Two hundred billion dollars – this is how much Amazon third-party sellers made way back in 2020. No doubt about it, the e-commerce brand is the platform to use when you’ve decided to go into business as a retailer. But just because you build a store, it’s not a guarantee that you’d make tens of thousands of dollars (or riyals) in sales immediately.
When you become an Amazon seller, you’ll have access to resources that will allow you to build and optimize your store. The e-commerce brand has made it easier for would-be entrepreneurs to take a concept from paper to reality. Amazon has the resources and global reach to help you grow and improve your business.
However, certain decisions you make could become a barrier to that success. As a new seller, your excitement over an idea could get the better of you. You may not see that the mistakes you make today could affect your sales and the future of your business.
Get off to a good start as an Amazon seller and learn how to avoid these five common mistakes.
1. Passing up on product research.
What product do you want to sell? Does it have a market? More importantly, how’s the competition in that market?
The hottest selling items on Amazon can vary in different countries and different seasons. For example, August in Saudi Arabia sees a lot of sales for kids’ shoes and backpacks since school is in whereas the same month in the US sees a lot of sales for water tumblers and electronics since it’s still summer.
Knowing what sells at the moment and in what region will give you an idea if the product you have in mind has a market. If it has a market, find out if it’s also sustainable – that consumers would still be interested long after the popularity of the item has worn off.
Once you’ve figured out your market, the next step is to determine whether it’s saturated. Is there room for your product and can it compete with already established products? It can be difficult to go head-to-head with existing products when you’re just starting out.
You can still forge ahead even with the tough competition, but make sure you communicate your product’s unique selling point. If you work with the right social media influencer, you may just get an edge over the competition. Stanley (food container company) used social media influencer marketing, and its sales went from $74 million in 2019 to $750 million in 2023.
2. Using your product listing as just a product listing.
When you’re shopping online, you want to get all the information you need on a product. The dimensions, the materials, the color, the weight — all these details help you visualize if it’s the right product for your needs. Your buyers will be doing the same thing.
Although the product listing delivers basic information, it doesn’t have to do just that.
Your product listing is competing with thousands of other listings. Think of your listing as the salesperson, and they’re in a long line of thousands of other sales people from different brands. Which one is more attractive for the buyer?
If your product listing lacks appeal, it will get lost in a massive crowd of listings, and you’ll lose potential sales.
Apart from providing detailed listings, make an emotional connection with buyers by telling a story. How does it solve a consumer problem differently from the competition? Your product’s story should start with the positive impact it will have on a consumer’s life. From there, optimize your listing by:
- Using keywords relevant to your product
- Writing compelling titles to grab attention
- Adding care instructions and warranty to your description
- Improving searchability through back-end search terms
3. Using poor product images.
Relevant to the optimization of your product listing is the product image. Your product’s image tells shoppers whether it’s the right one they’re looking for, or to make that emotional connection, it’s the product they must have.
The goal here is to create a shopping experience online similar to shopping in a brick and mortar. How do you do it?
- Use a plain white background to highlight your product.
- Photograph the item from all angles.
- Make sure the product is well lit and clear.
- Show your product in use to highlight its features.
- Follow Amazon guidelines on size, format, and file name.
Product images sell, so it would be wise to invest in product photography.
4. Failing to have a pricing strategy.
The price of a product can be the deciding factor for some shoppers. If two brands have similar qualities, some buyers may go for the lower priced item. Other buyers will choose the brand they’ve been buying from even if the price is a bit higher than the competition.
You have several pricing strategies to choose from, beyond the usual cost-plus, competitive, and value-based pricing. The goal is to still make your sales target without sacrificing your profit margins and diminishing the value or branding of your products.
If you price too low, you could lose a percentage of your profits. If you price too high, you could end up with excess inventory and no sales.
Before putting the price on your product listing, consider what strategy would work best for your business and sales target. One way to ensure you make enough and still sell is to consider Amazon’s Automate Pricing, which allows you to continually adjust pricing to stay competitive. When you log into Seller Central Amazon SA, you’ll learn more about this feature that lets you grow your business.
5. Not having a fulfillment strategy.
Finally, fulfillment is a key aspect of your business because buyers must always have their orders on time. You’ve done everything up to this point to entice and convert your customers. Fulfillment is when you ensure they come back for more.
Consumers today want fast and affordable (if not the cheapest) shipping. According to The Future of Shoppers report, 48 percent of consumers want fast shipping and 43 percent want cheaper delivery. The expectation for shipping is even higher with beauty products; 20 percent of buyers of beauty products want their purchases to arrive within two hours, and 38 percent want their items to arrive within 24 hours.
If your business isn’t able to meet such expectations or overpromise on delivery, you could lose potential customers. Amazon’s Fulfillment by Amazon (FBA) could help you address this concern. Through FBA, you need not worry about packing, storing, and shipping your products to customers because the fulfillment center will handle all of it. Storage and fulfillment fees will apply, of course.
Amazon offers enormous opportunities for new sellers to earn better. Leverage what the e-commerce platform offers and avoid these common pitfalls to ensure the success of your online business.
