7 Mistakes New Amazon Sellers Make
Mistakes happen. Amazon sellers make many mistakes when they begin, and some mistakes can result in immediate suspensions if they’re not careful. In this article, we’ve gathered five common mistakes new sellers make on Amazon. If ignored, these errors can be costly at best or result in suspensions at worst. If you’re thinking of selling on Amazon, then keep the points we discuss in mind.
Upgrading to Professional Account
Recent Amazon policy changes have resulted in a review of any account upgrading to a Professional account. This action is supposed to curtail fake scam accounts on Amazon. The mistake new sellers make is that they don’t take into consideration how long the account review process can take. Depending on whether or not they have the documents, the review process can take weeks. Upgrading will mean that sales will stop until Amazon verifies the account.
If you’re thinking about selling on Amazon, then it may be worthwhile to upgrade to the Professional account immediately, especially if you’re already ordering inventory in the hundreds from Chinese manufacturers. You’ll only have to deal with this once. It’s far easier to downgrade than it is to interrupt your business just as sales are picking up. At $39.99 a month, the fee is negligible compared to the revenue lost through the suspension.
Incorrect Inventory Management
New sellers will inevitably make some mistakes with their inventory. Sometimes inventory counts are off, someone mistypes a number, or even a glitch on Amazon can lead to incorrect inventory counts. When this happens, new sellers often make the mistake of canceling the order. Canceled orders can count against performance metrics, and enough of these hits will lead to a suspension. If new sellers don’t have the volume of sales to mitigate the few errors, then their accounts are in jeopardy.
If this has happened to you, then you should think about drop shipping the order to the customer. You would order from another seller to ship to your customer. Drop shipping may cost you a bit more, but it’ll result in a happier customer and no ding to your metrics. Additionally, you won’t have to worry about the negative feedback that the customer can leave if you cancel the order.
If you’re private label, then you may not necessarily have the opportunity to drop ship. Should you attempt to do so, you’ll risk sending a counterfeit item to the customer unless you know about the seller’s source.
In fact, drop shipping items is a viable business model, but it’s difficult to do now unless you’re able to do a substantial volume, generally through software automation. For instances where you can’t fulfill the order (damaged product, can’t locate, or incorrect count), then drop shipping is an option that you should seriously consider in place of canceling the order.
Poor Customer Service
Amazon expects that you’ll respond to customer messages within 24 hours. Many new sellers believe that Amazon handles questions about policies. But that’s not necessarily true–while Amazon’s policies supersede merchant policies, Amazon still expects sellers to answer such questions. If it takes days before a response, customers are less likely to order, and if the messages are service related, then sellers are expected to respond quickly. Usually, that means 24 hours.
Some new sellers neglect customer service until it catches up with them. For instance, they’ll take their time responding to customer emails or A-to-Z claims. Or they’ll ask customers to go through so many obstacles before issuing a refund. This kind of service will likely result in negative feedback. Don’t ask customers to take pictures of damaged items or accuse customers of being liars.
Keep in mind that any A-to-Z claim that you ignore will go in favor of the customer, so make sure that you have someone monitoring email for customer service. Remember too that you should remain objective and professional with all your dealings with customers. Our article goes over some advice for dealing with difficult customers.
Incorrect Product Listing
Incorrect product listing is a common mistake amongst new sellers. They’ll list their products on listings that aren’t correct. For instance, new sellers may list an instructor’s edition of a book on a regular student edition listing. Then in their description, they’ll state that it’s an instructor’s edition. New sellers then believe that they’re okay because they noted that the book is an instructor’s edition, not a regular student edition. The same goes for international edition books as well.
While many customers won’t care and are happy to receive the instructor’s edition for the same price, other sellers may not be as forgiving. Listing a product that is slightly different in any way leaves you open to Item Not as Described (INAD) claims. What’s worse, savvy customers can order the book and request a refund for INAD. They may even get to keep the book. A lot of INAD claims against you will result in a suspension.
You should always list on the correct product detail page. If there’s a variation of any sort and no listing exists, then you should create a new one. A new listing requires a lot more work, and it may not be worthwhile if you only have one or two items. Almost everything that you can sell will have a listing in the catalog already, so be wary of having to create new ones. You may end up just cluttering Amazon’s catalog.
Fulfillment mistakes are easy to avoid. New sellers often ship their orders promptly, but then they forget to enter tracking numbers on Amazon. Even if you ship orders out and the customers receive them, you can still be open to Item Not Received (INR) claims if tracking numbers were not entered into Amazon. Consider purchasing shipping through Amazon to defend yourself against INR claims. Doing so will protect you against customers who like to claim INR.
In other instances, new sellers may find ways to save on shipping. Each order has a delivery window, and orders must arrive at the customer’s address within that window. If you ship late and choose the cheapest, slowest option, then orders may show up late, resulting in a performance metric hit.
Knowing your fees is crucial to earning money on Amazon. Fee structures can change from year to year, as they did for the media category in 2016. Sellers can sometimes fail to realize that FBA fees, referral fees, and shipping fees can lead to losses. In these instances, it’s best to ship the item out and increase the price. In particular, sellers new to FBA may find themselves paying higher fees than necessary due to incorrect product dimensions or packaging sizes. Oversized packages cost more, so if you can get your package or weight down, you’ll save money on fees.
Other fees can include storage fees, which are increased during the 4th quarter. Pay attention to Amazon’s fee structure. In the past two years, Amazon has given sellers free removals before Q4, so take advantage of that to get rid of unsold inventory and avoid long-term storage fees.
This seemingly small detail gets new sellers into a lot of trouble. Unless new sellers live in an area that doesn’t have a sales tax, then they’ll have to make sure to collect sales tax.
New sellers will only have to worry about taxes from customers in the same state. The option to collect sales tax exists on Amazon, and there’s a small fee associated when Amazon collects sales tax, known as the Sales Tax Collection fee. Read more about how SellerZen handles the Marketplace Facilitator Tax.
Failure to keep good records has caused new sellers thousands of dollars in unnecessary fees and penalties. It’s always good practice to keep statements, invoices, and other important financial documents in order for tax season.