Business Blunders: Mistakes to Avoid When Becoming an Amazon Seller

Business Blunders: Mistakes to Avoid When Becoming an Amazon Seller

Ecommerce businesses are booming. Amazon, the world’s largest online retailer, had a 2018 net revenue of $232.89 billion — and 50 percent of all sales on Amazon marketplaces came from third-party sellers. The number of sellers with products listed for sale on Amazon is approaching 2 million sellers — and just over 1 million of them have joined Amazon this year. That’s almost 3,000 new sellers each day! Today, you get to decide whether to be one of them.

After you decide to become an Amazon seller to propel your business forward and make a potentially sizeable income, you want to do your research and make sure you launch successfully. The numbers above are pretty intimidating — 3,000 new competitors each day would make any entrepreneur nervous. But there are some key steps you can take to differentiate yourself.

Tips for Selling on Amazon

Below are some key mistakes you want to avoid when you become an Amazon seller. In addition to the Amazon seller tips listed below, you’ll find plenty of helpful information and resources on Incfile’s Amazon Business page.

Sold by Amazon vs. Fulfilled by Amazon

To start with, you need to understand the difference between “Sold By Amazon” Sellers and Amazon Fulfilled By Amazon (FBA) Sellers. In the FBA arrangement, Amazon takes care of storing, shipping, customer service, and returns — and they charge for these services.

Going the “Sold by Amazon” route is less expensive, but you will have to take care of your own logistics, customer service and storage (which can be costly). As a result, nearly 80 percent of Amazon sellers use the “Fulfilled By Amazon” service for some or all of their products.

Find the Right Products and Buyers

The competition on Amazon is fierce, which means you have to find and sell the right products in order to make a profit. You have to understand your target buyer, do research on what they expect from buying this particular product and learn how you can exceed their expectations so they purchase from you again. You need to keep a constant eye on other sellers, checking out their product offerings and prices. And you will need to tweak your stock levels and selling prices so you rank properly.

Consider Price, Quantity, Speed, Quality, and Reviews

These five factors are critical to getting your Amazon business right. Avoid pricing too high or too low, which will scare off potential buyers or cause you to make less profit. Consider carefully as you buy merchandise for your online shop — you don’t want excess stock laying around, but you definitely don’t want to be unable to fulfill orders.

When it comes to speed, customers want things instantly — you need to make sure you are offering fast shipping. If you are FBA, that means setting up reliable and quick logistics and shipping operations. Remember that customers expect high-quality products even if they are inexpensive, and they’ll let everyone know if they’re dissatisfied. Reviews could make or break your online business — you need to garner enough positive reviews to gain the trust of potential buyers.

While those are our top tips for selling on Amazon, we’ve covered several facets of selling on Amazon on our blog. Check out the following articles for more tips and information:

If you still need to form your sales business entity, Incfile has a complete guide to everything you need to do. We can help get your LLC off the ground, or set up another entity specifically for your Amazon business. LLC formation does vary from state to state, but we’ve got you covered, wherever you are.

Lisa Crocco

Lisa Crocco

Lisa Crocco is a marketer for an international food manufacturer by day and a freelance writer/marketer for startups & small businesses by night. She's She's written for outlets like USAToday College, Career Contessa, Cloudpeeps, and Fairygodboss.
Lisa Crocco

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