So you have decided you want to be a seller on Amazon FBA. You realize the opportunity is huge for private label products as Amazon grows and expands to more markets all over the world. No one likes to make mistakes and if you are asking this question you want to learn from the mistakes of others.
There is a recipe to selling on Amazon with many small steps. Even if you are aware of all of them the process can be overwhelming at times. These are common mistakes that new sellers (and sometimes established sellers) on Amazon make when they first start selling FBA. Learn from others and save the pain and/or cash of a costly oversight.
Not Following The Terms of Service
Amazon's guidelines are not mere suggestions. They must be followed or you could have your account suspended or worse, banned. It's critical to adhere to the seller policies in their marketplace. Use the FAQs, seller forums, and your mentor.
Don't wing it and hope for the best. It is important to keep in mind that Amazon's number one priority is their customers. The people you sell to are Amazon's customers and they will keep their best interests in mind. So should you.
Not Having Enough Money to Keep It Running
The cost of your first product plus shipping is only a start. Before your inventory is sold you'll need to reorder your product to prevent going out of stock. You may even need more capital for your subsequent order because you are scaling up.
The first sample order is to be a proof of concept. Now you are possibly looking at ordering a larger quantity for a better price per unit either from the manufacturer or your freight forwarder. A lower landed product cost means more profit per unit. Selling out will hurt your listing so have money aside to make your second order.
Successful businesses need continued investment to grow. You should not expect a quick return on your initial investment. Instead, plan as if all the returns from your first order must go into reordering a larger quantity. In addition to setting aside funds for taxes and fees, it is important to scale your order quantities with your sample order.
Not Managing Your Stock
This is a continuation of the previous mistake. Product availability plays a major role in search ranking. Going out of stock will have you see your sales rank (BSR) fall. This will push you back pages thus making your product harder to find.
"Harder to find" translates into fewer sales. Amazon will also penalize you if you oversell and have to tell a customer their order can't be fulfilled. You want to have 60 days (or more) of inventory so you don't run out sooner than expected. Use the Amazon Inventory Planner to never run out of stock.
Log into Amazon Seller Central, then hover over "Inventory" and select "Inventory Planning." You'll see the "Restock Inventory" tab there where you can better manage your inventory levels way before they run out.
Not Building a Relationship with Your Supplier
Create and maintain a strong relationship with your supplier. Despite time differences between China and the US (or wherever you are) you will be surprised at how early or how late your supplier will work for you.
Your representative will be genuinely curious as to who you are, your marital status, family, and what you do for hobbies. This is normal. Be prepared to share pictures.
It is very different than how we conduct businesses as Westerners today, but your relationship should not solely be transactional. Make sure your supplier ensures quality and it is never sacrificed to save money. This is easier accomplished with a friend, so take the time and share some emojis back and forth
Inadequate Product Research
Your product will fail if you don't do thorough research before choosing what to sell. Suggestions from friends are not only not enough, but usually bad as well. If your grandma is writing about it on Facebook, you're looking at super fierce competition and a saturated market. Follow the numbers to make educated decisions. Don't let emotions guide your business decisions.
There are plenty product research tools designed to help you do better market research, and they work very well. These can tell you average monthly sales, how many competitors, market demand by search volume, and may even provide an opportunity score so you can quickly decide which products aren't worth researching and which ones warrant a thorough look.
Don't fall in love! Find and track several products for at least 30 days so you make an informed decision. This can be the hardest part of starting your Private Label business, but it doesn't have to be. It can take months to get a product launched from concept, so taking a month to find the best use of more than half a year in business is a worthy sacrifice over choosing something on a whim.
Inadequate and/or Incomplete Product Listing
An optimized listing is a listing that converts prospective buyers into one of your customers. You will need high-quality pictures, keyword heavy, yet benefit-driven bullet points, and a detailed description with killer sales copy to answer all the questions a customer may have about your product and convince them your product is the one and only solution.
Check out this article where we talk all about how to find a product to sell and some tips on how to better optimize your listing.
Your product must be positioned in a way to fulfill a dream or alleviate a painful problem. This is a golden nugget of information buried within an already awesome post (you're welcome) to understand the consumer and why people buy. Sell them the dream or fix their problems.
The proverbial garlic press is NOT only an easy way to finely cut garlic. The garlic press fills their home with the smells of an Italian kitchen. It summons images of Nonna making pasta by hand, of a candlelit dinner with a loved one, and Instagram-worthy food made with the finest and most fragrant garlic that would not have been possible without buying YOUR garlic press.
If you get this and can apply it, you are far ahead of the pack. If you get it or think you do kinda, but don't know how to apply it, you might need to hire a copywriter or read the Ultimate Sales Letter, by Dan Kennedy.
Delaying Response to Customer Inquiries
This is not the 9 to 5. While you aren't on call 24/7, you do need to respond to customer inquiries within 24 hours even if it's the weekend or a holiday. This is great customer service too. It could be the difference between a one-time purchase and a repeat buyer. I
f that's not reason enough, Amazon dings you if do not provide timely responses. Their number one focus is their customer. It should be your focus too.
Overlooking Customer Feedback
Selling successfully on Amazon requires product reviews. You need to maintain a high seller rating while you also accumulate product reviews. The first reviews, the first dozen especially, are the most important as they demonstrate social proof; meaning your product exists, it doesn't suck, and someone else should buy it too.
Always respond to negative feedback. Talk to the customer and fix it if possible. It could change a 1-star review into a 4 or 5-star review. More importantly, your high seller rating can unlock many doors within the Amazon world, so keep up with your customer service.
Losing Money on Paid Advertising (PPC)
Running proper ad campaigns is a necessary skill to acquire to sell on Amazon. If your ad campaigns are not done correctly you will see yourself losing money rather than increasing sales.
PPC is a skill that not everyone will master, but one that you should at least be familiar with the basics. The demand for professionals is great and fortunately the experts are available for hire. To make PPC super easy, we recommend using PPCscope, as it will not only provide a great dashboard to track your PPC efforts, but you'll learn so much from the included training.
You can get started for free! Don't second-guess when it comes to your ad spend. Make sure what you are spending money on converts for you. Try PPCscope, I'm sure you'll be glad you did.
Common PPC mistakes include paying for low volume keywords, not including long tail keywords, and relying only on high volume costly keywords. Many sellers don't even pay attention to their PPC reports and end up paying for clicks that never convert! Take a look at our PPC guide where we dive deep into what PPC is on Amazon and how you can optimize your sponsored ads to scale your profits.
Competing Against Amazon
This should go without saying, and most of the time it does, so let's bring attention to this briefly. You think you found a great product with huge demand and low competition. The numbers are amazing. Is Amazon (AMZ) the number one seller? Run away!
Amazon's products will always have higher rankings in search, better exposure on the platform, and usually margins so thin you couldn't possibly compete on price. These are products that Amazon knows are so profitable that they have struck up a deal with a manufacturer and brand it for themselves.
Take a look at our products to avoid guide to learn more about which products you should steer clear of.
Too Much Stock when You Start Selling
I warned about going out of stock and not having enough money to reorder more inventory. Well, just because you have the means to order 5,000 units and get a great discount from your manufacturer in the beginning, doesn't mean you should.
Your first order should be less than 1,000 units, maybe as low as 300 depending on market demand, shipping times, and what terms you negotiated with your supplier. You did your research and now you want the market to validate your data and listing by seeing there is room for your product to flourish.
Not Managing Expectations
Amazon FBA has been touted as a great way to make money in your free time. A passive income that only requires a few hours every week. This is not true, especially if you are just starting your business on Amazon. It will require a significant amount of time for the first several months.
It is important to cultivate a mindset for success. Check out this article where one of our Gorillaz Tribe Silverbacks reveals how he is able to cultivate a growth mindset. There is nobody but you that can make this business work for you. It will take a lot of stretching your comfort levels at first.
It will be all worth it, but it is far from passive at the start. Your success may embolden you as you scale up or find variations on your product or enter new niches with different products. You found your passion and drive and selling on Amazon could be your new full-time job. Congratulations! You are your own boss and a power seller.
Not Focusing on Creating a Brand
There are multiple sellers with similar or even identical products to yours. Without a brand your product is simply a commodity. The potential buyer will buy the lowest cost item. You must leverage the power of your brand to differentiate your product from the competition.
Start with a logo, name, and ethos that connects with your target audience. A unique and eye-catching logo on your product shows the customer that you are a brand and not a seller of generic low-quality Chinese goods.
You don't have to think too much about your name, but it should leave an impression rather than be entirely forgettable. Offer a unique selling proposition in your bullet points. Succeed where your competition fails. This can be determined by reviewing their one-star and two-star reviews.
Your product should solve the problems your buyers had with other products. Communicate these solutions as benefits your products will bring to your customer's lives.
Not Having a Coach or Mentor
It can be invaluable to have someone to go to for answers. People have and continue to launch successful businesses on their own. Unfortunately, many people fail because they get in over their head, buried under too many unknowns, overwhelmed by choices, and confused by a new language of insider jargon.
Some people bounce from expensive course to course and try to create their own formula for success by cherry-picking the parts that they like or in search of clarification on a topic they don't understand. With so many experts out there it is important to choose someone who has not only been there but is still involved in helping new sellers.
Being able to see problems the way someone without experience would, with fresh eyes, this can be the difference between failure and success.
It often takes the community to help an individual have that "light bulb moment" where everything clicks and it all makes sense. People who work in groups are ten times more likely to succeed. You don't have to, nor should you, have to figure it out all alone.
Wrapping it Up
This is not an exhaustive list, nor is it intended to be, of all the mistakes you could make when you first start selling. As I said before, people who are already selling and stuck, might be making one or more of these mistakes. Don't rush the process. Pay attention to the details. And if you have a question, stop to ask someone before committing an error. The Gorillaz Tribe is here to help.