SERP.
The launch is an essential part of a complex series of initiatives that includes Amazon Sponsored Products campaigns, creating a buzz through influencer marketing, social media promotion with coupons and giveaways, and creating the listing with well-placed high-volume keywords that help the product rank well from day one. Early sales, reviews, etc. are vital as well. Do remember to update your listings with relevant newer keywords, seasonal keywords, etc. to stay ahead of the competition.
#12: Not taking into account shipping costs
Shipping charges are one of the most important factors when the buyer is planning on making a purchase. A major portion of the customers take a step back when facing high shipping costs. That is why you should always calculate your margins with the shipping expenses in mind. You can contact different logistics partners and get quotations for their services to decide which one is best for you, or opt for the Amazon FBA option as it costs less and comes with an array of features like Prime shipping, customer service through Amazon, faster delivery rates, return processing, etc.
#13: Late order fulfillment
Buyers love it when their desired goods are delivered promptly so they can get their hands on them as soon as possible. The customers usually prefer a listing that offers faster 1-2 days shipping speed than a competitor who takes longer to deliver.
To prosper ahead of the competitors, you must ensure prompt delivery of your products. Make sure your promise to the customer is well taken care of and he/she receives the item on time. Else the dissatisfaction of the buyers can appear as negative reviews under the listing which can start a downward spiral of reduced visibility and sales. To counter all these and take some load off your head, you can also ship using Amazon’s fulfillment service, FBA.
Before we finish
Now that we have discussed this thoroughly, it is clear that there are a lot of pitfalls Amazon sellers can succumb to. Many of them can be devastating. All these risks revolve around customer service, order fulfillment, inventory management, and product listing mainly. But don’t let them stop you. You will make a ton of mistakes, you just need to think of it as a stepping stone to success.
Feeling overwhelmed by the complexities of starting as an Amazon seller? Let eStore Factory be your trusted partner. Our seasoned Amazon experts offer personalized guidance and hands-on support to navigate the intricacies of Amazon selling. From optimizing product listings to managing inventory and adhering to Amazon’s guidelines, we’ve got you covered.