The Amazon FBA business model is enticing, but it is not without its pitfalls. Even the most seasoned sellers can fall into traps that can lead to wasted investments, unnecessary stockpiles, and diminished profits. Here are some common Amazon FBA mistakes and how to avoid them.
Not Getting Approval To Sell
Before sourcing your inventory, make sure you are approved to sell the item. Even if a product seems similar to others you sell, different Amazon categories may require separate approvals. Failing to secure the necessary approvals can lead to wasted investments and lost time.
Ignoring Price and Sales History
Don’t just look at a product’s current price and sales performance. Analyze the history of the product’s price and sales to get a better idea of its overall viability. A product selling well now but showing a history of declining prices may not be as promising as it seems.
Overlooking Competitors’ Stock Levels
Keep an eye on the stock levels of your competitors. If a seller has a vast amount of stock, they are more likely to win the Buy Box, making it harder for you to compete.
Ignoring Amazon’s Excess Inventory Alerts
Don’t dismiss Amazon’s excess inventory alerts. These notifications indicate that Amazon wants your inventory reduced, possibly due to a sector slowdown you may not have noticed. Respond by offering discounts, liquidating stock, or increasing advertising to reduce inventory levels.
Not Checking Amazon Charges and Reimbursements
Regularly check what Amazon charges you and ensure you receive your reimbursements. Sometimes mistakes happen, and it is your responsibility to catch them.
Operating on Slim Margins
Ensure that you make a reasonable profit after Amazon fees. A margin too slim does not give you the flexibility to lower prices if needed and still make a profit.
Over-relying on Amazon Seller Central
While Amazon Seller Central is a valuable resource, it may not provide all the tools you need as your business grows. You may need capabilities like automatic repricing, in-depth analysis, and more granular control of your PPC ads. Assess your needs and invest in additional resources if necessary.
Not Outsourcing Non-Core Activities
Identify the areas where you add the most value and consider outsourcing the rest. For example, if your strength is in product sourcing, you may not need to handle transport, packing, advertising, and social media content yourself.
Avoiding these common mistakes can help you build a more successful and sustainable Amazon FBA business. Remember to always do your due diligence, regularly assess your business needs, and adapt accordingly.
