Common Pitfalls in Amazon Operations & How To Avoid Them

We sell products on Amazon to make money, but many people think that selling on Amazon is expensive. Costs include product expenses, logistics, Amazon platform fees, warehousing, and hiring. Many sellers unknowingly invest a lot of money and end up losing accounts. Therefore, it's important to understand the boundaries of Amazon's operations and avoid major pitfalls.

A successful Amazon seller in China has shared some key pitfalls to avoid based on years of experience.

"Set a budget and plan your finances to cover your Amazon business. Don't invest too much at the beginning," and "Do not put all your eggs in one basket."

Optimism is important for success, but too much optimism can be harmful. It's crucial to be realistic about your business. Make a reasonable budget plan when starting and running your business. Minimize your initial investment and test the market. If you succeed, learn from the experience and quickly scale up. Besides covering your operating costs, it's also important to set aside money for growth opportunities.

Avoid These Mistakes When Choosing Products to Sell on Amazon

When selecting a product to sell on Amazon, you should avoid the following mistakes:

• Avoid stocking many different products; focus on finding inelastic-demand products.
• Avoid big, heavy, and difficult-to-ship products.
• Avoid trademarked products and counterfeits.
• Avoid choosing products based on your preferences, ignoring market needs.
• Avoid highly competitive, low-priced products dominated by big sellers, such as Shenzhen's "Three Treasures" (mobile phone cases, USB cables, chargers).
• Avoid over-pursuing differentiation, exclusive models, and upgraded products, as these are time-consuming and may result in high trial-and-error costs due to a gap between expectations and the market.
• Avoid seasonal goods.
• Avoid selling products in categories dominated by big brands.

However, you don't have to worry about selecting products. The product research function of SellerSprite 2.0 will help you choose the right product. You can learn how to use the product research function to select a profitable product from the tutorial video.

Avoid These Issues When Launching New Products and Shipping Goods

When launching new products and shipping goods, you should pay attention to avoid the following situations:

• Wrong Category: If your product is listed in the wrong category, it will be removed.
• Misuse of Variation Listings: Incorrectly using variation listings can lead to them being split.
• Incorrect Size Information: Filling in incorrect size details can result in higher costs from Amazon than expected.
• Frequent Deletion of Shipping Plans: Frequently deleting shipping plans during FBA shipments can result in your account losing FBA shipment eligibility.
• Incorrect Trademark Information: Randomly filling in trademark names can lead to infringement issues and removal of your sales authority.

Avoid Breaking These Rules When Running Your Amazon Business

When running an Amazon business, avoid violating the following rules, whether intentionally or unintentionally:

• Fake Orders and Reviews: Creating fake orders or reviews, or using black-hat techniques, can result in your account being removed from sales authority.
• Poor Product Quality and Slow Delivery: Low-quality products, slow delivery, and poor customer service can lead to a high Order Defect Rate (ODR), causing Amazon to suspend or terminate your account.
• Incorrect Promotion Setup: Setting up promotions incorrectly can result in a large number of low-priced orders in a short time, leading to significant profit loss.
• Incorrect Advertisement Setup: Mismanaging ads can cause you to exceed your budget, wasting money.
• Spiral Model Mismanagement: Using the spiral model for pricing and sales without proper follow-up can result in excessive losses.
• Excessive Price Increases: Raising product prices too much can cause you to lose the Buy Box or be flagged by Amazon for manipulating sales.

Beware of These Pitfalls in Amazon Competition and Competitors

For competition and competitors, the pitfalls you may encounter include:

• Malicious Attacks: Competitors may launch malicious attacks such as filing false complaints, leaving bad reviews, clicking on your PPC ads to drain your budget, hijacking your listing, or raising quality and security issues after purchasing your product.
• Listing Manipulation: Competitors might secretly change your product listing to an adult product attribute, causing it to be blocked by the system.

Common Pitfalls Sellers Can Easily Fall Into

In terms of platform rules, sellers can easily fall into the following pitfalls:

• Infringement and Quality Issues: Problems such as infringement, lack of proper certifications, or incorrect plugs (e.g., issuing a European plug in the UK market) can lead to listings being deleted and, in severe cases, removal of sales rights. Examples include lacking CE certification for electronics, UL certification, or CPC certification for toys.
• Changing Bank Account Information: Changing your bank account information can result in the removal of sales authority. Different bank accounts have different fees and customer service protocols. If you need to change your bank account info, there is a three-day security hold during which fund transfers cannot be initiated. It's best to contact Amazon customer service beforehand and explain the situation to avoid issues.
• Sales Fluctuations: Large fluctuations in sales may also result in the removal of sales rights.
• Certification Requirements: Certain product categories require specific certifications, such as CPC certification for baby products and children's toys, MFI certification and UL certification for Apple's product accessories, and UL certification for LED strings. Without these certifications, your listing will be removed.
• Listing and Review Violations: Violations related to merging listings or reviews, manipulating rankings, abusing variants, or manipulating sales can result in the account being deprived of sales authority.

Although it may not be possible to completely avoid mistakes, keeping these lessons in mind can help you navigate the platform more smoothly and make money on Amazon.

Conclusion

By understanding the challenges and implementing best practices, you can navigate the complexities of selling on Amazon more effectively. 

For more insights and powerful tools to aid in product research, consider visiting SellerSprite. Their comprehensive tools and resources can help you make informed decisions, optimize your listings, and stay ahead of the competition. 

Equip yourself with the right knowledge and tools to thrive in the Amazon marketplace.

Related Articles to Read:

• 5 Best Amazon Chrome Extensions for Sellers in 2024
• Amazon Prime Day 2024: How FBA Sellers Can Prepare

Frequently Asked Questions

How do I stay competitive on Amazon?

To stay competitive on Amazon, focus on providing high-quality products and excellent customer service. Optimize your product listings with accurate descriptions and high-quality images. Regularly monitor your competitors and adjust your pricing and marketing strategies accordingly.

What are the problems with selling on Amazon?

Selling on Amazon can be challenging due to high competition, strict platform rules, and fees. Issues like counterfeit products and negative reviews can also impact your business. Additionally, keeping up with Amazon's ever-changing policies requires constant attention.

Is it difficult to sell on Amazon?

Selling on Amazon can be difficult due to the platform's competitive nature and complex rules. However, with proper research, planning, and dedication, many sellers find success. Utilizing tools and resources can also make the process easier and more manageable.

How does Amazon handle risk management?

Amazon handles risk management by implementing strict seller guidelines and monitoring activities on the platform. They use advanced algorithms to detect fraudulent behavior and ensure compliance with their policies. Regular audits and customer feedback also play a crucial role in maintaining a secure marketplace.