📝 10 Common Mistakes New Amazon Sellers Make
Are you a new Amazon seller looking to avoid costly mistakes? Look no further! In this article, we'll cover the top 10 mistakes that most new Amazon sellers make and how to avoid them. From not following Amazon's policies to poor inventory management, we'll cover it all. So, let's dive in!
Mistake #1: Not Following Amazon's Policy
One of the biggest mistakes new Amazon sellers make is not following Amazon's policies. If Amazon tells you to do something in a certain way, make sure you follow it. For example, when shipping items to Amazon, if the box weighs more than 15 kg, you will need to stick a warning label that warns Amazon that this box is more than 15 kg. Most new sellers decide not to do that, and this eventually results in them getting their first warning, second warning, and eventually getting suspended. So, make sure you always take the time out to read Amazon's policies or if they tell you to do something in a certain way, make sure you do it that way.
Mistake #2: Confusing a Private Label Listing with a Wholesale Listing
Another common mistake new Amazon sellers make is confusing a private label listing with a wholesale listing. When doing wholesale on Amazon, you're basically looking for listings that are already selling. However, if a listing has less than three sellers, most likely that listing is a private label listing, meaning a person owns that listing because they're selling their own brand through that listing. Whereas a wholesale listing usually has more than three sellers, and they're three different sellers who are selling the same product which they have bought from a wholesaler or an authorized wholesaler or the brand directly. So, to simply make sure that you're not selling a product under a private label listing, just check the number of sellers in the buy box and make sure the buy box has three different sellers selling that product. Even if you accidentally start selling under a private label listing, and if you do it multiple times, Amazon will suspend your account, and trust me, suspension is no joke because I had my account suspended once, and it took me almost three months to get it back.
Mistake #3: Not Spending Time on Looking for a Profitable Supplier
Whenever someone jumps on Amazon to do Amazon wholesale, they expect to start finding profitable suppliers by just Googling, and they will see a supplier come up. It does not work like that. You will have to spend time looking for a supplier that is profitable because most likely, the suppliers you come across are not going to be profitable. Make sure you go to the last page of that Google search when you're looking for a supplier because remember, wholesalers are not good with creating websites or SEO, so some great wholesalers won't even appear on the first page or even the second page. So, make sure you go through all the pages on Google. My number one tip to get a response from a supplier much faster as well as look so much professional is to always pick up the phone and speak to your suppliers instead of just emailing them. Call them because remember, they're getting hundreds of emails from other people as well, but if you call them, you're likely to be one of those five or ten people who are actually taking the time out to call them, and businesses usually do business through the phone. They're not just sitting there and emailing.
Mistake #4: Not Using Social
Most new Amazon FBA sellers who start Amazon wholesale end up spending money on everything except a good product research or product analysis software. I was spending £50,000 in 18 months to build this software specifically for Amazon wholesalers because ever since I started my Amazon FBA wholesale journey, there was never a tool that does product research and product analysis in one software, and that's the reason why I decided to spend that much money and time to build this software that does both of it together, and it does not cost you as much as having multiple software to do the same thing. With Social, you get access to a product database that you can filter according to the filters that you want, and it will give you products for those specific filters. It also comes with an extension that gives you data about every single product on Amazon, such as the variation data, the sales data, the price data, the PSR data, all the data that you need as an Amazon wholesaler to make sure that the product is selling well. Along with that, there is the Discord Community where I'm planning to do free weekly calls as well as the free FBA crash course, which helps you to go from zero to making your first £1000 in sales doing Amazon wholesale, and there is a lot more on there, and Social has just begun. It's just the version one, and it's just going to get better and better over time.
Mistake #5: Poor Inventory Management
If you're sending a lot of stock to Amazon, then you do pay storage fees, and also, your money will be tied up in that stock. If you send too little stock, then you will lose out on sales once you have run out of stock. This is the reason why you need to make sure you're focusing on how much inventory is at Amazon, how fast it is selling, and how you can make sure you never run out of inventory. One way to do this or the way I do it is by doing a test shipment. Every time I find a product, before I order a large quantity of that product, I always do a test shipment from anywhere from 10 units all the way to 50 units. Once I've sent that product to Amazon with that amount of quantity, I will see and analyze how long it took to sell that amount of stock. For example, if I send in 10 units, and they were sold in one day, then it tells me that I am selling 10 units in one day, meaning to have enough stock for 30 days, I will need 300 units. This way, I'm making a calculated risk or taking a calculated risk rather than just going to our supplier and ordering like 3,000 units, which are not going to be sold in 30 days. Doing a test shipment just doesn't allow you to verify that the product is good but also allows you to know how much inventory to send Amazon or to order from your supplier.
Mistake #6: Thinking That Listings with More Than 10 Sellers Are Really Competitive
Now here's the thing, yes, if there are more sellers, that means it will rotate. The buy box will rotate between all the sellers, and so if the listing is making 600 sales a month, and there are 10 sellers, then you're going to get around 60 sales, and each seller will get 60 sales. But that doesn't work like that. Listen to me. If there are 10 sellers in a listing, and eight of them are priced at £14, and the first two are priced at £11, then out of those 600 sales, the buy box is mainly going to be winning between the first two sellers who are priced at £11. So, the sales which each of these sellers will get not 60, but they will get 300 each, and that's how the buy box works. So, just because a listing has a lot of sellers, don't start thinking it's a really competitive listing because if you can compete with the price, you will make most of the sales from that listing.
Mistake #7: Overestimating Your Profit Margins
When selling on Amazon, there are so many types of fees as well as hidden fees that if you don't know, you will most likely make a loss. I see a lot of new sellers just calculating their profit margin by taking the cost for that product from the supplier and then looking at how much it sells on Amazon, and then they look at the Amazon fees, and they try to get their profit margin. But you need to also understand that there is VAT, which Amazon charges on top of the fees if you're VAT registered, and then also the shipping cost from your house to Amazon, and then the prep course. Then there are all these more things that you need to consider in your actual cost so you can make sure you have your exact profit margin because there's no point in making sales if you don't know exactly how much you're making. For this, you can go to your Amazon account, go to payments, and see your transaction view, and you'll know exactly how much you're getting back on every single sale from Amazon. Or you can get software like Seller Toolkit or Seller Board or Shopkeeper, any of these, and just connect your Amazon account, and you will be able to add in the details of your product costs, your prep cost, everything, and then you'll be able to see your exact number.
Mistake #8: Under or Over Investing in Courses
If you're just starting your Amazon wholesale journey, don't invest in more than one course. Make sure the course you're investing in the first place is good, and the person you're watching or listening to knows what they're talking about and actually has that Amazon themselves. Then only invest in that, and after that, if you've learned it from them, go and apply that thing. Don't think that you're going to buy another course, and you want to learn something different that's going to make you quick money. Invest in one course and then take action. Without taking any action, you're not going to make any profit. So, ensure you don't be a person who does not invest in a course and says, "I'm going to learn everything myself." Because I did that, and I lost a lot of money. Remember, if you invest in a course, you're basically taking a shortcut to success. The person you're buying the course from has already done what you want to do, so you're learning from them, and you're going to avoid the mistakes. That's the only reason why you're paying them. Don't be the person who's going to keep buying so many courses, thinking some magic thing is going to happen, and you're going to start making a lot of sales.
Mistake #9: Being Impatient or Having Unrealistic Expectations
Most new Amazon sellers that start selling on Amazon think it's a get-rich-quick scheme, and they think they're going to get their first product, start making thousands of pounds every month, and they will quit their job. It does not work like that. Remember, 95% of businesses do not succeed. On Amazon, you actually have a chance of succeeding, but if you treat it like a get-rich-quick scheme, you're not going to succeed in this as well. Make sure your expectations are realistic. Make sure you give it enough time. Make sure you're putting in the effort because if you're putting in one hour a day, then you're only going to get results of one hour a day. If you put 10 hours a day, then you're going to get 10 hours a day worth of results from your business as well. Make sure you're honest with yourself and actually put in the work. Another thing is that most people get distracted by this thing called shiny object syndrome. They're scrolling on TikTok, and they see, "Oh my Lord, this new AI cytosol is going to make them thousands of pounds every single month." They put this thing aside, they start that, and then after two months into that, they see this crypto coin has blown up. They decide to put another portion of their money into this crypto thing, and then overall, eventually, they succeeded none, and then they say this whole online making money online thing is a scam. That's something to avoid at all costs because you will succeed as long as you put in the work.
Mistake #10: Not Learning from Your Mistakes
If you're making a mistake once, that's fine. If you make it twice, that's fine. But if you keep making it over and over again, then that is no mistake. You're just stupid. I can't say that to you, isn't it? But anyway, you get the point I'm trying to make. So, just make sure you learn from your mistake, and that's the only way you will grow as a person as well. Don't get demotivated every time you make a mistake because we all are humans. We all make mistakes, and that's how we learn and grow.
Highlights
- Always follow Amazon's policies.
- Make sure you're not selling a product under a private label listing.
- Spend time looking for a profitable supplier.
- Use Social for product research and analysis.
- Do a test shipment to avoid poor inventory management.
- Don't overestimate your profit margins.
- Invest in one good course and take action.
- Be patient and have realistic expectations.
- Learn from your mistakes.
FAQ
Q: What is Amazon FBA wholesale?
A: Amazon FBA wholesale is a business model where you buy products in bulk from a supplier and then sell them on Amazon.
Q: How do I avoid getting suspended on Amazon?
A: Always follow Amazon's policies and make sure you're not selling a product under a private label listing.
Q: How do I find a profitable supplier?
A: Spend time looking for a supplier that is profitable. Go to the last page of that Google search when you're looking for a supplier.
Q: How do I avoid poor inventory management?
A: Do a test shipment to see how long it takes to sell a certain amount of stock. This way, you can make a calculated risk rather than just ordering a large quantity of that product.
Q: How do I avoid overestimating my profit margins?
A: Consider all the fees and hidden fees when calculating your profit margin. Use software like Seller Toolkit or Seller Board or Shopkeeper to see your exact number.
Resources:
- [Social](https://www.social.com/)
- [Seller Toolkit](https://sellertoolkit.com/)
- [Seller Board](https://sellerboard.com/)
- [Shopkeeper](https://www.shopkeeper.com/)
