Key Mistakes to Avoid when selling on Amazon

Selling on Amazon can be highly advantageous, but it also comes with some risks. Merely 8% of sellers on this platform manage to reach sales of $100,000, and each year, hundreds of thousands of new sellers enter the competition.

To succeed on Amazon, absolutely every brand must have a robust strategy that accounts for the platform's unique characteristics. Let's speak about common challenges that brand face and share tips for avoiding them. Even the biggest corporations that seek assistance from our team have been impacted by these problems, and we understand that neglecting them can result in a challenging journey.

Hence, we present 7 pitfalls that one should avoid while launching on Amazon:

1 Setting prices too high

Although Amazon has a good reputation, achieving success on the platform is not certain. This is because the site provides an equal opportunity for brands of all sizes, and most customers do not have a strong allegiance to any particular brand.

Overestimating the importance of its brand can ultimately harm a company's chances of achieving initial success. Well, if you'll price your product nearly two times higher than your direct competitor, it might lead to low to none initial sales and stuck rankings.

Remember, that you launch on Amazon as a “nobody”. Zero social proof, no matter how genius is your product, patented or really differentiated, it still starts from the button, we now have visibility and no reviews, the only actual competitive advantage you can offer at the beginning is a low price and great value for money.?

Hence, it's crucial to perform thorough research on Amazon's pricing strategies by analyzing competitors' pricing and their performance on the top search results for relevant keywords. It's advisable to test different price points to optimize profits, but ensuring a first-page ranking should be a priority to increase sales.

2. Un-optimized Product Listings

It's common to underestimate the importance of a high-end listing when managing a large catalog, having a busy schedule, or just lacking of budget or willingness to invest. However, this approach can irreversibly harm your business. Reusing the same product listings your supplier gave you, creating low-cost images on Fiverr, neglecting a thorough market and competitor research to come up with the best marketing images, having small unreadable texts on mobile, missing a correct picture resolution, bad quality product images, wrong copywriting, lacking proper SEO, no videos or EBC are all common mistakes you must take into consideration.?

Also, make sure to customize your listings according to Amazon's requirements and TOS. Inaccurate categorization and incomplete product details on the back-end can also harm your chances of ranking in your target category. Amazon might automatically re-classify your ASINs or not index in its catalog based on the content of your listings.

Remember, there is no such thing as a perfect conversation rate, you can always aim higher, a/b testing is a crucial act any seller must keep on doing.

3. Neglecting Amazon's Marketplace Changes

Amazon's strict listing requirements are subject to changes, and failing to monitor and adjust to these changes could result in your items being hidden from search results. For example, when Amazon announced new apparel size standards, thousands of brands were suddenly pressured to reformat and optimize their listings. These changes can be confusing to track and understand, and Amazon may release them with very short notice, without accommodating individual sellers.

To stay on top of these changes, it's essential to be vigilant and have a process in place for adapting to new Amazon requirements. If this isn't practical, consider finding an expert or agency that can help you adapt quickly, stay tuned with all Amazon groups, forums and catch up with the latest podcasts and articles. The rules of engagement are constantly evolving, and it's important to stay informed and adjust accordingly.?

4. Overstocking and Understocking on Amazon

Brands often miscalculate demand on Amazon, leading to overstocking, especially during shopping events like Prime Day. New sellers may buy excessive inventory without understanding Amazon's unique audience and buying behavior, resulting in listing errors and fees from long-term storage and removal.

To avoid this, use sales trend tools like ZonGuru, Jungle Scout, or Helium 10 and learn the trade-off between lost sales due to stock-outs versus excess storage charges. Consider flexible reordering processes and frequent purchases for better inventory management.

On the other hand, launching with too few units is like admitting you are not going to sell much anyway. Your entire launching strategy must be based on the number of sales you are actually planning to do in your first months, calculate the stock you need, and give yourself an early chance in the competition. If you start good, too good, so you run out of stock very quickly, and if you restock only after a month or two, all your hard work, investment in promoting yourself, and ranking is being nullified while you are out of the game, painful.

5. Waiting for reviews to come in on their own

Not a wise strategy for Amazon. While the platform prohibits soliciting reviews, there are other methods to get your first reviews or to encourage customers to leave any.

Brands can use resources like Amazon Vine or the "Request a Review" button, as well as leverage ads and influencers to increase review volume. Smart and TOS compliant product inserts in addition to third-party apps like FeedbackWhiz that can automate communication with buyers are also common practices.

However, the utmost importance is simply a high-quality and differentiated product. If you have it in your arsenal with additional patience, budgets, and strategy, it’s just a matter of time, when your sales and business start to grow.?

The key element in understanding this matter is perceiving launching on Amazon as the chicken and the egg paradox. You can’t get reviews without sales, and you won’t get sales without reviews, or at least a significant number of reviews. Breaking through this paradox is what we call the “launching” period. Taking advantage of the “honeymoon” period is crucial, and the most important thing, in the beginning, is getting positive sales velocity no matter what. Profits must be pushed away totally when launching your first batch of products.

6. Not Protecting Your Brand on Amazon

One of the downsides of selling on Amazon is that it can attract counterfeiters, unauthorized sellers, and other bad actors. Despite Amazon's efforts to combat these issues, they persist. However, this shouldn't discourage you from selling on Amazon, as the benefits often outweigh the risks. Being present on the platform can give you an advantage in terms of being the first to list your products. You also must enroll in Amazon's Brand Registry program, which provides additional protection against knock-offs and unauthorized sellers.

To protect your brand further, you need to be aware of other dirty tricks that some Amazon sellers use to gain an unfair advantage or harm their competitors. It's important to remain vigilant and report any suspicious activity as quickly as possible.

To summarize, joining Amazon's Brand Registry program is a must requirement for protecting your brand on the platform. But you might also consider some more advanced protection programs such as Transparency.

7. Not Knowing Your Numbers?

Some sellers fail because they focus solely on generating sales without considering the expenses involved. They may overspend on unnecessary items or assume that their top-selling products are profitable without considering extensive PPC costs, miscalculating cost of goods, or other external expenses like 3rd-part warehouses.

To avoid this, it's important to track expenses and focus on turning revenue into profit. Accounting apps like QuickBooks and Xero can help, software like SellerBoard or H10 can help track numbers from day 1. Also, any cost-saving measures like outsourcing fulfillment and reducing inventory can improve margins.

To summarize, to succeed on Amazon, it's important to have a solid strategy that takes into consideration all the above. Understanding common mistakes that lead to failure is crucial but it’s also super important to understand the Amazon algorithm and how basic things like ranking and indexing are working.

?? Need help avoiding these pitfalls? Book a free strategy call with our CEO Guy Heretz !?

Contact us now and we’ll get back to you as soon as possible ??

Amazon Marketing Agency | Amazon Management - RPGECOM