Selling on Amazon: Pitfalls to Avoid
With over 300 million shoppers, Amazon is an attractive marketplace for virtually any type of seller. More than 80% of total consumers bought something online, and the vast majority of them likely purchased something from Amazon. It might shock you to hear that there are over 100,000 sellers with over $100,000 in sales on Amazon, but there are many more that aren’t breaking even.
The sellers that don’t break through into operating a profitable business on Amazon usually get caught up in a handful of pitfalls. These pitfalls can eat into your profit margins or lead to your account getting suspended.
These 6 pitfalls on Amazon are very common, but they are also very avoidable, with some foresight and guidance.
1. Thinking About Collecting Sales Tax as an Afterthought
It is not uncommon for a merchant to suddenly stumble into a large unfunded liability that they have to pay because they did not collect state taxes during their sales process. As you can imagine, this is not a friendly surprise to your profit margins. Ultimately, you are responsible for remitting sales tax payments.
Amazon does offer merchants the service of collecting the appropriate amount of state tax on your order for you, for a small fee. The tax headache can be avoided by filling out the “Tax Settings” in the Seller Central portal before you start making sales. This allows you to focus on the core competencies of your business (i.e., making sales and marketing) without turning into a part-time accountant every time an order comes in.
2. Responding Too Slowly to Customer Inquiries
Although responding to your customer inquiries with urgency is an excellent way to convert interested visitors into customers, not responding to them in a timely fashion could end up getting your seller account suspended.
Amazon gives their sellers a 24-hour window to respond to customer inquiries, regardless of the time, day, or holiday. Missing too many responses within 24 hours could get you negative points, and too many negative points can lead to an account suspension.
This can all be avoided, either by setting daily alerts to respond to customer inquiries or using a third-party software that automates the process of responding to your customers.
3. Failing to Get Customer Feedback
All sellers are expected to get a certain amount of feedback from customers. Amazon’s Seller Performance and Product Quality department tracks to see both the quality of customer feedback (stars out of 5) and the quantity of feedback (on average, 2-5% of all sales are expected to receive some sort of feedback.)
Each seller is encouraged to request for feedback, and most high-performing sellers usually have an excellent system in place to not only get customers to give feedback but also address and rectify negative feedback.
If you’re a new seller on Amazon, you can avoid many of the problems encountered with the trial and error by using tools such as Feedback Five and Feedback Genius to automate the entire process. Be sure to address negative feedback as it comes in since it could potentially deter new clients from shopping with you.
4. Manipulating Feedback
It’s one thing to rectify the experience of an unhappy customer, but another thing to manipulate feedback to make it seem like your product is better than it is. Your seller feedback rating is incredibly important, but, if it looks artificially bloated, it could deter new customers from doing business with you.
We’ve all seen product pages online (not necessarily limited to Amazon) where the 5-star feedback just doesn’t seem right. These types of pages chip away at the integrity of Amazon as a shopping platform and can end up getting your account suspended.
Your best bet to avoid this pitfall, yet continue to receive accurate reviews, is to solicit feedback and include review page links but don’t intervene unless it is a situation that needs to be rectified.
The easy route might be to incentivize positive feedback and push customers to delete negative reviews, but it’s not sustainable. In order to have a long and happy experience selling on Amazon, you can best address consistently negative feedback by fixing the issues in your business that are making customers unhappy.
5. Duplicating Product Details
You may have noticed that you’re not the only one on Amazon selling a particular product. This is very hard to avoid, especially when dealing with extremely popular items. Some sellers try to cut corners with their popular products by copy and pasting another seller’s product information.
This strategy might save you a few minutes and a few bucks if you chose to hire a product copywriter, but it can get your account suspended, all the same. Creating your own product details allows you to take charge of your on-page SEO strategy, as opposed to hoping the guy you’re copying from got it right.
There’s nothing wrong with benchmarking your product information against that of other sellers who have a similar item, but outright copying their pages could cost you the hours of work behind setting up your seller account.
6. Committing Too Many Fulfilment Errors
Everybody makes mistakes.
You missed the shipping deadline on an order, forgot to provide shipping tracking information, or sold an item that was out of stock. In the world of immediate gratification on an extremely customer-friendly platform such as Amazon, you are likely going to get your fair share of flak in unsatisfied customer reviews, but it’s not the end of the world.
If your account gets too many fulfillment errors, it could either get suspended or ward off any new customers due to the low customer feedback.
If you’re a new seller on Amazon, you could nip any possibility of fulfillment errors in the bud if you act early enough. You can avoid this pitfall by developing an ironclad fulfillment process and running your first 15 orders through it.
Aim to break each step of the way into its most simple components and remove as much room for human error from the equation. The alternative is to move all of your inventory to Amazon’s Fulfillment to make sure the process is perfect every step of the way.
Your Amazon strategy should have an offense and a defense to carefully avoid pitfalls many other shoppers unknowingly plummet into. You can protect yourself on the defensive end by having a strategy to collect taxes, avoid fulfillment errors, and avoid getting suspended over product details. You can avoid future pitfalls by actively encouraging interviews and responding to your customer inquiries.
Once you’ve avoided the tricky pitfalls, you can start executing growth strategies such as optimizing your pages to pop up in the first pages of results.
About the author:
Ronald Dod is a partner and CEO of Visiture, LLC. After founding Grey Umbrella Marketing, an internet marketing agency which focuses on Search Engine Optimization for eCommerce businesses, he merged with Visiture to create a full service search marketing offering for eCommerce businesses. His passion is helping eCommerce business owners and marketing professionals navigate the search marketing landscape and use data to make more effective decisions to drive new traffic and conversions. He holds a Masters in the Science of Marketing from Florida State University and is certified in Google Adwords & Analytics.