12 Things I Wish I Knew Before I Started Selling on Amazon
Read time: About 8 minutes!
As the #1 e-commerce marketplace in the world, I undermined the power of selling on Amazon. I have a habit of diving into things before figuring out every single detail. I find this works better for me because I don’t stuck on the “almost ready loop.” I prefer to work out the “bugs” on the fly.
Unfortunately, that comes at cost- one that you’ll hopefully not have to pay since you’re reading this.
Being SO HUGE, Amazon can pretty much boss you (the seller) around. If there’s one takeaway from this post, make it this: It’s a privilege and NOT a right to sell on Amazon. The moment you forget this, it’s the moment they spit you out of their platform faster than you can say profits.
To make sure your selling career is prepped for success on Amazon, check out this post to see 12 things you should know before you get started.
1. Amazon customers are more or less kings/queens, accept this
Amazon treats their customers like royalty- as any company should. But most times, I think they go overboard. They follow the whole “customer is always right” thing to the T. I’ve had customers initiate returns simply stating that the item they bought is “defective” even when it clearly isn’t (because I test everything that’s sent back).
This would be fine if it doesn’t affect your overall rating but unfortunately it does- in a huge way.
A customer did that to one of my main products and immediately Amazon blocked the product and requested documentation to show that the products I was selling were from a legitimate supplier.
I understanding doing this when there’s been 3 or 4 customers complaints out of the hundreds served- but just 1 is ridiculous.
Lesson here- treat your customers extra well and understand that you have little to no power if you decide to go head to head with a customer about an order because 9/10 times, Amazon will side with the customer even when they clearly shouldn’t.
2. Choose your products wisely
Some products may seem great but some brands are very protective of their products and won’t allow other sellers to compete with them on Amazon (which is understandable) from a business perspective.
To avoid having your product possibly blocked and reported to Amazon and having your account suspended, do your homework first.
If you intend to sell a product being sold by a brand owner, email them to see if it’s ok to list their product.
Either that, or do as I did and list the product to see if they will contact you with death threats or something like this “If you don’t remove your listings we will place legal claim against your seller account with Amazon legal and copyright department, which may cause suspension to your seller account.Thank you for your attention to this serious matter.”
3. Don’t let your “Account Health” deteriorate
Amazon has 3 account health statuses “Poor”, “Fair”, and “Good” indicated by red, yellow and green colors respectively. You don’t want the red color.
My account dipped to red one time but I learned quickly and redeemed myself.
However, you may notice a yellow (warning/fair) sign that shows on my order defective rate.
Remember when I said something about Amazon’s customers being royalty, well this one customer didn’t know how to request a return so instead of going through the normal procedure, they opened and A-Z claim, well apparently when that happens, you automatically must be selling defective products and so that had a dent on my account (even though all the customer was trying to do is return the item)
But lesson here is to watch those 7 metrics and makes sure you stay on top of your game at all times.
4. Avoid A-Z claims as much as possible
Except for the case above, normally a customer will open an “A-Z claim” with Amazon if they try to resolve a matter with you but you refuse to help them out. It’s their way of reporting the matter to “daddy”- and when Amazon steps in, the pretty much give you an ultimatum.
Also, as shown in #2 above, this affects your account’s health- which you never want to mess.
So even when a customer seems unreasonable with their return request just go with the flow (especially when you’re starting out) because anything negative or positive on your account has a bigger impact because you are working with a smaller data set.
5. Don’t ignore reading these 3 policies before you start selling on Amazon
“I Accept” is one of the biggest lie we tell when signing up for services online. Most times, it’s pretty harmless but on Amazon, it can really hurt you.
You can ignore everything else but make sure you take some time to read these 3 policies before you start selling on Amazon:
6. Ship out orders ASAP
How fast/soon you ship out orders determines your seller ratings score which is an important key in whether Amazon keeps your account your account active or suspends you and most importantly also determines how happy your customers will be with your service.
7. Getting your products on top of the list should be a top priority
Being on top of the list guarantees sales. Even though you won’t make it to the “Buy Box” if you’re not an FBA seller, being up there will help alot.
To do this, start by selling a low-competition item to boost your seller ranking. This will increase the probability that the offer will show higher for more competitive products.
Alternatively, you can try offering a very competitive price on a popular product. This will draw in bargain shoppers and can increase your seller ranking.
8. In the beginning it pays to have the lowest price
This is an expansion to the point explained on #7 above.
I’ve heard the more seasoned sellers call this the “race to the bottom” normally played by newbies trying to move more products by listing them at the lowest price possible. It normally ends up with 2 or 3 sellers competing for the lowest price (hence appearing as the first on the listing allowing them to sell more.)
When starting out, I believe it’s ok to sacrifice profit margins so you can move your inventory. This allows you to quickly reinvest in your business hance make up for the lost profits through volume.
I’m 2 months in and I’m still doing this. Although I’ve reduced it to only occasionally, I find this method very effective.
When I have enough inventory to afford the “wait out” period (after the point when the newbies competing in the race to the bottom run out of inventory) only then will I stop participating in this “race”.
9. Having a faster shipping method helps
Amazon doesn’t allow new merchants to offer certain shipping methods right off the bat, such as two-day shipping. These shipping methods have to be earned by establishing a history of reliable shipping at the slower shipping speeds.
After you have maintained a good shipping record, you have “Expedited” shipping available in your account. This helps you to gain access to a whole new customer segment that is willing to pay a little more to get their order a bit sooner.
In most cases, you make money off of shipping, so the more they pay, the more you may be able to make.
More money is good.
10. Don’t list a product that already exists separately
According to Amazon’s rules, only product can exist in their catalog. E.g. you can’t have to sellers selling the X-Box One in two separate listings.
Instead, they give you the option to associate your listing with with another product that’s already listed on Amazon. Read the rules here.
When you create a second product for an existing product, your listing will be removed.
So match your product to the product detail page that already exists, the upside to doing that is that your offer has a chance to be seen by more people anyway.
11. Don’t solicit reviews
It is against Amazon’s policy to solicit or paying for reviews. If you do so, you may risk having their accounts suspended.
I prefer to give my customers an awesome shopping experience (including pricing, great and fast communication/correspondence, and shipping reliability) so they end up vouching for you on their own.
Even with this approach, it’s still hard to get reviews- don’t beat yourself up too much over it.
12. Plan your payouts on a weekday
Cash flow is important in any business.
Amazon pays it’s sellers every other week. I messed up and had my payouts scheduled on a Saturday. So now, each time my payout is released, I have to wait until Monday for it to hit my bank account.
This is especially frustrating because most times, I’ve wanted to replenish my inventory but have had to wait for another week to come around in order for funds to hit my account before I can place a new order.
So, whenever possible, make sure than your payouts are mid week or beginning of the week (but not weekends).