Amazon is not only the market leader in e-commerce but also provides businesses and entrepreneurs with the fantastic opportunity to access millions of shoppers on its platform. There are numerous methods for selling on Amazon. Despite the differences in each business model's specifics, all Amazon sellers will encounter some of the same difficulties.
In this blog post, we will talk about the ten most common problems that new Amazon sellers run into, as well as how to solve them. From problems with finding products to problems with listing optimization, we've talked about everything a newcomer might run into.
Issues That New Amazon Sellers Face?
1. Short of Cash
One of the most common problems new Amazon sellers face is reduced cash flow because Amazon pays out every two weeks. On the other hand, sellers have to pay for the quantity bought from the supplier and new inventory to meet customer demand, which is an unexpected cost.
If you encounter reduced cash flow, it's important to take quick action to stay afloat. Some things you can do to improve your cash flow include:
- Review your budget and see where you can cut costs
- Increase your margins
- Offer discounts or promotions to encourage customers to buy
- Analyze Amazon payment schedules and schedule supplier shipments accordingly.
2. Avoid Saturated Niche
If you're selling on Amazon, chances are you're up against tough competition, especially in a saturated niche. It's critical to remember that not all of your competitors are giving you equal competition. Some sellers have been on Amazon for years and have built a loyal customer base. Others, on the other hand, may be new to the platform and are still trying to find their feet.
Either way, it's essential to stay ahead of the curve and always look for ways to improve your Amazon business.
Use this to your advantage and ensure that your products and services are top-notch. Over time, you'll build a loyal customer base of people who like the quality of what you're selling.
3. Inventory Performance Index (IPI)
As an Amazon seller, it's essential to keep the necessary amount of inventory. Insufficient inventory and a high turnover could cause frequent stockouts, and a steady supply of inventory that doesn't sell for a long time could result in expensive storage costs and penalties that are imposed by Amazon. Both situations can adversely affect a seller's performance in the market. In the modern business world, it is essential to establish an automated forecasting system and recommendation process to establish the optimal levels of inventory using historical data, decreasing the cost of holding and increasing satisfied customers.
Amazon utilizes its Inventory Performance Index (IPI) to measure the seller's inventory management. The IPI is calculated by the seller's 12-month performance in four areas that include excessive inventory, selling-through rate inventory, stranded inventory, and inventory in stock. A lower IPI score could have serious effects, including a lower appearance in the search result, a reduced chance of winning the Amazon Buy Box, and the loss of Amazon Prime status. This is what makes the IPI important to the visibility of a seller in general success at Amazon.
4. Price Wars on Amazon
One of the most significant new Amazon seller issues is price wars, and this is a typical issue raised by sellers who want their store to appear in the featured offer.
If you’re selling a popular item, chances are that other sellers are also selling it. This can lead to a price war, where each seller tries to undercut the others. It becomes a race to the bottom that leaves everyone making very little profit.
To avoid getting caught up in a price war, it is essential to know your margins and have a plan for how low you are willing to go. It is also a good idea to monitor your competition and adjust your prices accordingly. With careful planning, you can avoid getting caught in a price war and keep your profits up.
5. Receiving Amazon Reviews
As an Amazon seller, one of the most common problems you may face is receiving Amazon reviews. This can be challenging, especially if you are new to selling on Amazon. You can do a few things to make customers more likely to give you good reviews.
First, make sure you are providing quality products and excellent customer service. If your customers are happy with their purchase, they will likely leave a positive review. Secondly, reach out to customers who have already left positive seller feedback and ask them to review your product. This can be done through the request a review button on the order detail page.
If you adhere to these tips, you will be more likely to receive positive customer reviews, which will help boost your sales on Amazon.
6. Amazon Policy Compliance
Amazon has strict policies and guidelines that sellers must adhere to. Failure to comply with these policies can result in seller account suspension or even termination.To avoid running afoul of Amazon's policies, make sure to read and understand Amazon's policies and guidelines thoroughly. Consider investing in Amazon compliance software to monitor your account and identify any potential compliance issues.
7. Product Quality Issues
One of the most significant problems that Amazon sellers face is product quality issues, and that’s why your listing not making sales on Amazon. Poor quality products can lead to negative reviews, customer dissatisfaction, and an increase in product returns. This can be particularly problematic for sellers who rely on product reviews and ratings to attract new customers.
8. Shipping and Fulfillment
Shipping and fulfillment can be a headache for Amazon sellers, particularly for those who handle their own logistics. Managing inventory, shipping products, and dealing with returns can be time-consuming and costly.
To streamline your shipping and fulfillment process, consider using Amazon’s Fulfillment by Amazon (FBA) service. FBA allows you to store your products in Amazon’s warehouses, and Amazon handles all shipping, handling, and customer service on your behalf.
9. Customer Service
Providing excellent customer service is essential to maintaining a positive reputation on Amazon. However, managing customer inquiries and complaints can be challenging, particularly for small sellers with limited resources.
To provide excellent customer service, make sure to respond to customer inquiries promptly and professionally. Consider using an automated customer service tool to streamline your customer service process and save time.
10. Product Ranking
Amazon's search engine is the primary way that customers find products on the platform, and ranking high on Amazon's search engine is critical to the success of an Amazon seller. However, achieving a higher ranking can be difficult, and it often requires significant time and effort to optimize product listings, conduct keyword research, and run effective advertising campaigns.
To improve your product ranking, focus on optimizing your product listings with relevant keywords, high-quality images, and compelling product descriptions. Consider running paid advertising campaigns, such as Sponsored Products, to increase visibility and drive sales.
Conclusion
There you have it, the most common new Amazon seller problems. When you face these challenges, it does not mean that there are problems with Amazon or the platform itself. Even though these problems may seem hard at first, remember that many successful Amazon sellers have already dealt with them. New Amazon sellers can navigate these challenges and build a successful business on Amazon's platform. It is important to remember that building a successful business takes time and effort, and patience is key. With perseverance and determination, new Amazon sellers can turn their business into a thriving venture on Amazon's platform.
Author's Bio:
Minhas M is an E-Commerce Marketplace Specialist at SPCTEK.
"As an Amazon Expert with several years of experience in the e-commerce industry, I have helped numerous businesses achieve success on the Amazon platform. With a passion for technology and a deep understanding of Amazon's complex algorithms, I have become a go-to expert for businesses looking to increase their sales and visibility on Amazon."
