Let’s be honest… Amazon FBA mistakes are easy to make if you’re not prepared or experienced.
Sellers often encounter much pain on the platform, which is so different from other sales channels. It’s not surprising that some of them get frustrated and walk away from Amazon.
In this episode, Shannon and I will cover the biggest Amazon mistakes we see repeatedly. Fortunately, the majority of the mistakes are predictable and easily avoidable.
You’re probably wondering how we can be so sure… Well, in the last 20 years, we’ve made more mistakes than any other seller!
But you know what they say – when you do everything right, you don’t learn anything. When you make mistakes, you learn from them.
And we learned A LOT before cracking the code on Amazon.
So, tune in to learn all about the most common mistakes Amazon sellers are facing every single day! We made them, so you don’t have to.
Let’s dive in!
#1 Trying to Outsmart Amazon
This is one of the most pressing groups of mistakes – believing that you can game the system, violate Terms of Service (ToS), or even break the law and get away with it.
It’s because many sellers are not aware of how knowledgeable Amazon is and how much data they have.
There are also those who are not trying to trick the system – they just don’t know they are violating the rules. But when it comes to consequences, no one will ask you if you broke the law intentionally or if you just weren’t aware of that.
Sometimes, Amazon even enforces things that are not explicitly stated in the ToS. So, in some cases, you have to be able to read between the lines and know what the gray areas are. That’s why you have to be educated about ToS and Amazon’s policies and make sure that you’re playing on the safe side.
So, ignore the YouTube videos (unless it’s the Day 2 podcast) and hucksters promoting tricks that will get people suspended, fined, or put in jail – read the Terms of Service and rely on information coming only from relevant sources.
Now, let’s list some of the biggest mistakes in this group:
Tricks That Never Work
– Fake Reviews – Think you can go and find a Facebook group where you can buy some reviews, and no one’s going to find out? Well, think again! Because this way, you’d violate a federal law, which is punishable by a fine that can ruin your financial future.
Amazon has also banned giving away free products in exchange for positive reviews (or, as they labeled it, “fair, unbiased review”), which was allowed in the past.
– Ranking Tricks & Rebates – Sellers used to give away free products in exchange for a real live full-price purchase on Amazon to spike the organic ranking algorithm. But recently, this practice has been specifically outlawed, as well.
– Buying Resold UPC Codes – Instead of buying UPCs from the only relevant source – GS1 US – sellers purchase resold codes trying to save some money. However, those codes don’t work on Amazon anymore, and if you plan to buy resold UPCs, you might be disappointed. So get legitimate GS1 UPC codes!
– Frauds – There are many fraud attempts on Amazon – scams, phishing, spoofing, fraudulent purchases, orders, credit card transactions… But the company is sharpening its focus and clarity on ToS to identify such activities and take down or even sue the abusers. And it wins (sooner or later).
I’ve recently read about a guy who sold about $1.5 million of Amazon product and never shipped it – just kept creating different seller accounts. Of course, the guy’s ended up in jail.
– Bribing Amazon Employees – This is a serious no-no! In the fall of this year, there’s going to be a Federal Court case in which several individuals allegedly bribed Amazon employees to get beneficial treatment to their listings and take down their competitors.
#2 Failing to Defend and Protect Brand on Amazon
The second group of mistakes that people make all the time is failing to defend and protect their brand on Amazon. It’s critical for sellers to understand they can’t take such a risk because it’s like building a beautiful castle with crystal chandeliers and other luxury things and leaving the front door open.
This is the list of the ways in which people fail to defend and protect their brands on the Amazon platform:
– Not Securing or Your Trademark or Other IP – This is sort of a foundational piece. If you are doing things right and want to protect your brand, get the trademark using Amazon IP Accelerator.
Not only that you’ll enjoy the benefits of the brand registry, but more importantly, you’ll be able to submit violations within the Amazon system if someone copies the name you’ve built and created a brand behind.
– Not Defending Your Brand Keywords – This one probably causes the most pushback from brands. It’s pretty understandable why brands resist paying for their own registered trademark brand keywords. But Amazon’s not alone in this – Google and others also do it.
Yes, it’s frustrating, and, honestly, I’m not happy with this either. But if you don’t defend your brand keywords, you’re letting others take this key vital real estate above the fold in the search results page and feed off of your brand name to sell their product and not yours.
– Failing to Take Action – When you do find competitors who are violating your intellectual property, aggressively file those violations! Amazon has a system within Seller Central and Brand Registry for reporting violations against your IP. So use it – don’t let others rip off your innovations!
Selling to Distributors Without a Channel Control Strategy
This needs to be emphasized – clean up your channel! Do that proactively before getting big on Amazon. (Or hire experienced Amazon operators, like the Avenue7Media team, to do that for you.)
Some brands built multi-million dollar businesses by making a great product, coming up with a wholesale price, and selling it to distributors and other resellers. That was a great strategy to get their product placement on shelves and even online stores.
But guess what – it doesn’t work on Amazon! Actually, it creates a total mess there. This blog and the podcast are not long enough to cover all the aspects and benefits of channel control (whole books are written on this topic).
However, there is one general point…
Do not let somebody else attach to the hard work you’ve put into your own listings on Amazon!
There is zero value in creating best-in-class listings and allowing somebody else to come in and attach to them.
It can be harmful as well, and here are some of the consequences:
– you don’t get clean data
– you don’t know what your true conversion rates are
– you don’t know what your true attribution model is
– when you paid for an ad, you don’t know if someone else got the sale
But if you protect your brand and clean up your channel to be the only seller in the buy box, you can accelerate growth in the thousands of percent year over year.
(We had a client who managed to do that with our help, check out the full episode of the Day 2 podcast to hear all the details.)
#3 It Takes a Village
You can’t just hire one or two people to take care of the Amazon sale for your company because the platform has become too complex.
We have as many as ten departments at Avenue7Media in order to provide full service to our clients:
– research and reporting department
– copywriting department
– graphic design department
– video editing department
– advertising department
– customer service department
– customer engagement department
– FBA and inventory management department
– compliance department
– suspension and reinstatements department
I listed the departments just to show you that you need more than one guy who just graduated from college to do all that stuff. As one of our managers put it, “It takes a village” rather than a person or two.
You can hire either a legitimate team of four or five experienced Amazon operators or an agency to get this done for you.
And remember – there’s no qualification for Amazon. You should keep in the back of your mind that anybody can put up a website and claim to be an expert on Amazon. So, be super careful when hiring someone to deal with these issues on your behalf.
#4 Expecting That Amazon’s Going to Help You
Amazon is not your friend.
It’s an enormous company with more than a million workers. And the number doesn’t include hundreds of thousands of contract delivery drivers. Yet, it’s one of the most understaffed companies in the world. Because they can’t get it done!
So if you think you’re going to have a relationship with Amazon, you’re wrong – they’re just too busy for that.
Even when we need to contact someone at Amazon on behalf of our clients to help solve a problem, it can get tricky. And we know exactly which department to go to and what to ask!
Amazon is actually a do-it-yourself platform. If you want to succeed there, you just need to understand how the platform works. Or hire someone who has already cracked its code.
#5 If You List It, Sales Will Come – WRONG!
The last mistake I want to cover is failing to understand that Amazon is a pay-to-play platform. If you’re not driving clicks and sales, two essential things that feed Amazon’s algorithm, you will lose.
You need to drive traffic, and you have to pay for traffic. Let me give you an example. We’ve got a brand in the marine industry that spent less than 2% of their sales to drive ads to their listings. It was a seven-figure-a-year business before we signed it on as a client.
Guess what happened after we built an effective campaign, started driving a lot more ads to their ASINs, and increased the 2% of add sales to 10%? We’ve quadrupled their sales! Because we knew how to play the Amazon game.
So, you got to pay for it. I don’t like it either, but that’s how it is.
It was the last of the Amazon mistakes we covered in this episode.
If we want to summarize today’s topic and draw up a general rule, then it would be: You don’t have to love Amazon, but you have to play by its rules. And you definitely have to be there because it owns more than half of the online market share.
Additional Resources…
– Visit here to get GTINs and U.P.C. barcodes from GS1 US.
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