Now the headline can seem daunting but don’t panic, we are going to show you the mistakes and traps which Amazon FBA sellers can fall into and how to avoid them. This way you can keep an eye out for potential mistakes and turn them into successes.
If you are committed, level-headed and willing to put in the time and effort your Amazon FBA business will soar! So, with that in mind let’s get started.
FBA is not a get rich quick scheme.
Firstly, before you jump into the world of Amazon FBA and all the excitement it holds, remember this. Amazon FBA is a business, not a get rich quick scheme. That’s not to say that you can’t build an incredibly successful side hustle or full time business.
But Amazon FBA is still a business and will take time to develop and grow. The enjoyment should come from the journey you experience and what you learn rather than just the shiny destination at the end,
FBA requires you to invest in products and equipment as well as dedicating time to source your products. Online creators can make it appear that finding deals takes a matter of seconds and it can with the help of software and your own knowledge but it also sets a high expectation for new sellers. Some days you may find deals than other days, if you can dedicate the time you will find great deals.
So what’s the take away?
When starting out it is best to view Amazon FBA as an opportunity to learn. As you become more comfortable with how Amazon works and have practice analysing deals you will find the process of sourcing deals is easier.
Rather than looking to get rich quick focus on re-investing your profits and growing your business. This is the quickest way to scale and doing this will benefit your business in the long-term.
In the short term you could lose money.
Yes, I know, it sounds off putting but let me explain. When you are beginning your FBA journey you will need to pay for your Amazon Seller Central subscription, equipment, stock and any software subscriptions.
Click here to learn how much money you need for FBA in honest terms.
It is important to recognise that in your first month, or two months you may not turn over a profit. This should not dissuade you from Amazon FBA. If you are reinvesting your profits (which I strongly recommend you do) you can focus on finding winning products and benefiting from the sales in the future!
Let’s look at this from another angle.
By investing in software or equipment you free up more time to source new items. For example, although you do not need a label printer when you are first starting out, a label printer will only become more and more valuable as your sales grow. The more sales you have the more time you will save having a label printer compared to printing the labels yourself and sticking them to your stock.
In the early stages of your FBA journey you can learn more about Amazon FBA and how it works. Whether you are unsure about Amazon’s processes or sourcing your products. Say you find a product but are unsure about whether it is profitable. You buy 10 units anyway only to find the items price has risen since you sent them in, cutting into your profits.
But this isn’t the end of the world, in future you will know to check the historical price graph to avoid losing out. And having only brought 10 units you can sell these items quicker then if you had brought 50 units.
If you are in this position at the moment you can check out our Youtube video about reading the price graph here.
Amazon FBA is competitive.
Amazon FBA is an incredible business model. And as a result of this, you can expect to find increased and fierce competition as a seller. With an ever growing number of sellers you will need to have competitive pricing if you want to win the Buy Box.
Inexperienced sellers, or sellers who are liquidating their stock may use repricers to ensure that their pricing is 1 pence lower than the Buy Box. This can lead to the listing price being driven down as buyers undercut one another to win the Buy Box. You can learn more about undercutting in our recent blog. But do not panic, if you are patient and wait for sellers to sell their stock you can then set your price higher and still have the most competitive pricing.
Before you start to worry.
Yes, Amazon FBA is competitive but with patience and understanding you can be a success. Rather than undercutting the price of an item to win the Buy Box, look to match the Buy Box price so that you can retain your profit margins.
By diversifying your products you can also avoid placing your profit in one item. This is important as it means if an item’s price drops you have your other listings which are unaffected or could be selling for a higher price than you had expected, making you even more profit.
Amazon can be a pain to deal with as a seller.
Amazon pride themselves on their customer service, however this does not extend to their sellers. By focusing on high quality customer support, support for Amazon FBA sellers is not prioritised as highly by Amazon. Contacting Amazon Support can therefore be a bit of a hassle. Because of this we recently wrote a blog on how you can contact Amazon Seller Support.
This can be frustrating if you are trying to contact Amazon about a pressing issue, such as an IP claim. To help you to avoid dealing with IP claims we have the Profitl IP Warning feature so you are alerted if an item is a potential IP risk.
Check it out in action below!
You’ll go through tough times.
It isn’t nice to think that you will experience difficult days. Perhaps your stock is still processing or you were unaware you need to follow extra requirements to package an item, affecting when you hoped to send off times. These things can happen and can lead to some sellers deciding to give up.
The biggest strength you can have as an FBA seller is recognising that you will get through tough times and make it out the other side. Having a positive mindset is essential when it comes to building your Amazon FBA business.
The positives massively outweigh the negatives when it comes to Amazon FBA. Although it can affect your plans, viewing inconveniences as bumps in the road will only strengthen your store. As you will learn from your mistakes and know what to do in the future.
Amazon have a huge amount of customers. Amazon FBA is an incredible opportunity to generate sales. With Amazon FBA you do not need to worry about storing your stock in a warehouse, completing customer support or sending your items to customers. Amazon deal with it all for you.
So what can I do to avoid these mistakes?
Let’s focus on the positives. We know the mistakes which Amazon FBA sellers can make, but how can you avoid them?
- Analyse the historical data on price graphs to better understand an items pricing. We have a Youtube video all about this here.
- Set realistic goals for yourself. With Amazon you have limitless potential but it is important to set realistic goals. It can be easy to see sellers online posting incredible results and assume that you can achieve the same in a month or two. But what these sellers do not show is the time and effort they have dedicated to growing their FBA business. Setting realistic goals enables you to focus on achievable goals and see your progress more clearly. Rather than setting a goal which is outside of your reach and become disheartened.
- Outsource jobs where you can to free up your time so you can focus on sourcing profitable items. This could be by investing in a repricer or the Profitl software.
- Mindset is everything, use mistakes as an opportunity to learn. No one likes making mistakes, but rather than giving up view the mistake as the opportunity to learn. The more you learn the more prepared you are to deal with anything in the future.
To conclude, we hope you avoid the same mistakes that Amazon FBA sellers can make and apply some of the things we have discussed to grow your FBA business. No one enjoy’s making mistakes but we hope that with these things in mind you can turn these negatives into a positive. Amazon FBA is a brilliant opportunity to generate a secondary stream of income, regardless of your goals. And we now you have what it takes to succeed.
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