Amazon has grown increasingly popular and useful nowadays. More and more entrepreneurs and small businesses turn to Amazon for a business opportunity. In fact, being an Amazon seller is one of the best work-from-home opportunities today.
Since Amazon is rapidly growing as an eCommerce platform, a lot of issues also arise. Amazon provides one of the best business opportunities but it also offers a lot of problems for existing and new Amazon sellers.
Let’s take a look at some of the top Amazon seller issues:
- Inventory Management
Whether you are a private label seller, distributor, or reseller, you still need to shell out cash for your inventory. Many Amazon sellers hire manufacturers from China to fulfill their inventory. Smaller businesses or individual sellers opt to buy in bulk. The challenge is to keep your inventory in stock to meet holiday demands and seasonal shopping peaks. You should be able to plan your inventory according to demand so you do not incur expensive expedited shipping and warehouse fees.
- Price Wars Due to Excessive Competition
Since buyers cannot physically test the products they want to buy, they would have to rely on three things when purchasing online: popularity, price, and product reviews.
People would always opt for established brands as opposed to the smaller brands. In addition, they also look at other people’s opinions and experiences regarding the product that they bought. They also want the best value for their money, so sometimes they may not opt for the cheaper ones. To most buyers, price equates to quality.
However, since there is too much competition for a single product, some Amazon sellers lower their prices just to sell their inventory. This causes a domino effect of cost cutting in manufacturing, low product quality, negative reviews, and leads to drop in sales.
- Product Reviews and Seller Feedback
Product reviews and Amazon seller feedback can either make or break you. As discussed in the previous blog, Amazon seller feedback and reviews are important. Product reviews address issues and opinions about the product, while feedback addresses issues such as shipping and customer service.
If an Amazon seller is shipping via FBA and Amazon has issues on shipping, this may have a negative effect on the seller.
- Customer Returns Policy
As an Amazon seller, FBA is one of the easiest ways to ship out your inventory. However, there will be instances that customers would return the products they ordered simply because they did not like it. The Amazon seller now has to shoulder the costs of the returns. Also, Amazon resells returned items as new. Most of the time, the returned items are already damaged or have a missing piece. This would then reflect on the seller who is carrying the brand.
What you need to do is to make sure your Amazon seller account is set to ship the returned items back to you. Meaning, Amazon cannot and should not re-package or re-sell any of your returned items. This may be additional cost to an Amazon seller, but it will prevent any negative customer experiences.
- Inconsistent Communication with Amazon
Most of the time an Amazon seller account may be suspended for no reason. The challenge is contacting Amazon seller support because more often than not, you will get different responses from different support representatives. Amazon has a problem with rule enforcement and customer service that needs to be addressed.
How to Address the Amazon Seller Issues
If you’re thinking how complicated it seems to be an Amazon seller, you share the sentiments with thousands of other sellers. However, it is still possible to thrive on Amazon. You just need to be diligent in monitoring your account and inventory.
Here are a few action plans:
- Optimize your listing — Optimizing your listing is not a one-time deal. Be updated with keyword trends. Thus, optimizing your listing regularly ensures that you stay on top of keyword searches and your listings are always relevant.
Use sponsored product ad campaign reports and see the keywords that are associated with your buyers’ behaviors. In optimizing your listing, you should also address previous questions or concerns that your customers had.
- Be familiar with Amazon’s policies — Make sure you read the news on your Amazon seller central account. Join Amazon seller forums and groups. You’ll be surprised how much you will learn from other sellers.
- Build your business on other platforms — It is best not to rely solely on Amazon. There are a number of eCommerce platforms that you can use. You can even build your own eCommerce shop on Shopify or WordPress.
- Plan for pricing and inventory management — If you have been selling on Amazon, you should be able to see the buying trends. You should already know when is the best time to replenish your stock in time for the holidays or shopping peaks such as Prime Day deals, Black Friday, and Christmas. You should also adjust your prices based on the volume of your inventory and not because of your competitor’s price. However, make sure that your products are not too expensive if the quality is the same.
- Partner with an exclusive reseller — If you’re wary of partnering with an exclusive reseller, work out a strict MAP policy to ensure that they stay within the pricing range. Having a third party reseller ensures that your inventory will always be available in the market even if you run out of stock. For more information on working with a third party reseller, read this blog.
Conclusion
Being an Amazon seller has its perks and caveats, however, this should not deter you from your business goals. All you need is a solid action plan and a fail-safe inventory management system.
If you need help with optimizing your listings, responding to customer reviews, and managing your inventory, let us know and we’d be glad to help you out.
“Establishing trust is better than any sales technique.”
— Mike Puglia, Chief Marketing Officer, Kaseya
2 Responses
I just realized that there is still a lot I need to learn. Thank you for sharing this!
Very useful information! Especially for Amazon sellers who are just starting out, like me. Now I have the foresight to do things accordingly. Thanks!