7 Pitfalls of Amazon FBA
7 Pitfalls of Amazon FBA
When you sign up with Amazon as an Amazon FBA seller, there are many opportunities that can be enjoyed. You can use Amazon’s advanced e-commerce tools to run your business smoothly and sell products with ease. But, there are also many pitfalls that you have to avoid to successfully run an online business and manage your inventory. Amazon offers many sellers a way to earn extra income and take care of their inventory needs through the Amazon FBA program.
One of the most common pitfalls of Amazon FBA sellers is their lack of knowledge of the services offered at Amazon fulfillment centers. Fulfillment centers are places where Amazon ships physical items for customers. The services offered at these centers are essential for every type of business. Amazon offers a wide range of services from grocery stores and department stores to electronic merchants and individuals. FBA sellers should become educated about all the services that are offered at these centers so that they can properly manage their inventory needs. This will prevent them from wasting time and resources on inventory that won’t generating profits.
Another Pitfall for FBA sellers is that they often don’t understand Amazon’s data collection policies. Amazon collects information about each transaction that goes through its fulfillment centers. This information includes the date, time, item name, supplier name and address. If Amazon isn’t legally allowed to sell this data to third parties or if they are charging too much for the information, these sellers should look into Amazon’s contract guidelines or hire a professional FBA service.
Amazon FBA sellers also encounter problems because their inexperience in managing an e-commerce business prevents them from receiving adequate training on key elements of managing their inventory and fulfillment. Amazon provides training that teaches sellers how to better manage their inventory, marketing and customer service. They also provide resources for managing costs and reaping profits. However, there is no training available for managing the Amazon Web Services marketplace itself.
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Interpret Amazon Web Services Information
Some Amazon FBA sellers have discovered that Amazon’s Web Services fulfillment center leaves some of the most valuable information out of their control. This information includes information regarding peak customer traffic and order statuses. Amazon takes great care to only fill its warehouses when there is a proven high demand for its products. However, many e-commerce business owners do not have the knowledge or resources to access this type of data and have incurred heavy losses because they did not take the time to learn how to interpret Amazon’s Web Services information.
A final common pitfall for Amazon FBA sellers is that they engage in general discussions on sales, shipping and profitability without taking the time to understand Amazon’s process. For example, when sellers discuss shipping percentages, they may not be aware that these percentages apply to all products coming from a single source. In addition, when sellers discuss profitability, they should also be aware that it is a percentage of the sale price of each product, not an overall profit.
Amazon’s FBA allows for easy tracking of your Amazon storefronts. You can see statistics on what percentage of your orders come from your Amazon main store as well as your affiliate stores. But, there are still some elements of Amazon FBA that make it unique. The first is the ability to offer free and unlimited services to buyers. It also allows a seller to choose whether or not to allow feedback removal and shipping inventory issues. This removes the risk of being held responsible for the actions of buyers who have ordered products but have not yet received them.
The Internet has opened up possibilities that were unimaginable just ten years ago. Today, we have more options than ever before when it comes to fulfilling the order needs with the assistance of the web. However, like any other service offered online, FBA has its own pitfalls. When sellers fully understand the advantages and disadvantages of Amazon FBA, they will reap the benefits by selling on Amazon and avoid the pitfalls that many faced in the past.