5 Problems You Didn’t Know You’d Run Into Selling on Amazon (And What to Do)

May 25, 2018

Over the years, Amazon has been gaining a steady foothold in the online selling arena. Today Amazon stands among the world’s fastest growing online retailers. This popularity has consequently attracted a torrent of vendors to the platform, selling all kinds of things from books, beauty products, furniture to car parts. You name it; they got it. Due to their unprecedented success, Amazon has set up fulfillment centers at strategic areas all over the world, catering to the demands of buyers for fast and reliable service.

As wonderful as all this sounds, Amazon is not perfect. It had shortcomings in the past and continues to be plagued with problems today, especially with regard to its relationships with sellers.

  1. Amazon’s Iron Door Policy

There was a time when anybody can just get on Amazon and start selling books, gadgets, used items and whatnot. Well, not anymore. Amazon has tightened up their policy after a deluge of bad experiences with vendors who failed or refused to abide by their rules. Now, you can no longer sell beauty products, shoes, car accessories, electronic gadgets, clothing, swimwear and a whole bunch of other categories without Amazon’s approval ‑ which gets harder by the minute to obtain.

Other online retail platforms do not have such restrictions. On eBay, for example, a vendor can sell any service or product as long they don’t fall under prohibited categories.

  1. Amazon Makes You Wait 14 Days Before You Can Get Your Money

Another problem sellers run into is not getting their money right away after they’ve sold a product or service on Amazon. They will have to wait for a period of two weeks before Amazon deposits the money to their bank account. Another thing sellers find discouraging is buyers cannot use PayPal when making a purchase. Being able to receive payment via PayPal would have been a convenient way for sellers to capitalize their earnings, buy more stocks and fund the growth of the business.

In contrast, this isn’t a problem with eBay and other online retailers where sellers get paid in real time, sparing them the need to bridge cash flow gaps.

  1. Cutthroat Competition

Unless you have the monopoly of a unique product, then you are likely to be competing with hundreds of other vendors selling the same or similar items as yours. This makes competition between you and other sellers very steep.

Most of the products that are being sold over Amazon have been bought in bulk from wholesalers. And situations such as this always end up in price wars. This is further made worse by the fact that Amazon vendors use software that carries out automated repricing of their inventory.

Once a seller begins lowering prices, others follow suit. And with every seller’s prices touching bottom, the only one who’s happy about all this is, of course, the buyer.

  1. Building Excellent Feedback Takes Too Long

Did you know that only three percent of Amazon buyers leave feedback? The fact is, Amazon customers are a finicky lot, and when they do leave feedback an even smaller percentage will have something good to say about the product or service.

eBay sellers are far better off considering their customers are more conscientious in leaving good feedback and reviews. So if as an Amazon vendor you rely on feedback to help improve your business, then good luck with that because Amazon’s feedback system has very little to offer in that direction.

  1. Amazon Can Strip Your Rights to Sell Your Products Without Warning

Amazon operates on the principle of maximizing profit for itself. In order to further this goal, it will grab every opportunity to partner with various brands, wholesalers and manufacturers to the exclusion of third party vendors such as you.

For example if you’re selling a certain brand of orange juice and Amazon suddenly partners with that company, you could immediately receive communication from Amazon barring you from selling that particular brand. With Amazon, you can lose the right to sell products just like that without a warning.

Now here are three important things you can do to offset these problems and make selling on Amazon a more profitable endeavor.

  • Specify your tax options
  • Focus on growing your profits
  • Optimize your product listings

Specify Your Tax options

You’d be surprised at the number of Amazon vendors who have never gotten around to setting up their tax options. While online remittance centers abound, it’s more efficient to go with Amazon on this one. However, before Amazon can perform the service of collecting state taxes for you, you need to indicate you tax options, including the appropriate state or jurisdiction from which Amazon should collect tax.

You may, if you prefer, simply absorb the cost of state sales tax as part of business expense. However, you cannot run away from the duty of remitting the tax; it is something that is required of you regardless of the manner in which you choose to collect it.

Grow Your Profits

We’ve heard of Amazon vendors who spend all their energy trying to achieve that one-million-dollar-a-year goal while losing sight of their day to day bottom line target. Playing catch-up with the big players is a long shot with very little assurance of success.

You have to start at the bottom to get to the top; and you’ll grow your business faster by focusing on accumulating bits of profits, maintaining a steady working capital and accounting for day to day business expenses right there and then.

Optimize Your Product Listings

Amazon Seller Central provides you with data and information you can use to optimize your product listings for visibility, positive engagement and profit.

Successful Amazon sellers have always known that the process of optimizing product listings is a continuing one, and must be monitored closely as demand and customer needs change. Leverage Amazon’s Ad reports for learning the exact words and phrases your buyers used to find your products or services.

By keeping track of these reports, you’ll discover how certain keywords you previously thought were ineffective can actually lead to sales. And so all you have to do is use them to your advantage.

Bonus Tip: What to do When Amazon Fails to Reimburse You for Lost or Damaged Items  

If you are on the FBA program, you are likely to have experienced this problem. When your goods are lost or damaged, Amazon binds itself to reimburse you for the whole amount. But this does not always happen. Many sellers are already complaining about Amazon’s lopsided policies when it comes to giving refunds or reimbursements.

Despite Amazon’s many shortcomings, sellers (and buyers) still prefer it to other online retailers for one reason or another.

The good news is you no longer have to jump through hoops and loops to get reimbursed for lost or damaged items. Seller Investigators can collect this money for you in a fast, expedient and risk free manner so you can give your growing business the full attention it deserves. Happy selling!