Why Most Amazon Sellers Fail To Make Profits

The pitfalls of selling on Amazon — this is why you are not profitable.

“The longer you are not taking action the more money you are losing.” -?Carrie Wilker

Have you been struggling to make profits selling on Amazon? Don’t worry! You are amongst the many sellers who find the path to profitability grueling and testing. And I know it might. Creating a successful Amazon selling a business is neither too easy, nor it is complicated until and unless you are serious about it and put in the right amount of effort in the right direction. All you need is the correct guidance, required capital, directed dedication, and much patience.

It is commonly observed that merchants typically fall into one of the following three categories when they are taking off on Amazon:

1) They are total failures, and their business never actually takes off at all.

2) They get some little initial success, but the curve flattens soon, and they never truly learn how to grow up to a full-time income.

3) They attain great success and are well able to take their business to the desired income level.

I want you to be positive in the last category mentioned above, so I want to ensure that you are adequately informed. Kindly do not be put off by the negative tone of this blog’s title, I have no intentions to make you worry. Rather, I am planning to tell you how you can avoid these stumbles and hurdles and overturn other peoples’ mistakes into your learning lessons!

“Failure is not the opposite of success, it is a part of success” -Arianna Huffington

And on that note, here I have attempted to enlist some major reasons causing failure at Amazon:

1. You are not taking calculated risks

Every time you are putting in your efforts, time, and money towards the growth of a business, be ready always for an associated potential failure. The risk involved cannot be neglected. It is practically impossible to succeed in a business without taking risks.

If you are not ready to take risks,( mind you, I am not talking about dumb or uninformed risks, but am referring to educated and calculated risks), you will not see your business grow.

For instance, if you have only ever been selling coffee tables in furniture and you are just scared of venturing into another Amazon furniture item, you are letting go of a calculated risk that could probably bring good profits to your business. If you invest your time and capital to start a new category, you risk failing and not doing well in that new selling — yes, but you’re also risking losing out on a potential new stream of profits in your FBA business.

Suggested solution:?l would advise you to take calculated risks early on when the stakes are not that high. Venture into new categories, new strategies, and new techniques in your business when it does not ask for a huge investment of time or finance. Failure is unavoidable at some point in our businesses, so carry out the research, take a risk, and do learn from the ensuing failure when the potential loss expected is minimal.

2. You are doing almost everything on your own

Exhaustion and fatigue are major factors among Amazon sellers failing at the business. You might be starting out strong and see some early profits, but you very soon find out just how much energy and effort is required on your part to maintain the same level of sales revenue and profits. You must be waking up early, working for long hours, and your hourly wage still does not turn out to be any better than working on a decent job, except now that you’re running your own business, you have no healthcare benefits.

“Do what you do best, outsource the rest.”

Suggested solution:?If you want to succeed at earning a good income through FBA, you have to realize that you can’t be the only one to do everything in your business. Some aspects of your business are high-wage tasks — do those yourself. Other aspects of running an Amazon selling business are minimum wage jobs like packing and shipping inventory. If you are doing these lower-wage jobs yourself, you will not be able to scale your business to a good income height in the long run. You need to outsource certain specific tasks, so that you may focus your time and energy on high-dollar tasks.

3. Your choice of product is not right

This is the most significant part of your Amazon seller business, along with your account setup. If you make a wrong choice of the product, whether or not your marketing tactics, PPC, and other aspects of selling are above average, you will still fail miserably.

Suggested solution:?When carrying out product research, there are different vital factors to account for, such as the demand level of the product, sales revenue, potential profit margin, ease of manufacturing, level of competition, and many more. If you adhere to these requirements and do not try to manufacture viable products, you shall stand a higher chance of being successful. You might also want to get listed on as many Amazon categories as possible. Even if you have no urgent plans to sell there, you might want to sell in that product category in the future.

4. You are launching a PPC campaign without a proper strategy

Amazon Sponsored Product Campaigns are indeed an excellent and very definite means to improve the visibility of your product listing. However, a lack of basic fundamental understanding here may seriously dampen your chances of making any profits through the channel. In cases where you launch an ad campaign without complete and encompassing knowledge and understanding of it, you are likely to end up incurring losses on your investment without any sizeable returns.

Suggested solution:?There are various vital aspects related to PPC that must be considered before you decide to leap into the adventurous world of Amazon advertisements. You should not only make yourself acquainted but rather attain mastery of over-optimization strategies so that you can alter your campaigns accordingly and achieve superior results. It is of utmost importance that you limit your advertising budgets in a manner that your margins and overall profits don’t suffer.

5. You are not efficient at inventory management

As an Amazon seller, you need to be extra careful always and make sure that your products never run out of stock. Understocking your product may lead to a significant dip in your product rankings. If ever such an instance happens, you will most probably lose potential sales of your product to your active competitors.

Suggested solution:?To avoid running out of stock, you should get into the habit of tracking and maintaining the inventory levels of your product frequently enough. You may make use of advanced inventory management software to stay aware and know exactly how many units you have maintained in your inventory and make sure that you restock and replenish it in good time to maintain your listings rank.

6. Your shipping strategies are overly priced

One major factor that would influence a customer’s decision to buy a product online, is shipping and delivery charges. As per a survey conducted, more than seventy-five percent of shoppers making their purchases online are reluctant to buy a product that is accompanied by high shipping fees. Ask me — as an online shopper I would love it if my orders are delivered swiftly and at no added shipping costs.

Suggested solution:?As an Amazon seller, you should make sure that you have calculated your margins, taking into account the shipping costs involved therein. For the optimum delivery rates possible, you should consider getting quotations from different logistics concerns to analyze which one suits your business the best. Or, you may like to opt for FBA as their shipping charges are considerably lower and they come with a great deal of added benefits.

“The successful man will profit from his mistakes and try again in a different way” —?Dale Carnegie

Snapshot

Hence we reach a conclusion that there are plenty of mistakes that you as an Amazon seller may end up committing. The most critical of these errors eventually are related to customer service, order fulfillment, and product listing. However, not to worry, and as mentioned in the above write-up, it is possible to get ahead of those and avoid making these selling mistakes altogether on Amazon.

“Many receive advice, only the wise profit from it”?— Harper Lee

What About You?

Now, coming to closing the blog, let me ask you — which of the above-listed mistakes are you committing? Which of these are you thereafter having a difficult time getting resolved? Was there anything in this blog to have taken you by surprise? How were you ever able to do away with any mistakes that you made in this business? The e-commerce community would love to hear about how you managed to crossover the hurdles and stumbles that you faced in the Amazon selling business. Kindly share your thoughts and experiences.

“Do not be embarrassed by your failures, learn from them and start again”?— Richard Branson

By:?Pawan Prabhat