Businesses that are based on Fulfilment by Amazon can often return a great income! Reports have suggested that the FBA program has seen continual increases over the years, returning a growth of 65% in 2014 alone.
While you strive to succeed, you would certainly have to work hard to achieve this. Realistically, you can't just send a pallet to Amazon and think that the job is as good as done.
There are so many businesses that fail within months or in some cases, even weeks after their launch because they do not know how to avoid common mistakes when selling on Fulfilment by Amazon. The worst Amazon FBA fails you can make are listed here below.
1. Underestimating Knowledge
Many people who want to become FBA sellers believe that they have little or nothing to do and that their business will prosper away. However, before making an Amazon delivery, one must understand that knowledge is indeed power.
You need to learn everything there is to know about restrictions, Amazon categories, certain fees, finding profitable niches, and so on - really, the list goes on and on. Essentially, you have to become an expert when it comes to Amazon FBA even before starting to work with it.
2. Failing To Take Calculated Risks
In order to take calculated risks, you have to be aware of everything that's going around in terms of Fulfilment by Amazon.
You have to understand the risks that each category of products comes with, as well as the risks associated with deliveries. For example, you wouldn't want a single truck to deliver just one or two of your pallets when you can rely on Amazon Lower than TruckLoad instead.
However, keep in mind that it is never recommended that you take calculated risks when the stakes are too high. If you are trying something new that also comes with a certain degree of risk, it is better if you settle for the things that have lower stakes.
3. Not Investing Money
When it comes to services and FBA, you have a lot of options available. However, one of the most common Amazon FBA mistakes is when sellers pass on a certain service simply because they think it is either too expensive or they might have a free or slightly cheaper alternative.
If you want your business to be successful, you mustn't be afraid to invest some of the money you earn into it. You should prepare to spend money on fees, services or tools that can help you increase profit and make more money through FBA.
Aim to start your business with the mindset that investing money will earn you more money in the long run. Remember, smart money makes more money.
4. Proper Data Analysis
This particular mistake is easily avoided. If you make purchases and plan to sell on Amazon by analysing only today's data (in terms of sales rank and cost), you will eventually end up with a full inventory that can prove quite difficult to sell.
Purchasing decisions should be made based on historical sales rank and pricing data. You must rely on trends as little as possible as they may die down in a day or two. Also, if you are at the beginning of your road, you should rely on the products that are known to be in high demand throughout the year.
5. A One-Man Job
Most sellers believe that they can do everything it takes to make their business successful on their own. Obviously, this is amongst the most common Amazon mistakes! Many aspects required to run an FBA business are, in fact, minimum wage jobs.
As your business evolves, you will not be able to fit every necessary role. You might want to start outsourcing your; Amazon back end tasks, preparing, packing and shipping, product repricing, the bulk of OA sourcing, RA sourcing and even your Amazon feedback managament.
You do have to work hard, but you have to think smart at the same time. Handle your FBA business in the most effective way possible and you will avoid the common Amazon mistakes when selling on Amazon altogether.
The Bottom Line
The above are just some of the basic and most common Amazon FBA mistakes that sellers make. Some may seem like rookie errors, we know, but if you don't want your business to crumble then you will pay close attention to the advice above and take it seriously.
Finally, you must know and take everything into account when you start selling on Amazon. Albeit, that is not a simple task, but with the right mindset and knowledge, it gets a lot easier.
Before you know it, you will be a pro at dodging those Amazon FBA fails and an expert at identifying the mistakes of selling on Amazon - hopefully, you won't make any Amazon FBA mistakes from here on out.
Good luck from everyone at PalletOnline! If you need any further support or advice, then please feel free to get in touch with us!