These are the five biggest and most common mistakes made by Amazon FBA (and how to avoid them in advance).
Mistakes can happen – but this is how you avoid them
No master has fallen from the sky yet. Especially as a self-employed person and entrepreneur, you have to learn how to deal with mistakes. And keep improving and learning. However, some Amazon FBA mistakes are quite expensive and it takes a lot of money to fix them.
So that the 5 biggest mistakes at Amazon FBA don’t happen to you. And you can save a lot of money, in this article you will learn how to avoid mistakes in advance.
This not only saves you money but also nerves. And you have time to concentrate on the essentials. It is normal for everyone who is self-employed to make mistakes. However, Amazon FBA sellers should avoid the following 5 at all costs. Because setbacks can hit you hard, especially at the beginning. If you made one of the 5 mistakes, try to correct it and do better next time.
1. Make product selection based on the wrong criteria
When choosing a product, you should, in addition to your own interest, also proceed analytically. You should take a close look at the numbers, data, and facts about the niche.
Before you decide on a product, you have to know the market figures. The following factors are important to know. The market depth, the seasonality, and the purchase-sale price. All 3 factors are discussed in detail below.
Read More Amazon Choice vs Best Seller – What is the difference? How to Earn Badges & More
Market depth is the most important thing to consider before entering a niche. This Amazon FBA mistake can cost you a lot of money and time. There is an exclusion criterion if you should never enter a niche. Namely when there is no or too little market depth. This is proof that the product is not in demand on Amazon. And where there is no demand, there is no buying either.
Then there is the other extreme, namely an incredibly high market depth and therefore a very high demand. You should rather start in such niches if you have experience with Amazon FBA or a lot of capital for high order quantities, the launch, and advertising.
Otherwise, you should start in niches where there is moderate demand. Moderate means that the top sellers make up to 20-30 sales a day. You can easily find out how many sales the competition is making using the BSR. You can also track it with tools, but they all cost. In the beginning, it’s enough to work with the BSRs, you don’t need a tool for that.
Jungle Scout has a free version that estimates what BSR means and how much sales in which category This is a great way to see how many sales your potential competition is making each month.
A big mistake with Amazon FBA is not considering the seasonality of a product. Firstly, this massively falsifies product research. Depends on when you research. And you get a wrong estimate of the sales figures.
Depending on whether the product is in season or not. Products are often seasonal so you would not think so at first glance. That’s why you should check the product for it before you jump into a niche. You can do this for free via Google Trends.
Purchase prices/sales price
In order to be able to calculate the costs exactly, you need a reference point for the purchase price. Also to see if the desired selling price is sufficient to source the product. You have to include that in your calculation right away. You need an indication of how much your product will cost in retail. Only then can you concentrate on developing unique selling points.
2. Not enough USPs and unique selling points
Another big Amazon FBA mistake, in addition to the little analytical product selection, is that unique selling points are missing. When developing a product, you should always ask yourself the following question:
Why should a customer on Amazon buy exactly my product? What makes my product special compared to the competition?
Amazon is now quite overflowing with products. You should therefore really make an effort to bring something to the market that not every seller has. The more unique selling points your product has, the more likely it is that customers will buy it. So really invest enough time in product development. Don’t make the Amazon FBA mistake like many newcomers and launch the next 0815 standard China product. This will not bring you any profit in the long term.
Are you already an active seller on Amazon or about to launch your first product? Then save yourself time and nerves with our listing service!
3. Calculate Margin and ROI incorrectly or not calculate at all
Sellers often start with a product purely based on gut feeling. However, this is wrong in self-employment and entrepreneurship. You always have to know your numbers and keep an eye on them.
Before you start with a product, you have to calculate it completely. Because of this, you know what your ROI (Return on Investment) and your margin are. Be honest and include returns and storage costs in your margin.
Your ROI should be at least +100%. That means you get back the same amount of money you invested in the product plus 100% of the value. With this you can, roughly speaking, reorder the product and also start a new product with the 100% plus that you have made. This is very important for growing your Amazon FBA business.
In addition to the non-existent margin calculation, many Amazon FBA sellers make the mistake of not keeping an eye on their company’s cash flow. Amazon FBA is very capital intensive.
That’s why you have to keep a close eye on your expenses and income. Tip: Keep the fixed costs as low as possible. Don’t buy useless tools in the beginning that you don’t really need.
4. Poor and underoptimized product photos
Another Amazon FBA mistake many sellers make is bad product photos. You see it all the time on Amazon. Many sellers use under-optimized cover photos and listing images.
This mistake can cost you dearly. First, you’ll get far fewer clicks on your listing if you have bad images. Second, your conversion rate is low.
If you can’t take good product pictures yourself, we really encourage you to have the pictures taken professionally. Take a look at our picture service. We work with a professional product photographer. First, we create a data-based image selection for your product.
This briefing is then forwarded to the product photographer. And she then creates 7 highly professional images for your product.
In this way, you maximize your conversion rate, increase your sales, and thus your profit. Make this Amazon FBA mistake, but start right away with great product photos.
5. Poor Product Launch on Amazon
The last of the 5 biggest mistakes Amazon FBA sellers make is a poor and inadequate product launch. With many sellers, you can see that they simply put the product on Amazon and then wait and see what happens.
Or that they want to save money and therefore don’t launch the product properly. But that’s exactly where you save at the wrong end. A product launch costs a lot of money. This money should already be taken into account in the calculation so that there are no nasty surprises.
However, the money for the product launch is not thrown out the window. But a good investment in the product. Because the more visibility the product has, the more often it will sell in the future, in the long term.
Amazon FBA Mistakes Summary
In our opinion, there is only one solution for us as an Amazon retailer. You can never cover all factors 100% perfectly. Especially at the beginning, you have a thousand other thoughts in your head. Start and do everything step by step. Do not necessarily look for perfection, but work on everything as well as possible.
This blog article is intended to help you in the best possible way to avoid the biggest Amazon FBA mistakes.
FAQ – Frequently asked questions about Amazon FBA mistakes
What are the biggest Amazon FBA mistakes that can happen to me as a beginner?
The biggest mistakes are that too little is calculated and calculated. Amazon FBA is a cash flow business. That’s why you always have to keep an eye on the numbers. Every business needs good calculations, like margin calculations and cash flow calculations.
How can I avoid Amazon FBA mistakes?
You can avoid many mistakes by informing yourself about the topic before each step. You should always acquire good solid knowledge. And then immediately put what you have learned into practice. This is how you avoid most of the big mistakes.