Amazon is the one of the biggest internet-based retailer in the world, the largest internet company by revenue and enjoys 4th position as the world’s most valuable public company. It has a strong customer base which keeps on growing at an extremely fast rate but like every other marketplace there are some challenges associated with selling on Amazon. We have compiled a list of 6 major challenges Amazon sellers face on a regular basis.
1- Catalog System
Amazon uses a catalog based system where sellers are required to enter the product UPC to find out if there is a catalog page matching the product details. Sellers should not create their own catalog page for a product for which a catalog page already exists on Amazon. It is quite unfortunate that sellers have no control over images, titles and descriptions, if they use an existing catalog page but if you wish to create a new ASIN, you will have full control over the content of the catalog page.
2- Performance Targets
Amazon has set-up performance targets for sellers to establish a safe shopping environment for buyers. Failure to meet these targets could result in immediate suspension and termination of selling privileges.
Amazon requires the sellers to maintain an order defect rate of less than 1%, pre-fulfillment rate of less than 2.5% and late shipment rate of less than 4%. Amazon uses customer metrics which measure seller performance and notify them if they are off-target.
3- Restrictions and Policies
Every seller is advised to carefully review the restricted products list on Amazon. If any of your products violate Amazon’s policy, they are allowed to take actions such as terminating selling privileges, destroying inventory in fulfillment centers etc. Learn more.
Amazon, like every other business, looks out for the best selling products in the market and once they partner with a brand, the product might become restricted to third party sellers, or worse, sellers can’t compete with the Amazon prices for the same product.
4- Extremely Competitive:
Many times, sellers buy high volume products from manufacturers of the same brand and get into a listing war by continually re-pricing their products to a low price which leaves behind a very small profit margin. Furthermore, unethical sellers try to sabotage other seller’s business by disguising as fake buyers and leaving negative feedback.
In many cases, Amazon sellers have found themselves suspended for factors beyond control, hence facing a loss in millions and losing a business overnight.
5- Permissions To Sell
Many big brands are restricted on Amazon, so you’ll have to contact the specified brand to sell their products on Amazon. There are more than 20 categories open to all sellers, but there are at least 10 categories available only to professional sellers.
For some categories, Amazon requires you to have a professional account to be able to apply for approval to sell in those categories. New sellers should take out some time to learn the policies and system process to avoid any hurdles.
6- Feedback War
This challenge can be avoided simply by careful planning and providing high-quality customer service. You have to use the most accurate product category and provide a detailed product description for buyers. Always keep an eye on the buyers you are selling to and if you find a fake order(s), immediately report the buyer to seller performance and seller support.
Be extremely professional and polite to buyers, any aggressive word exchange will (mostly) negatively impact your seller account. A 0-2% negative feedback rating is great but more than 5% will land you in serious trouble with Amazon.
We know these challenges can be a handful, but for a majority of online sellers it’s worth the effort. And of course, we are always here to help you with all your selling needs, click here to learn more.