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Selling on Amazon Beginners Mistakes

Updated: Jun 14, 2021

Selling on Amazon is a great way to earn an income. You can choose to keep it as a part time, extra cash side hustle, or make it your own full time business and even employ other people.

Whichever option you choose to take there is a lot to learn. Selling on Amazon is not hard, but it can be complex and you will encounter hurdles on the way. Don't let this discourage you though, this doesn't mean that you can't get started with some basic knowledge and learn the rest on the way.

There are a few main areas you will need to learn to keep your Amazon account working for you and in good shape.

Sourcing - How to find deals, where to find deals and what makes a good deal.

The best kind of deal to find is a replenishable one that not many people know about. To find these types of deals you need to dig deep, and look in places that the majority of people are not searching in.

You are not going to find a replenishable deal in Argos because as soon as other people find the same deal, the listing will get tanked. By this I mean that lots of people will join the listing and those who have their repricer set to a penny under everyone else's price, will end up dragging the price down, lower and lower until there is no profit left in that listing.

Lots of new sellers do this because they don't realise that the profit they think they are getting isn't actually the correct figure. The Amazon seller app is great for scanning and finding a listing in the Amazon catalog, BUT when they calculate the profit it doesn't take into account VAT. Amazon charge VAT on top of their fees and this amount is taken before they pay you your profit.

They also don't add in any storage fees, which are relatively low and taken on a monthly basis, but also an amount that can escalate before you know it, so you need to keep this in mind if buying a product that might not sell very quickly.

I have always used an Amazon calculator called Buy Bot Pro to work out my profit and I have found this software to be the most accurate and straightforward to use. You can adjust the settings to suit your needs and get a real clear calculation of the profit you may received. Using BBP will not only give you clear idea of your profits but is also a great way to manually look for deals on websites with its manual sourcing accelerator. When you have it installed you can right click on any online shop and it will search for that product on amazon and then calculate if you should buy it or not.

Admin - As soon as you can, open a separate bank account for all your purchases. This will make it so much easier to keep track of your incomings and outgoings. There are a few online business banks like Starling and Tide which are relatively easy to open and simple to use, or your own personal bank may be able to open you a business account.

You must keep all your receipts and invoices for every product you buy and send to Amazon. They can ask you at anytime for proof that your product is legitimate and not a fake. The easiest way when you first start out is to take a clear photo of your receipt and file it in a folder with the appropriate month, to make it easy to find if requested. Receipts fade after time so do this straight away.

Make sure your store receipts itemise the product you bought clearly, for example "Cadbury chocolate fingers 400g" and not just "Chocolate" or Amazon will not accept them.

Cashback & Discount codes - Always go through a cashback site to earn extra cash on all your buys. I use Complete Savings, Top Cash Back (which has a Google chrome extension so pops up when it can be used with an easy 1 click option) and Quidco. I also use Honey and Pouch Chrome extension for discount codes that pop up at the checkout and save you even more money instantly.

Prepping and Shipping products via Fulfilled by Amazon (FBA) - If you can touch the actual product you are sending, in then you should put it in a polybag. Amazon will ask for you to polybag liquids or items that could spill out and make a mess, but I have found that if you are sending something that could get tatty and dusty in a warehouse then polybag it. I buy my poly bags from polypostal packaging and they are super fast at delivering and have competitive prices too.

When you are shipping all your products in one big box to Amazon FBA, make sure you are utilising the UPS shipping cost & taking the price of shipping off your gross profit, and don't forget Amazon add VAT onto the price they show you for shipping.

an example of some shipping weights and sizes, the price is more dependant on the weight than the size of the box (if you are staying under 63.5cm)

2 x 5kg (10kg) 60 x 60 x 60cm = £8.69 inc VAT

2 x 10kg (20kg) 60 x 60 x 60cm = £8.69 inc VAT

2 x 5kg (10kg) 30 x 30 x 30cm = £8.69 inc VAT

2 x 10kg (20kg) 30 x 30 x 30cm = £8.69 inc VAT

The price starts to increase when a single box weight goes over 15kg, So its more economical to have two x 10kg boxes than one box weighing 20kg. You can play around with a shipping plan to find out what works best, just remember to delete it if you are not going to actually use it or it will sit in your shipping queue and count towards your restock limit, meaning if you are almost at your restock limit then you won't be able to send as much stock.

Account Health

The first task i do every morning is check my account health. I check to see if there are any red marks or warnings that could put my Amazon account into a deactivation or suspension.

There are a few things you should keep an eye on.

Performance - Account Health - Will show you your dashboard where you can check if you have any red markers which will identify if there are any problems in Customer Service Performance, Policy Compliance, Delivery Performance or any Product Compliance Requests.

If there are any new markers on any of these then you will need to click through and see what Amazon are asking you for. If you do get one and you are unsure what to do, put a post in the Facebook group and someone should be able to give you advice on the next steps to take.

If they are asking for a Plan of action or anything that doesn't seem straight forward then the best thing you can do is reach out to who will take a look at your problem for free and tell you the next course of action you should take. The worst thing you can do is spam Amazon with messages about the problem, as they will eventually just stop listening to you and block your account.

Another place I check daily is Performance - Voice of the customer. This is where you will get a clue if there is a problem with the products you are sending out. For instance a customer complaining that they only received 2 of an item when the listing says its a pack of 4 for example. This could mean that the listing has been changed to a different amount by the original lister, meaning your products are now incorrect. Yes people do this to get others off their listings, it's underhand and really annoying but best to remove your stock and move on.

Voice of the customer could also tell you if you've labeled something incorrectly, So being able to get that returned and changed before you get a bad review is crucial.

Inventory - Keep your inventory up to date and as clean and tidy as possible. By this I mean close and delete any listings that you're not going to be replenishing, out of stock listings can get you an Intellectual property violation even if you haven't sold that product for 6 months.

If you are not using Buy Bot Pro, which tells you whether the brand you are going to sell will give you an IP violation when you check the calculation, then you can check on this list However BBP is connected to The Get Unsuspended team meaning that they have access to 1000's of brands that could get you in trouble making that one feature worth the subscription fee.

Inventory - Inventory Planning shows Your Inventory Dashboard and is a place I check at least once a week. This will show your Inventory Performance Index which changes every Monday and goes up and down depending on a variety of metrics.

This number needs to stay over 500 for your account health to be classed as healthy (and for you to have unlimited storage limit of your specified maximum inventory size, everyones is different, depending on their personal metrics).

There are a few things you can do to improve this score, although these are not an instant fix and need to be done on a regular basis to be beneficial.

To improve your IPI score you need to improve your.....

Excess Inventory - Reducing excess (overstock) inventory. Amazon don't want to be a warehouse for your goods for longer than necessary.

FBA Sell Through - Improving your 90-day rolling sell-through by maintaining the right balance of inventory over the same time period. Try to only send in what will sell in 90 days, this may be hard to work out at first, so better to send in frequent shipments than one huge shipment that will sit in their warehouse for months.

Stranded inventory percentage - Ensuring inventory is buyable by fixing listings that are stranded. Keep an eye on your stranded inventory and make sure you are fixing any issues.

In Stock Rate - edited - Previously it was widely taken by the Amazon community that editing your SKU settings to say they were unreplenishable improved your IPI score due to Amazon thinking you were not restocking in time. However Amazon have said that this doesn't make any difference to your score. See pic below.

However you can still do this if you don't want to see them in your Restock inventory, so I have left the method here. Inventory Planning - Restock Inventory - Customize SKU settings on each SKU - then clicking "no" to Replenishable. Or you can do it in bulk by Customize SKU settings at the top of the same page.

These are some of the issues that new sellers need to keep on top of. Like I said before, Amazon is not hard, but it takes patience and hard work to stay motivated and grow this into a profitable business. If you can pivot and keep going when Amazon throw their new policies and hoops at you, then this is an Amazing opportunity to work from home or anywhere in the world with just a laptop and a mojito.

1 Comment

Nicholas Kirk
Nicholas Kirk
Jun 12, 2021

So many great tips, and a good idea of what to add into important daily/weekly tasks.

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