There is no shortage of articles to give you advice on what to do as an Amazon seller. In this article, we want to do something different by instead showing you what NOT to do as an Amazon individual seller. For each golden opportunity selling on Amazon, there is also a pitfall waiting for the unwitting seller to fall in to.
If you are an individual seller on Amazon, any mistake you make may be more pronounced. Especially without the support structures in place that a big brand does. That makes navigating your way around the various obstacles even more important.
Underestimate Selling on Amazon
Yes, yes, we know. The internet is brimming with success stories of those who made it big selling on Amazon. Even we believe that it can be a fantastic opportunity to take advantage of and lead to great success. However, it’s always important to take a step back and view things in perspective.
Making a huge success of any type of business is inherently very difficult. If it wasn’t, all of us would be rich, retired, and sailing around the world in our million dollar yachts. Even most top Amazon sellers only made it big after trying a few different things or by striking a bit of luck along the way. Even then, they had to have the guts and vision to take maximum advantage of it.
It just so happens that Amazon may be an easier route that’s filled with fewer obstacles and initial risk than most other real-world ventures. If you know what to do, then tackle it the right away. Another reason why we believe in Amazon, Amazon FBA in particular, it poses a lower barrier of entry to new sellers. It eliminates the need for a lot of overhead and physical investments, allowing you to get started faster and without as much upfront expenses.
As with most things in life, you get out what you put in. The same can be said for being an Amazon individual seller. Most people had to work very hard in the beginning in order to reap the benefits later. With the luxury of sitting back while their Amazon business seems to make money for them.
Becoming Complacent after Initial Success
We’ve seen this one all too often. Too many promising individual sellers on Amazon have been sunk after being lulled into a sense of complacency by a decent amount of success. Along with the promise of other Amazon success stories.
If you follow popular Amazon seller blogs like MyWifeQuitHerJob, The Selling Family, etc., you’ll come across a common theme. After achieving some minor success, they immediately shrewdly reinvested their money into their business, branching into new products, changing direction or improving their product/brand.
As a result, they slowly built on each success with a successive one. Correspondingly, they built a solid portfolio to keep things consistently ticking over while protecting them against loss.
Your first, second or even third idea is rarely enough to catapult you into a life of luxury from passive income. You need to make sure your foundations are solid first.
Also, remember that we are living in the age of the internet where everything seems to be moving at breakneck speed. To rise above the ebb and flow of success, you need to always be on your guard; ready to jump at any opportunity that presents itself. Stay on top of trends to anticipate market movements and whether what you are selling now will sell tomorrow. If not, switch it up, reinvest, adapt, overcome.
Compete Directly with Big Brands or Amazon
While you can’t really say anyone has a monopoly on the Amazon marketplace, competing with big brands as an individual seller is more often than not like trying to swim upstream in a waterfall. You might fight so hard and put so much in. Only to finally fall straight down and get swept away.
Big consumer brands will always have the upper hand over someone that has just started selling on Amazon. Because of how Amazon rates sellers and rewards consistency and history with higher search rankings, these brands are already one step ahead of the rest. They have the resources, staff, and business processes in place to perform highly according to Amazon’s metrics.
As an individual seller, you don’t have the guaranteed customer base, mountains of reserve capital, and stability to sit on your haunches and hope things pan out in the long run. You also aren’t as immune to risk as other big brands selling on Amazon like Nike, Canon, etc.
Find the niche
That’s why the best approach is to find a niche that’s desperate for someone to come along and shake it up or fulfill the burgeoning demand. One great example we like to point to is Tech Armor. Although it might seem like the mobile market is already flooded, they identified a gap.
It just so happens that most protective gear for your phone was either overpriced or seriously lacking in quality. They created Tech Armor to fill that gap. Thus, they didn’t compete directly with big brands like Samsung, Body Glove, etc. Additionally, they distinguished themselves from cheap manufacturers too.
A big threat that has reared its head in some niches is Amazon itself. Amazon has started to sell products under their own name. For now, it’s mostly restricted to their line of e-book readers and certain office supplies. This is one area in which you’ll have to concede defeat as it’s unlikely Amazon will let anyone outdo them on their own platform.
Ignore Your Competitors
Probably one of the most overlooked aspects of selling on Amazon by beginners is researching your competitors. It doesn’t matter whether you are selling online or in a brick and mortar store. Even if it’s on Amazon or eBay. Without knowledge of your competitors, you are surely doomed to fail. Especially considering that most of them will be closely studying you and each other.
Just take a moment and consider how important the answers to the following questions could be for your business:
- are your competitors selling?
- prices are they asking?
- changes did they make recently?
- is working for them vs. what isn’t?
Once you can answer some, or all, of these questions you can answer the most important one of them all:
“How can I get ahead of the pack?”
It’s easier than you think
A huge advantage of Amazon is that all this information is readily available (if you know where and how to find it). Everything is hosted online on the internet, just waiting for someone to dig it up.
If you were expecting a James Bond mission, we are sorry to disappoint. All you need is a few simple tools:
These tools are extremely easy to use and usually require little more than a browser extension. You can then search for competitor products online or let them do it for you. Depending on which tool you use, they will show you vital information about your competitors’ products like their current prices, price changes, and keywords used. To be a successful Amazon individual seller, don’t get blindsided by something you could know ahead of time.
Not upgrading to a “Professional” seller account
If you currently have an “Individual” selling account on Amazon and have ambitions to expand your business, you might want to consider upgrading to a “Professional” account. The first reason you might want to upgrade is if you sell more than 40 items a month. On an “Individual” selling plan, you are charged $1 per sale. However, a “Professional” seller account costs a flat $40 per month which becomes more economical if you are going to sell more than 40 items.
There are a number of other benefits associated with the Professional account:
- Eligibility for the Buy Box even if you aren’t using FBA
- Set your own shipping rates for non-BMVD (books, music, videos, DVDs) products
- Manage inventory, orders, reports, and product listings in bulk through spreadsheets
- Create your own promotions or gifts
- The privilege to apply to sell in restricted categories
- Calculate U.S. sales taxes on your orders
- You are allowed to use 3rd party tools like Scoutify
- Create and manage multiple user accounts under one Amazon account
As you can see, there are a few super handy features that are invaluable if you plan to really grow your Amazon business. The most beneficial ones are the ability to set your own shipping rates, create promotions and gifts as well as the ability to use 3rd party tools. Comparatively, the user account management is also useful once you consider hiring other employees.
An individual seller account is fine for the beginning stages and when you are testing the Amazon waters, so to speak. However, we highly recommend upgrading to the “Professional” account once you make up your mind to pursue it further.
Not sure what to do next?
The last thing that this article is meant to do is discourage you from pursuing your dream of financial freedom through Amazon FBA. In fact, we hope that you picked up on the advice sprinkled throughout the article to make a success of your venture.
For more information related to selling on Amazon, head over to our blog, where you can learn How to be a Successful Amazon Entrepreneur, What is an Amazon FBA Business? And What Does it Take to Start One, and much more.
Go even further!
If you feel like you need even more help before jumping into the world of Amazon FBA, head over to our events page and take a look at our free Amazon FBA Workshop. We share how you can start your own Amazon store with no product, no inventory, no tech know-how, and without having to ship anything yourself. Hope to see you there!