What are Amazon sellers worried about the most?
While starting your own brand or business on a major e-commerce platform like Amazon has been made simple, it is by no means easy. Amazon’s dominance as the ‘go-to’ marketplace for selling a wide variety of products is undeniable. It’s a top destination for both sellers and buyers.
However, despite how easy Amazon has made it for people to start selling their brand or product, how they survive or remain competitive is entirely up to them.
There are many things Amazon sellers worry about on a daily basis – from whether to choose FBA, FBM or dropship, to figuring out ways to grow their storefront or surviving the initial learning curve.
Even though there isn’t a single issue that sellers on Amazon worry about the most, here’s a look at some of the most common problems keeping Amazon sellers up at night:
Too much pressure from the competition
Unsurprisingly, we kicked off the list with this one because, come on, it’s Amazon! It’s the largest e-commerce marketplace in the world and with literally millions of sellers trying to get a slice of the market, competition (and the pressure that comes with it) is nothing short of overwhelming.
Sellers are constantly worrying about how to stand out prominently among other sellers or brands who are selling either almost the same product or a very similar one. Or, how to maintain a strong market position and ensure that the competition doesn’t find a way to sabotage that.
Thanks to the millions of sellers which are selling on Amazon today, new sellers in particular find it really difficult to penetrate the market, worrying about things like how to position their products strategically for organic search or how to write a great listing – or, for example, when to introduce price changes or which products are the hottest-selling.
Questions, questions!
This is why many sellers, both new and experienced ones, ultimately decide to work with an Amazon marketing agency which can guide them through the fiercely competitive landscape, helping them make the right decisions to stay in the game.
Price wars and Amazon fees
Oh, the price wars – they are absolutely, truly a thing on Amazon!
Sellers will literally sacrifice some of their profits just to end up in the Buy Box. In fact, a lot of inexperienced sellers try to outbid their competitors by offering reduced prices, which often proves to be a fatal mistake as it quickly cannibalises into their profit margins.
An Amazon marketing agency with years of experience can help you come up with a great repricing strategy, ensuring that you don’t end up sacrificing profits just to sell a little extra for the time being. In the long term, it just isn’t worth it.
Then there’s the various Amazon fees that sellers must pay – from selling plans and referral fees to FBA storage fees, fulfilment fees, seller disposal fee, returns processing fee, and more. Sellers tend to worry a lot about maintaining healthy profit margins as there are so many expenses to cover on a month to month basis.
Obtaining feedback from customers
Obtaining valuable feedback from customers is a highly invaluable tool for sellers.
You see, Amazon is very much a customer-focused and customer-centric platform. Customer reviews, whether they are positive or negative, are essential to your storefront’s health. After all, you need to allow your customers to conduct seamless transactions with you, and if there are hardly any reviews on your product or none at all, then people will not be too eager to take a chance on you.
Furthermore, when customers place orders, those orders need to be delivered within the timeframe promised. But, how do those customers let you know? What if there are problems along the delivery chain and there’s no system in place to process returns, complaints, and/or repackaging?
Moving forward from 2016, sellers have been barred from incentivising customers for reviews, which means reviews can be facilitated only through Amazon’s Vine Program.
Getting people to leave detailed reviews can be very challenging initially. Most buyers are pressed for time and will not bother to leave positive reviews – although, if they have a bad experience, they will not hesitate to leave a big wall of text!
An Amazon account management team can handle all aspects of customer and after sales service for you. From your store’s health metrics to product returns, repackaging, shipping, and following up with buyers to leave reviews.
Changes in Amazon’s policies and restrictions on sellers
Amazon regularly updates its algorithms, policies, compliance framework, fee structures, etc.
Sellers usually worry a lot about these as the changes may adversely impact their business, particularly if they are not aware of how policy changes, for example, may affect their current selling strategies – not to mention the over-reliance on certain strategies which may become less effective or profitable as a result of the policy changes or new restrictions being imposed.
Let it be known: Amazon takes a zero-tolerance stance on policy violations. They update their website regularly whenever there is a policy change, expecting sellers to follow suit, and have no problem at all suspending hundreds of stores each month for non-compliance.
Getting suspended by Amazon is a serious affair – not only can it harm your reputation and discourage people from buying from you but it can also result in your store permanently being shut down. In addition to your store being suspended or shut down, Amazon may even hold your funds.
It’s worth understanding that restrictions and policies have been put in place by Amazon to keep their ecosystem running smoothly and, especially, to provide all sellers an equal opportunity to succeed. To avoid suspensions or any nasty surprises related to non-compliance, sellers must be aware of the rules and policies at all times.
Many sellers work with an Amazon agency to have their store managed on a 24/7 basis, and almost never run into issues, as a result.
Negative feedback and reviews
Even though we covered this briefly in one of the sections above, we ought to stress on the fact that any kind of negative reviews or feedback from buyers can significantly influence future buyers’ decisions.
Negative reviews can not only harm your sales but also your overall seller rating, which can be very difficult to reverse on your own. More importantly, not knowing how to respond to the negative reviews can further send things spiraling out of control.
By consulting with an Amazon agency, you can always stay on top of negative reviews, deal with them as soon as they surface and offer buyers a speedy resolution or response in order to pacify them or ease their concerns.
Not enough capital
Naturally, there are startup costs to every new business and Amazon is no different. Between kicking off your business on Amazon and getting your resellers license, there’s also shipping fees, monthly fees, and taxes to consider.
Sellers often find themselves worrying to death about such issues because quite often than not, they can’t seem to generate sufficient cashflow to maintain their inventory. Amazon pays out to sellers every two weeks where most sellers fall into the trap of relying on this revenue initially.
A general lack of capital can seriously prevent you from growing your storefront. In a worst-case scenario, you won’t be able to fulfill your orders. Keep making these ‘mistakes’ and Amazon will likely suspend your account.
It’s always a good idea to have some working capital. Way too many sellers depend on sales from their listings alone, instead of having a reasonable amount of working capital to act as a cushion, especially when times get tough. Having to ‘pause’ your store dealings just because you no longer have funds is a surefire recipe for failure.
Although dropshipping may alleviate some of these issues at first, you may still need time to build positive cashflow and keep your business in the black. By consulting an Amazon agency from day one, you can ensure that there’s enough working capital, and that you are also not making costly mistakes which are cutting into your profitability.
Customer returns
Amazon is very buyer-friendly and that’s one of the key reasons they have become so wildly popular over the years. If you’ve ever bought anything from Amazon then you know how customer-friendly the return policy is, especially compared to other e-commerce platforms.
Amazon’s return policy can vary depending on which category your product is in. Some categories, for instance, offer free returns, but you’ll be the one paying for that return as a third-party seller.
The ‘free’ return policy also encourages customers to buy several products, keep the ones they like, and return the ones they don’t like! We’ve had sellers come up to us saying that their customers bought four to five competing products, and then returned the four they didn’t like!
This can very quickly result in high return rates and extra expenses for sellers.
Avoid these worries with professional Amazon account management
You don’t (ever) need to worry about the above if you consult with a professional Amazon agency. We help you stay on top of things while you focus on growing your business. Consult us now to learn how we do that: (+44) 01743 816191.