Despite constant reminders of the ease of success when private labeling and selling on Amazon, failure and struggles are quite common. Potential pitfalls are something you should be aware of and strategies around them should help mitigate the risks of failure. Being aware of what potentially can go wrong and knowing how we addressed it can help you from making similar mistakes.
Here are a ten points of failures we’ve personally experienced when selling on Amazon and what we did to address it.
1) Choosing the Wrong Product
Not surprisingly, some products we chose were duds. They didn’t move as quickly as anticipated and based on follow up data and observations, we decided not to reorder the same products.
Solution: Spending more time during the research and development phase is essential. For future products we were more thorough about researching the niche, competition and developing a better strategy when creating the product. This includes differentiating our products but adding bundles, stronger branding or a more unique design. Not all of your products will be hits but the more time you spend researching the right product to source, the higher the chances you will find a product that works.
Jungle Scout is a great tool for researching products, niches and search results.
2) Wasting Money on PPC Campaigns
With a multitude of products and types of PPC campaigns that are possible when using Amazon’s PPC tools, staying on top of your advertising can be challenging. There were a some unsuccessful keyword campaigns we neglected to adjust that costed us a lot of unnecessary cash.
Solution: We developed a consistent process to analyze our campaigns and adjust them accordingly. Never neglect campaigns and review the data on a weekly basis. Scott Voelker has a great podcast on PPC and utilizing the new keyword types (exact, phrase).
Quick Tip: Start with “Broad” keywords. Move the winners to “Phrase” and move those winners to “Exact Match”. Either remove or lower bids to the losers. Amasuite is also a good tool for keyword research.
3) Getting Product Listing Temporarily Banned
Sometimes your product listing will be banned. Ours was. And it was due to no fault of our own. If enough customers refund or complain about a listing, Amazon may delist your product without warning and will not notify you after it is delisted. This happened to us and the only way we realized it was when ads stopped running for one of our products.
Solution: We contacted Amazon immediately and asked for an explanation and told them to expedite the solution. Less than a week later (around 2-3 days), the listing was back up with no explanation on the reasoning why it was removed in the first place. This resulted in a loss of sales. The only thing you can do is make sure you check your listings regularly and immediately contact Amazon if there are any issues. Be patient and understanding as there’s not much you can do about it besides requesting expedited service. At the end of the day Amazon has all the power. Don’t complain and just work within their system and rules.
4) Amazon’s Technical or Human Errors That Can Occur
You can be overcharged in Ads. Products can be mis-weighed, substantially increasing your fulfillment fees. Sometimes listings will not update correctly or variations will not show up right. This last issue can happen inconsistently, depending on the type of variation used and the category you are in. Be aware that this can happen and get comfortable with working with Seller Support.
Solution: Our ads automatically readjusted. We had Amazon re-weigh our products that we knew to be incorrect. We had weeks of phone calls and emails with Amazon about the incorrect listing and they eventually offered a solution that worked Many times their initial solutions will not pan out. You might have to work with multiple support reps before finding a solution that works.
5) Running Out of Inventory
We’ve lost up to a month in sales due to running out of inventory. Luckily when our products were back in stock we were able to rise to the same level in a short time period. Amazon’s algorithm has a good memory.
Solution: Give yourself a buffer of a few weeks. Reasonably raise prices to lower the sales volume. Use this opportunity to test high pricing you otherwise wouldn’t. Keep in touch with suppliers so you know when they may have busy periods or holidays that could affect production. Chinese New Years is a major holiday to be aware of if you are working with suppliers in China.
6) Product’s Being Held Up in Customs
Solution: There’s not much you can do about this. Customs reserve the right to stop and examine any shipment of products. This will not only take time (up to a few weeks) but cost you additional capital. Prepare by making sure you have enough inventory to weather this.
7) Quality Product Issues
We’ve had large quantities of products arrive that had defects or functional problems. For example, one product was difficult to unbox without the right instructions.
Solution: Use inspection services at the factory. Some examples of these services are FBA Inspection and Asia Inspection. If customers complain about certain defects, make sure you ask for pictures and provide great customer service by offering them an explanation and a full refund or replacement.
If the problem is functional and you have a solution, include the instructions for this solution in the follow up emails. Links can’t be used in Amazon follow up emails but you can create a jpeg or other image file and attach it to the email. No matter what the problem is, make sure it is addressed, inspected and confirmed to be fixed in the next order.
8) Losing the Buy Box
It happens. Sometimes by shady suppliers creating fakes. Sometimes by legitimate retail arbitrage sellers who received your discounted or free product for review and decide to resell it on Amazon using your listing.
Solution: Register your brand, purchase the buy box competitor’s product and take pictures. If it is a counterfeit, report it to Amazon and they will remove it. If it a retail arbitrage seller, report it to Amazon and tell them you do not have any authorized resellers of the product. For the second case, we normally don’t bother reporting it to Amazon and allow them to sell the item. Why? It’s typically a one off scenario and once they do sell the product we again own the buy box without the loss of much sales.
9) Selling a Product That Was Later Granted a Patent
It happened to us. A product we were selling was patent pending. We were unaware of this fact as it was not obvious they filed for a patent. Once the patent was granted they attempted to create a case against us for violating the patent.
Solution: We removed the product and offered them reparations for the time it was out in the market while they had a valid patent. They took the offer and we disposed of the product. Other solutions would be going to court to settle (typically too costly) or ignoring their demands (delaying the inevitable court battle). In the future we will conduct a more thorough search of potential patents for products we plan to source if we do decide to source a more uniquely designed product.
10) Getting Ripped Off by Suppliers
In a rash decision and desire to get a good deal, we gave a supplier we found on Alibaba.com a deposit and they in return gave us nothing. They ceased to respond to our emails and inquiries after that.
Solution: We complained to Alibaba, carefully reporting the documented conversations we’ve had with them in details. The supplier started to respond to us afterwards and return our deposit. Going through official Alibaba channels can be beneficial if disputes arise. It was useful for us. In the future, never give money to a company that you haven’t vetted properly yet. For more about sourcing products you can read this post.