The beginning of your journey on Amazon FBA can feel a lot like grasping around in a pitch black room. There’s no foolproof way to make your business successful, and everyone seems to have a different approach in some way. This leads to many common FBA mistakes. You shouldn’t be discouraged if you make mistakes as these provide a great learning lesson. However, you’re only going to benefit your business if you’re aware of some common missteps many sellers make. Take a look below for five common FBA business mistakes and how to avoid them.
#1 Failing to collect sales tax
Amazon sellers are expected to collect a sales tax in every state they have a nexus. A nexus is also described as a presence and can be triggered even if you’ve only temporarily operated in another state. For example, you may technically have a nexus in Georgia if you store items there at a fulfillment center or had employees conducting sales there.
You’ll have to register for a sales tax permit and file sales tax returns for every state you have a nexus in. It doesn’t matter where the product came from or how you sold it to them as long as you have a nexus. Failing to collect sales tax will result in a setback for your business as you’ll have to pay these fees out of pocket.
You can start setting up your tax collecting options using this guide created by Amazon. Avoid making any mistakes by researching this topic thoroughly. You don’t want to fat finger your seller-defined default product tax code or your state tax registration numbers, for example. And don’t forget that sales tax policies vary according to each state.
#2 Ignoring the Amazon terms of service
There are many reasons Amazon is one of the most successful companies in the world. One of them is customer loyalty. Amazon has become the go-to place for online shopping due to their fantastic track record with on-time deliveries, accurate product descriptions, and excellent customer service. They’ve managed to gain such a reputation by holding themselves and their sellers to an extremely tight set of rules found in their terms of service.
If you’ve never read the terms of service, stop everything and do so immediately. Amazon isn’t kidding around and has a rule for just about anything. You’ll find very specific guidelines concerning product descriptions, restricted items, inappropriate email and phone communications, and much more. Failing to abide by these rules could result in your account being suspended or even removed completely!
#3 Forgetting to track suppressed products
If you’re not paying close enough attention, it’s possible that you could have an item listed on Amazon that’s been suppressed for weeks or even months. Amazon will suppress a product listing for a variety of reasons, including incomplete product information, lack of images, lengthy titles, and inaccurate descriptions, among other things. A suppressed listing should be avoided at all costs as it guarantees that your product will draw zero revenue as long as it stays suppressed.
The good news here is that it’s not especially difficult to take your item off of the suppressed list. To do this, go to your Inventory tab and select “manage inventory.” You can find a list of all your suppressed items by clicking the “suppressed” tab. Each suppressed item will have a red exclamation point attached. You should be able to see what’s wrong with your item and edit accordingly. After you’ve saved your updates, the alert may remain on your item for 48 hours or more. We recommend contacting Amazon support center if you are having difficulty fixing the issue.
#4 Not taking customer feedback seriously
Reviews serve as a guide for both Amazon and its customers in deciding whether or not your product is worthy. For customers, there’s a far less chance they’ll buy something with a two-star review and nasty comments attached. Amazon also uses reviews to gauge your performance. If there are repeated complaints and negative reviews attached to your product, Amazon may take action and suspend your account.
To avoid this, take the time to read through every review you’ve received and look for any glaring issues. A common complaint should be addressed immediately. You should also set up a system where your buyers receive emails following a purchase asking them to rate the product. A lot of people will not take the time to leave a review even if they’re unhappy. Consider using the automatic messaging system Feedback Genius for this.
#5 Starting too big and too fast
Your first instinct when it comes to selling on Amazon may be to hit the ground running. We suggest you do the opposite.
This doesn’t mean you should kick back and crack open a cold one. When we talk about “starting too big,” we’re talking about the Amazon sellers who load up on inventory without enduring a test period or conducting any research. It’s not enough to just come up with a business model. You’ll also have to test it… a lot.
So don’t be afraid if you’re moving at a turtle’s pace the first few months – this is normal. Test the waters and get a sense of your competition before you decide to buy 15 flatscreens or send an excessive amount of inventory to your fulfillment center. This will take a lot of trial and error! FBA training courses are a great place to gain more insight and guidance for getting started.
Bonus tip: Advertise outside of Amazon
Amazon sellers are doing themselves a great disservice by not advertising their business in places other than Amazon. You can’t just assume that your customers will come looking for you – that’s never how it works. Advertising is crucial as your listings could be buried under a ton of other products thanks to Amazon’s search algorithm.
Customers will be more interested if they can link a face or a personality back to a product. This is why we suggest you start a video blog or written blog where you can share your Amazon journey with the rest of the world. Keep in mind that people will be more interested in your content if they can take something useful away from it. In addition to telling your story, try sharing some tips or success stories of your own that can help other aspiring Amazon sellers.
Avoid these mistakes and grow your FBA business
Congratulations, you’ve just taken the next step toward becoming a successful Amazon FBA seller. Continue on in your research and soak up as much knowledge as you can! To avoid even more common FBA business mistakes, we suggest taking a look at some of our other articles. If you haven’t already, read about the best products to sell on Amazon FBA and why they’re successful.