Top mistakes made when starting an Amazon business

In this blog post I am going to go through top 5 mistakes new sellers make when starting e-commerce business on Amazon. Now, these mistakes are costly, so to avoid these mistakes take your time and read through this article.

Mistake #1

Market research shows that the most common mistake is that newcomers to Amazon are selling items that have less than $10 profit margin per sale. When you are storing items at your house or warehouse and sending them to customers, you need to make sure that you are making at least $10 per sale. The reason is that it takes in average the same amount of time to fulfill an order to make you $5 per sale as it would to fulfill an order that would make you $20 per sale. So the same amount of time invested will yield you a lot more profit if you are driving sales with higher margins, thus you are not losing time and opportunity cost. The only exception is using Amazon FBA program, when you send items to Amazon warehousethat will cover all the logistics and customer service for you for a small fee. With Amazon FBA you can afford to invest your time in selling items with much less than $10 profit, as you can send multiple of those to Amazon warehouse and let them worry about fulfilling your individual orders for you.

Mistake #2

People fail to engage in any price competition. Of course engaging in every price competition is a bad thing: you lower your price, then competitor lowers price, and in the end almost always both lose. However, when you are just starting out lowest price will bring you more sales, especially when you don’t have any feedback yet. Now if you engage in price competition occasionally and undercut your competitors on listing they aren’t watching, then you can get away with the price difference, you can have the lowest cost item and can be making extra sales. The way to find these listing, that your competitor is not monitoring that often, is look at the items that are not sold that often (say 2-3 units per month). You competitor will pay a lot less attention to these listings.

Mistake #3

Thinking that if you have very little feedback you can’t compete with more experienced sellers. Yes, feedback shows your credibility, but there are other ways to establish your credibility without having tons of feedback. One really great way to establish credibility as a new seller is to turn yourself into a business and a brand. And a really great way to create that illusion is to get a logo for your business. You can easily get a nice logofrom fiverr.com for a very reasonable price. Plus, if you have a very well written listing, that is written better than at your competitors, you can take sales away from them by making your items look more credible. Be creative, establish yourself as a brand, make up your guidelines and policies,create yourself a website. This all adds to credibility and will yield you more sales.

Mistake #4

Sellers seldom contact each of their buyers after the sale to ask them to leave any feedback. Amazon lets you contact each buyer after they purchased an item from you, why not take such an great opportunity? You should contact each customer and ask them to leave positive review. If you ask people to leave a review they are much more likely to do so. Reviews are not everything, but they are a big part of growing your business on Amazon. If you are truly serious about making money on Amazon, they you need to be fighting for every single review you can get.

Mistake #5

Sellers do not sell their own items, they are only selling whatever is already listed on Amazon. Of course there is nothing wrong with selling items already listed on Amazon. However, you shouldn’t be afraid to put new items out there as well. There is certain type of items, when customer doesn’t really care about what type of brand it is, they just want the item. You can buy items really cheaply in China, rebrand them, and ship them toAmazon FBA and sell them for huge profits. Don’t be stuck selling items that are already present on Amazon, don’t be afraid to put your own listings out.

I am sure that this article just saved you thousands of dollars! If you are serious about making money on Amazon, be sure to try AZ Opportunity Gizmo, our ultimate amazon research tool, as well as AZ Mobile, a handy FBA fee calculator, that will save you even more money and help you succeed in Amazon jungle.