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Four Common Mistakes Amazon Sellers Make

There’s no such thing as a flawless delivery system in any form of retail. Even big box retailers can be plagued by factors seemingly beyond their control, ranging from bottlenecks in supply chain management to poor customer service. But sellers on Amazon have a larger disadvantage. As solo operators, they bear the brunt of complaints largely on their own. Complaints can’t be forwarded to the appropriate channels because sellers are their own channel.

Mistakes may be an inevitable part of eCommerce. But unlike physical retail, eCommerce presents an entirely new set of challenges that sellers can frequently avoid. These are challenges that aren’t the result of logistic errors, but begin well before your first sale. And they have as much to do with forecasting as they do with your own approach to management. You may not be able to control lags in your supply chain. But you can fine tune your operations from the start by keeping in mind some of the common mistakes both new and seasoned Amazon sellers make..

Mistake # 1: Your Niche

Your niche is your opportunity to establish yourself on Amazon. It can allow you to both distinguish yourself from competitors as well as fill an existing void. Unfortunately, niches present two major hurdles for new sellers: oversaturation and specialization.

It would only make sense to choose the most profitable niche on Amazon. Both electronics and home and kitchen accessories have historically been top sellers, and there’s no reason to assume that’s going to change. But the problem isn’t that top selling items are constantly changing by default. The problem is the competition you’re facing.

Customer demand is the driver of your success on Amazon. Choose a niche that’s too popular, and you’re going to have to work overtime to distinguish yourself from other sellers—frequently at a cost to your profit margin. Choose a niche that’s too narrow and you’re not likely to see any significant profit margin at all. There’s a happy medium between the two. When choosing a niche, take the time to review search frequency ranking results to uncover a product line that has a medium number of competitive sellers but still maintains a high level of customer engagement. Look for common complaints from customers and see what areas need attention. Success on Amazon means filling a gap; and if you can improve on existing seller flaws, you’re one step ahead of your competition.

Mistake # 2: Failing to Adhere to Amazon Seller Guidelines

How stringently enforced is Amazon seller protocol? Just last March, Amazon suspended over 3,900 accounts of US sellers amid fears of price gouging during the coronavirus pandemic. But hyper-inflated pricing isn’t the only cause for mass suspension. Each year, Amazon suspends thousands of third party sellers for reasons ranging from suspected duplicate accounts to blatant counterfeiting—the latter being such a pervasive issue that Amazon has recently partnered with federal agencies in an initiative designed to combat the import of fraudulent items entering the US border.

Admittedly, these are extreme examples. But violating Amazon’s seller policy doesn’t just result in suspension. It can get you banned from selling for life. In fact, you could easily find your account deactivated as a result of negative feedback and undelivered orders.And to make matters worse, many sellers rarely pay attention to changes in seller policy and code of conduct; changes which can occur without warning.

Amazon requires sellers hoping to reinstate their account to file an appeal through a written plan of action (POA) detailing the cause of the suspension as well as steps taken towards its resolution and prevention of future issues. But the process of filing a POA can be a long and laborious process, with minimal support from Amazon’s seller services. You can help keep your account healthy by regularly reviewing your seller code of conduct at least once per quarter and paying attention to any and all email updates. While the specifics of Amazon’s terms of service can be frequently vague, they’re in place to ensure your transparency—one of the most valuable assets you can have as an Amazon seller.

Mistake # 3: Ignoring the Competition

Recent estimates indicate that out of the 9.5 million third party sellers on Amazon, well under a third maintain active accounts. But does this indicate a high failure rate?

Not necessarily. Over 95,000 new sellers were added to Amazon Marketplace in 2020, with those numbers only being expected to rise. The US market for eCommerce may have jumped by close to 37 percent in the third quarter of 2020, but less than 10 percent of active Amazon sellers are able to achieve sales figures in excess of $100,000. Nor are those sellers newcomers. Many of them are seasoned digital commerce veterans who decided to put their feet back in the game.

It all goes back to mistake number one: your product niche. Higher demand means higher competition. You can try to compete with well established sellers in a top product category on Amazon; but you may find it’s an uphill battle. When reviewing your search frequency results, pay close attention to reviews. If your given niche averages more than approximately 100 reviews, you may want to examine your specialty more closely. Consider paring it down to a subsection which isn’t so highly populated. You’ll leave yourself with a much wider margin for inevitable errors than trying to compete with well established entities.

Mistake # 4 : Stagnation, Not Innovation

Your success on Amazon isn’t purely the result of consistent sales. Top sellers aren’t content to rest on the strength of annual growth alone. It’s your willingness to adapt to customer demands that serves to reinforce your reputation on Amazon. And it’s that same sense of adaptation and innovation which is driving the success of your competition.

Innovation extends to every facet of your business, not just your product line. Just how well do you understand the marketing solutions available to you as an Amazon seller? Are you ignoring key advertising solutions on Amazon which can nearly triple your conversions? Is your Amazon presence optimized for mobile (which sources estimate accounts for 47 percent of US retail online traffic) as well as traditional web delivery? Are you measuring up to Amazon’s performance metrics fully? Are you breaking a profit—or barely breaking even?

Innovation is never automatic. Neither is success on Amazon. Both take time, effort… and mistakes. A lot of mistakes. But in the end, it’s your willingness to take risks with your business that helps define you as a leading seller.

Just make certain you understand those risks first.


Color More Lines provides white glove, global account management of your eCommerce platforms so mission-driven companies can focus on new product development, branding and growth strategies. Find out more at Color More Lines.

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