The 10 costliest mistakes people make on Amazon
Updated: Feb 14
Amazon is an oasis of opportunities for online Sellers - but one that can be a minefield if you make crucial mistakes.
For all the potential for growth on the site, nothing is guaranteed without a combination of hard work, research and good business practise.
Thompson and Holt senior case handler Holly Sloan, who has extensive experience of how Amazon operates, highlights 10 regular mistakes that Sellers can make which cost them money.
1. Not promoting your products sufficiently
Thompson and Holt’s Holly Sloan: “This is such a common mistake. Many new time Sellers believe that just creating an account on Amazon will guarantee instant revenue. But such is the competition on site now, that you need to stand out among the crowd, and services such as PPC (pay per click) and sponsored product ads will generate more profit in the long run. Make sure you keep a track of your data so you know what everything is costing compared to your profits, but advertising is undoubtedly a key part of selling on Amazon.”
2. Mismanaging your inventory
Thompson and Holt’s Holly Sloan: “This can be difficult at times - some parts of the year, like the holiday seasons, generate much more sales than others. But you have to be prepared for that, having stock when you need it most, and not wasting money on storing large amounts of items during quieter times. Again, keeping track of your numbers and learning from past experiences is key here. It’s also worth considering both Fulfilled by Amazon and Fulfilled by Merchant if you have the resources to do so - do your research before making a decision.”
3. Not using Amazon’s Seller software and tools properly
Thompson and Holt’s Holly Sloan: “A lot of the things we’ve mentioned above and will do below can be aided by specific online tools that can help your business. Look into tools that can help manage inventory, repair feedback and generate product reviews. Again, research is key here - there are plenty available so read other Sellers’ experiences, work out the costs and see if they are a good fit for your business. If they are, they can save large amounts of time and help generate more sales.”
4. Not dealing with supplier issues
Thompson and Holt’s Holly Sloan: “Everybody’s suppliers are different and have their own benefits and issues. Look into the track record of the companies you’re looking to buy from the try and avoid things such as poor quality items, unreliable deliveries and inconsistent pricing. If you’re buying from abroad these issues can be even more crucial. If you are having problems, don’t hesitate to look to switch - there are so many options out there and finding the right fit for your business is important.”
5. Not using automated emails to generate reviews
Thompson and Holt’s Holly Sloan: “This is another big one where online tools are vital. Every Amazon store should have a review strategy in place because it is such an important aspect of the site. Make sure you’re familiar with the ‘Request a Review’ button to convert sales into product reviews, and look into tools like FeedbackWhizz, which can allow you to fully automate ‘Request a Review’ and get the most out of it.”
6. Not optimising product listings fully
Thompson and Holt’s Holly Sloan: “Making sure you explain exactly what you’re selling in your product listing is crucial. If you get a size wrong and the customer complains, it adversely affects your ability to sell more of them. Carefully present all of your information accurately and concisely, making sure pictures are clear and accessible. It’s also worth keeping track of competitors’ listings to monitor any changes in sales trends.”
7. Using the wrong metrics when analysing
Thompson and Holt’s Holly Sloan: “There are so many measuring tools available now to track your Amazon profitability that it’s key you use the ones best suite to you. Start by looking into Amazon ACoS, TACoS, and ROAS online. Understanding what these metrics are and their strengths and weaknesses can help you profit.”
8. Focusing too much on having the lowest price
Thompson and Holt’s Holly Sloan: “This can become an obsession for some, and while pricing is undoubtedly very important, you cannot sell your product at a price that loses you money. By all means keep track of your rivals’ pricing because it is a factor - but so are product reviews, brand, styles and advertising. It’s a whole package approach rather than just looking to be the cheapest on the market.”
9. Being overcharged for fees
Thompson and Holt’s Holly Sloan: “In most cases, there is nothing you can do to lower Amazon seller fees, which are static. But there are times where Amazon can place your items in the incorrect category, leading to higher referral fees. Or, it can get sizing wrong and overcharge you. You can report these to Amazon’s customer service teams for corrections and refunds - if it’s a high volume product those mistakes can add up to a decent sum quite quickly.”
10. Breaching Amazon’s terms and conditions
Thompson and Holt’s Holly Sloan: “This is the biggest mistake we see - and the one Thompson and Holt can help you with if you fall foul of it. Amazon can temporarily exclude you for a host of breaches, and those terms are also constantly being updated and changed. The rules on buyer-seller messaging, as one example, have seen multiple redrafts in recent years, and some Sellers get overwhelmed with these updates and stop staying on top of them. But pleading ignorance will not be accepted as an excuse and you could quickly be offline for an extended period of time. If that happens to you, contact Thompson and Holt for the quickest way to return to selling on Amazon.”
If you have found yourself suspended while selling on Amazon, contact Thompson and Holt for a free LiveChat to get your Seller business back online as quickly as possible.