Prepare for Amazon FBA by learning all you can. Start with the 16 most common FBA mistakes I’ve seen in my years selling. Anticipate mistakes and be ready to fix them.
1. You’re Not Following the Steps to a Successful Amazon Business
If you aren’t doing things in order, you’re not setting up your Amazon FBA business for success.
Research Amazon FBA (and other business models).
Choose a product backed by facts.
Optimize the product and its listing.
Research your product’s performance.
Plan your next move.
As a beginner, you might be at any of these stages. Or you might scramble through multiple stages at once. Time to strategize.
2. You Didn’t Read the Rules… Or You Broke Them Anyway
Read Amazon’s Terms of Service. Read them again. Revisit them later and check for updates.
If you don’t understand the Terms of Service, you might violate one of their rules. They will catch you. Then, Amazon may shut down your account. You will lose access to your inventory. You’ll pay the FBA storage fees for inventory you can’t access. Your store will fall in rankings.
Go through the Terms and note actions you might do. Make notes on conduct that they do not allow. Getting your account suspended is costly.
3. You’re Putting Too Much Stock in Gurus
There’s no overnight success with Amazon FBA. Anyone claiming to have a miracle product or strategy doesn’t have one. What they do have is a product they want you to buy.While you should research Amazon FBA, don't buy too many of these spammy online courses. If you want some quality courses, check out our top FBA courses list. But above all, do your due diligence. Look for coaches that are actually building their own FBA business today. Too often we find courses taught by coaches that had success years ago, but the problem is... what works in FBA changes every year as Amazon gets more competitive.
4. Your Product’s Quality is Subpar
You chose a global supplier that delivered terrible products. Now, you’re out hundreds of dollars in overcharges and other costs.
Sometimes suppliers are shady. They might just pocket your deposit and deliver nothing. Before choosing a supplier, check their performance history here.
Always order a small batch of test products. Also, order your competitor’s products. Compare the quality- and do better.
To consistently get better quality & prices, reach out to more suppliers than most people. Instead of contacting 2-3 suppliers, contact 10+ and you may also look into US suppliers.
5. You Love Your Product Too Much
Some gurus swear by this tactic. They encourage you to pick a product you believe in. This will make you enjoy your business and achieve greater success.
Yes, this can help. But ultimately, it can hurt. Loving your product too much might blind you to necessary changes.
Seasonal products, like holiday items, are a great example. These products lead to irregular income. Your sales will spike as the season comes around. Then they will drop to almost nothing in the warmer months. Choose products that are more consistent.
If the product is not doing well, it's important to know when to quit and try a different niche.
6. You Didn’t Research the Competition
With 1.9 million active sellers on Amazon, you don’t want to get lost in the shuffle.
- Begin by finding out the number of competitors in your space. If there are too many, you won’t compete.
- Avoid a product that has no traffic at all. This means there’s no demand. Don’t choose a product that has a ton, either. You won’t be able to compete. Find the middle ground. Don’t be afraid to change niches.
- When you find a product with the right amount of competitors, review their listings. Compare their prices to yours, and try to improve your price if you can.
- Use JungleScout to predict Amazon’s PPC cost on products. The higher it is, the more competition.
- Some markets have barriers, too. You need to research gated categories. Recognize that you might need to put in extra effort if you choose a product from the list. This can include documentation, invoicing, and more. All this, on top of beating out competitors, might be too much for you.
7. You’re Copying Successful Sellers
Another controversial problem: Don’t copy the big guys. I’ve taken many Amazon FBA courses, and some gurus suggest taking the best ideas and copying them for your own gain.
This worked in the past. But in 2022 and beyond, it’s a waste of time. Instead of copying, sell something better. Read negative comments and make the product better by solving those issues. The big guys may lack that extra attention to detail. Bring something new to the table.
Ingenuity will always give you a competitive advantage.
8. Your Sales Data is Not Accurate… Or You’re Not Even Considering Data
You can’t see Amazon’s sales data, but you can use tools. These tools estimate how well a product is doing on Amazon.
Here is the effectiveness of some of these tools.
I personally like Viral Launch the best. I have a whole Amazon FBA Product Research Guide on it.
9. You Have Too Much Inventory
Playing the inventory game is a slippery slope. You don’t want to have too little inventory and run out of stock if your product is a hit. But, you also don’t want too much.
Sitting inventory chews away at your profits. (Long-term storage fees on Amazon are $6.90/ cubic foot of product, or $0.15/unit, whichever is greater.) The longer your inventory sits, the more money you lose. Instead of using your cash to advertise and grow, it will sit with your untouched inventory.
Educate yourself on the game. Learn how to look at the data and determine your next move. If you don’t understand it, hire someone who does. It will be worth it.Pro Tip: Every time you order more inventory, improve your product. Add color options, stronger clasps, etc. With each upgrade, the price and quality can increase.
10. Your Product Cost is Too Low
You might choose an extremely low-cost product and hike up its price to maximize your profit margin. However, if it’s cheap, it won’t be good quality.
Choose no product below $10-$15. Price it at $30-$45. Then, your product will be of higher quality. Your business will have room to grow as you improve the product.
11. You Bought the Wrong Barcodes
Amazon uses barcodes to pinpoint products. Without it, Amazon can’t send your product to the right customer.
Products that need an Amazon barcode include:
Products that don’t already have an approved, scannable barcode
Restricted and dangerous products
Child and infant products
12. You Aren’t Optimizing Your Listings
Turn your individual product listings into showstoppers. Listings serve as both an advertisement and a storefront for your product. To optimize your listing, include:
- Expert product photographs
- Eye-catching titles
- Features and benefits
- Detailed, key-word driven descriptions
- Sales copy
- Competitive pricing
Learn how to write sales copy and research keywords. Once your listing is up, continue to optimize it with better copy and updated pictures.
Invest in getting actual photographs. When sellers cut corners on the photos, it can hurt conversions and overall success. If you can have photos of the product with people actually using it, this has been shown to improve conversions. Also lifestyle photos, where you can show scenes like your product on a beach that gives people more positive emotions, also help.Pro Tip: Optimize your product listings before your storefront page. After all, customers will come to your product first before researching your brand.
13. You Didn’t Get Enough Reviews
This is where breaking the rules in Amazon’s Terms of Service might tempt you.
Right now, you can only ask customers once for an honest review. You cannot ask for a positive one.Ensure you’re delivering a quality product paired with excellent customer service. 60% of customers prefer brands with great customer service over those with low prices. Amazon expects response to customer complaints within 24 hours. You can eventually hire a VA to handle this.
Most sellers pick niches where the competition has around 50-100 reviews. It's still a battle when you have a brand new listing with zero reviews. This is where Amazon PPC campaigns come in. To get sales with paid ads so that you can get reviews.
14. You’re Not Using Amazon PPC
Amazon PPC generates the sponsored ads at the top of your searches. Buy paying Amazon, your brand new product is on page 1. Yes, the PPC fees will cut into your profit margin, sometimes you might simply break even or lose money. But this will all pay off when you get reviews that help your actual listing rank organically.
Make sure you have a strategy going into advertising. It may be simple, like putting in a few dollars a day. Or, you might do something more intense, like developing a keyword-driven ad group for your product, and running a campaign.Pro Tip: Run only one ad group per campaign. You will see better results. Run advertising reports for your product. Conduct A/B testing to determine what is going well.
15. You’re Not Treating Amazon as a Search Engine
74% of consumers begin a product search on Amazon. So, consider it a search engine, not a store.
Learn how to do SEO keyword research and use the right keywords to rank organically. Understand what target terms will work best with your product. Create search phrases from these target terms.
Embed these keywords both on the front end and back end of your listings. And, include them in your advertising.
Analyze the competition and note the different keywords they're using in the product title.
2 dominant ranking factors are reviews and conversions. Conversions meaning how many % people land on your product page and actually buy your product.
16. You didn't reinvest back into the business
People get the false sense of security just after getting 1 winning product. Not realizing that competitors can come in at anytime and take you our of business. Amazon FBA is very competitive. Even if you find success with 1 product, the question is for how long?
In my article of why most FBA sellers fail, I show a story of a seller that went on vacation too soon with his FBA profits and failed to diversify. A competitor took his 1 product out, and he now had zero income.
Its recommended by many top sellers to keep reinvesting back into Amazon FBA and launch new products for at least 2 years or at least when your net profit is exceeding six figures before you think about taking profits out from the business.
What is Wrong with Amazon FBA?
Trouble with inventory, tremendous competition, and Amazon’s control over your business are just some of the biggest issues with Amazon FBA. Poor customer service and 15% FBA fees also make it tough.
Also, every product on Amazon FBA is eligible for Prime Shipping- but the seller pays the difference. (That’s you!)
It’s also often touted as an “easy way to make money online”. As you can see from the common Amazon FBA mistakes above, this business model has plenty of challenges. It takes business know-how, trial and error, and the time and understanding to create and monitor ads. It also takes a big initial investment- usually between $10k and $15k.
Are you willing to risk this investment on something with so many variables?
Does Amazon FBA Really Work?
68% of Amazon sellers have profit margins above 10%.
36% have margins over 20%.
What is Amazon FBA success rate? According to Jungle Scout, it's a decent 15% make $6,000 to $25,000 per month in net profit. And 5% made more than $25K per month.
Amazon FBA works as long as you can avoid these common mistakes. And be persistent with it, even when you make mistakes or you have a product launch that doesn't succeed. Most successful sellers admit they had 2-3 product launch failures before they succeeded. But for those that stick with the Amazon FBA business for 2 years or more. They all eventually seem to find success.
Local lead generation is another dominant business model that we believe is one of the best opportunity to make actual income online, perhaps less saturated than Amazon. For some people, it may be a better fit than Amazon FBA.