I’ve run Amazon FBA businesses since 2013 and have experienced, and overcome, countless difficulties and challenges throughout that time.
It may surprise you to learn that right from setting up your Amazon Seller account, to creating your listings, to managing stock, to dealing with customer enquiries, it’s hard work. This is not eBay.
However, for all of Amazon’s (often frustrating) quirks, along with the challenge of sourcing & marketing new products, the FBA program stands as an incredibly powerful platform for anyone looking to sell physical products online. In other words, it’s well worth the hassle.
Here’s the hardest parts of running an FBA business.
1. Setting Up Your Account
Yes, that’s right. Simply setting up your Amazon FBA account can be a nightmare.
I experienced a lot of issues in setting up and verifying my FBA account, and spent hours on the phone and writing emails to Amazon Seller Support trying to resolve them. I know several other Sellers also encountered similar issues in setting up their accounts, too.
Yet, rather confusingly, I also know other Sellers who managed to set up multiple accounts without running into one single snag. It makes no sense!
Usually the problems start to occur shortly after setting up the account. Some of which include:
- Being asked to provide several forms of personal identification (which aren’t standard for everyone).
- Bank account details being rejected.
- Seller accounts locked due to trivial input differences such as “Company Name Ltd” and “Company Name Limited”, or a slight (but equally valid) variation in the company address format.
- Difficulties convincing Amazon that your company exists, or that you belong to it (even when it’s clearly listed on the HMRC government website).
- Requests for signed, letter-headed company documents granting the account holder to operate an Amazon Seller account.
- Being informed that your seller account is linked to “another seller account” which, for an unstated reason, means that you’re not allowed to open an account.
- Inability to change an account type, or amend any personal details, once they have been selected.
- Being asked to list a sample product that is representative of what you plan to sell on Amazon before the account is opened. Which is awkward if you haven’t sourced the product yet.
This list isn’t extensive. And to make it worse, it’s impossible to find out exactly what triggers all of the above problems.
We can however speculate on the cures and causes for many Amazon Seller account setup problems. So if you’re currently pulling your hair out trying to set up your Amazon account, check out my post:
2. Sourcing Your First Product
When you start out as an Amazon FBA Seller you’ll need to source products from somewhere. For most of us it’s via Alibaba.com.
At first you may feel slightly uncomfortable using Alibaba. Granted, it was rife with scammers, once upon a time. However, nowadays, if you follow the right steps it’s probably a lot safer than sites you’d casually buy from without giving it a second thought.
An Issue Of Trust
There are two main reasons you should have faith in Alibaba:
- Suppliers are vetted, and on-site visits are made to ensure legitimacy. You know who you’re buying from.
- Buyers benefit from “Trade Assurance” — a free service offered by Alibaba that provides 100% payment protection from selected suppliers. Most of the suppliers I’ve dealt with have offered this as standard.
I think the main barrier preventing Western buyers fro trusting Alibaba sellers is the business culture and “rawness” (for lack of a better word). You’re buying directly from the source, without a glossy veneer (e.g. a branded storefront) to interface with. The level of written English is basic. And it’s not uncommon to be contacted out of the blue via WhatsApp, e-mail, or even Facebook, from a supplier that you made an enquiry with. It’s outrageously informal at times.
My advice to you is to remain safe and vigilant on Alibaba — but to embrace it, too. I’ve established strong relationships with overseas factories that I trust. And it all started by taking the plunge at the very beginning.
Check out: How to Safely Source Products via Alibaba
3. Creating A USP
One of the hardest and most important parts of running a successful Amazon FBA business is setting yourself apart from your competition.
Many FBA Sellers fail to create listings which stand out alongside established, similar items on the market. This problem often arises when multiple sellers take the “private label” approach: branding a popular existing product and competing for the same buyers.
Ideally you want to find your own space on Amazon.
Setting Your Products Apart
In addition to the above suggestions, your product should offer something different. Go that extra yard to make your product ever-so-slightly better than the competition. Plus, adding a little bit more complexity to your product makes it more difficult for someone else to copy.
Here’s some suggestions:
- Offer a free warranty on your product (or one that’s longer than your competitors’).
- Provide something free with your item (e.g. a protective sleeve or carry case to protect the product from scratching).
- Bundle two or more of your related products together to form a set (essentially a different product with a higher price tag)
Try to be inventive as you’ll always struggle to succeed at merely copying an established Amazon listing without offering any form of advantage.
4. Tough Competition
The Amazon FBA program provides sellers with the opportunity to scale and sell worldwide. But competition is fierce.
Many niches are saturated with established sellers, with excellent ratings, armed with a bankroll large enough to reduce their margins and out-spend you on product marketing.
What can you do to compete with that?
Raising The Stakes
If you find yourself in a situation where you’re struggling against a direct competitor, then I recommend that you:
- Improve your product description and images
- Utilise Amazon Adverts to increase exposure
- Register a trademark, and then use that to create A+ adverts
- Raise your marketing efforts outside of Amazon
- Use tools to help increase positive feedback
- Adjust your price (but keep in mind that a competitor may be able to match, or better your offer)
5. Scaling Up
Once you’re making some sales you’ll want to scale up and increase your revenue. There’s a number of different ways you can do this — but it requires a lot of work.
Expanding Your FBA Business
Here’s the easiest ways to expand your FBA business:
- Introduce new products: aim to launch one new product at a time. Start out with the one you believe will sell the most, then feed in new (and perhaps ‘riskier’) products afterwards. I use this strategy myself.
- Manage your offers: provide discounts, or lower the price, of slow-selling items to increase cashflow. You might also consider raising the price of your better-selling items — or do both. All the while you’ll collect reviews and feedback.
- Sell to more countries: once you’ve sold some items in your home country, you’ll be eligible to sell in others. If it’s within your continent, you often wont need to send the products there, as Amazon will transport/fulfil them for you.
- Optimise your Amazon adverts: by refining your Amazon ads campaigns you may be able to increase the popularity of your product, as well as gain more sales momentum and reviews. Learn more about Amazon advertising (coming soon).
- Improve your product exposure from outside Amazon: the top FBA sellers do not only rely on Amazon advertising. There’s several ways you can increase the exposure of your Amazon listings using social media, PPC Advertising, and Search Engine Optimisation. Learn more about sending traffic to your Amazon listings.
6. Managing Stock
Another challenge you’ll face as in your growing Amazon business are stock shortages. The more units you sell per month, the more you’re going to need to invest to meet demand.
One of the problems I’ve encountered on one of my own Amazon business — the PalioETT table tennis brand — is running out of stock around the Christmas period.
It sounds like an easy problem to solve, right? Surely I should just buy more stock? I’ll explain.
Stockpiling & Storing Items
Buying more stock is of course the obvious solution to any stock shortage. However, my issue is that the China-based factory I source from is relatively small and cannot produce enough of our products to meet the Christmas sales demand. In addition, the Chinese New Year means that at the start of the new year orders are not taken — causing additional delays.
To ensure that my company does not lose sales and momentum on Amazon, we’ve adapted our stock management strategy by:
- Not taking a salary: we’ve sacrificed having more money in our pockets in order to reinvest as much money as possible into new stock.
- Buying more units: we’re purchasing more units on every order throughout the year; much more than we need held at Amazon until November time when the sales volume increases.
- Storing stock: to avoid paying expensive Amazon fees throughout the year, we’ve rented a storage unit to hold our equipment until we send it on to the Amazon FBA centre in time for Chritamas.
While this strategy will not apply to many FBA businesses, it highlights that there will be times where you’ll need to adapt to ensure that your popular products remain in stock.
7. Editing Listings
As ridiculous as it may sound, editing your listings is nowhere near as easy as it should be.
Let’s suppose you wanted to optimise your product listing by adding some new product images. You’d assume that uploading them would work, right?
Wrong. Uploading new content to your listing rarely updates automatically. So for every product, in every country you sell, you’ve got to open a case with Amazon detailing the changes you wish to make. Then you’ll need to wait up to 24hrs for them to accept them (which they aren’t obliged to).
There’s also language barriers to contend with. Unlike when you initially list your product abroad — where English descriptions are automatically translated by Amazon — it does not re-translate for subsequent updates. This creates a lot of additional translation work.
Needless to say I’ve spent weeks working on my listings, and dealing with product discrepancies between different marketplaces.
Note: I believe it becomes harder to amend your listings over time because Amazon wants to prevent sellers from ‘carrying’ feedback over from one product to an entirely different one.
Reducing Product Page Admin
- Start out on the right foot: save yourself unnecessary work down the line by perfecting your product descriptions from the outset. I recommend using Scribbes to ensure you pack in as many of your keywords as possible, and to source a professional photographer for the images.
8. Dud Products
There are unfortunately times where you need to accept that a product you invested in isn’t going to generate you a profit.
So at what point should you label your product a ‘dud’ and cut your losses?
When To Cut Loose
I’ve personally cut loose of products for one or more of the following reasons:
- Customers don’t like it: having popular product is fundamental to your success on FBA. If customers consistently slate your product (i.e. the quality is poor, it doesn’t work, there are much better alternatives), then you won’t succeed. There’s no amount of marketing or branding that’ll save it.
- No profit margin: there’s a ceiling on what customers will be prepared to pay for any product. There’s only a certain amount of good presentation you can do to boost that price point. If you discover that your product isn’t profitable after factoring in all Amazon fees and other costs, then you might have to call it quits, or take that product outside of Amazon.
- Money can be better utilised: when working on a tight budget there can be times where concentrating your funds on higher ticket items yields better results. Learn more from my post: How To Run An FBA Business on a Budget.
9. Underhanded Tactics
The more successful you become on Amazon FBA, the more people will try to bring you down. There’s a lot of underhanded tactics other sellers will use against you. It’s tough out there.
Here’s some of the setbacks I’ve experienced:
- Malicious reviews: when you’ve been selling for a while, a fake review stands out like a sore thumb. On one occasion I received multiple one star reviews within a two day period immediately after making it to the first page of my key search term. Fake reviews are sometimes blatant enough to mention a competitors’ product with a line such as: “CompetingProduct is much better in my opinion”. Others are more subtle. Either way, Amazon rarely removes bad feedback unless they can 100% prove that it’s malicious.
- Other people listing your product: unless you are brand registered with Amazon, you don’t have the rights to prevent another seller from winning the buy box for your product. People will often pose as a seller of your product and then send out cheap replicas — or another product entirely — effectively ‘piggybacking’ from your listing. It’s a nuisance to get them removed.
- Listings being changed: similarly to the above, product listings can be changed, if Amazon accepts the edits. Someone once managed to change one of my main product images. It was of such poor quality that it reduced my sales — so I had to open multiple cases with Amazon to get it changed back. It took several attempts to resolve.
- False accusations: Amazon always protects the customer if they make an accusation about a seller. On one occasion a ‘customer’ reported that my products were counterfeit. Ironically, the product in question was my own creation, so it couldn’t possibly be fake! Nonetheless that didn’t stop Amazon from freezing my listing, requesting that I provided several documents to prove otherwise. I lost sales during that period.
10. Difficult Customers
It’s inevitable that you’ll come across some difficult customers as an Amazon seller. While Amazon protects buyers with the standard 30 day return period, free shipping, and free returns — some customers are still very difficult to please.
The trouble is, even if you feel that a customer is being unreasonable, you can’t afford to risk receiving negative feedback on your listings. Always remain calm, courteous, understanding — and bite your tongue if you need to.
- Delivery complaints: it’s Amazon’s job to send out items to customers in a timely manner. But customers will often come to the Seller to complain. This is OK because you can politely inform them to contact Amazon directly, and refer them to the ‘Where’s My Stuff?’ page. Thankfully negative feedback containing complaints about Amazon’s fulfilment won’t usually make it to your product listing.
- Return requests: I’m often asked to initiate a return after the standard 30 day period has elapsed. It could be months after the purchase date. These situations are very awkward because I want the customer to be happy, but I don’t want my business to be taken advantage of.
For all complaints, I firstly emphasise with the buyer. Then I ask for evidence of the problem (usually in the form of photos), and a detailed description. Personally, I deal with every request on an individual basis and offer either a 25%, 50%, or 100% refund — or send out a replacement from FBA free of charge. In almost every case I give the customer the benefit of the doubt.
Lastly, it’s worth noting that there’s numerous rapidly-changing, complex tax laws for FBA Sellers to keep up to date with.
Europe, for example, has started implementing new rules which govern how tax should be paid by anyone supplying products outside of their home country. You can learn more about tax laws for international Amazon FBA Sellers here: 5 Things FBA Sellers Need To Know About Sales Tax.