Here are some of the common challenges sellers encounter when starting to sell on Amazon:
Selling your product for the first time
In recent years, it has become more and more demanding to join and start selling on amazon. As the platform continuously accepts new sellers who do not always abide by the rules, Amazon has to become more strict in accepting who can sell, what they can sell, and how they sell.
Potential sellers must receive Amazon’s approval to sell products in most categories, and the list of categories requiring approval keeps on growing. And it isn’t that simple to get the approval. On the brighter side, new sellers on Amazon have automatic approval to sell in a few categories as they establish their Seller Account.
Sellers only get paid every two weeks
Amazon pays their third-party sellers every two weeks. The biggest challenge here is you’ll need to issue the money for inventory before you start to catch any income from the very same stock.
This can easily be one of the biggest challenges that new Amazon sellers will come to terms with. Sellers may be making a nice profit from their sales, but they need to maintain cash on hand to avoid messing up any inventory order.
Being the vast platform Amazon is, it gives out the opportunity to its sellers; thus, millions of sellers have joined the platform. The competition on Amazon can be cruel since all sellers compete for top exposure in the search results.
This competition makes it hard for newcomers to launch their products. Customers are inclined to choose products with established names, customer reviews and ratings over newly introduced products with low reviews.
As mentioned earlier, competition on Amazon is cruel, and this competition tends to drive prices down. Most sellers who are having a lot of competition respond by lowering down their prices.
Competing based on pricing is a horrible idea because there is always a seller willing to sell for less. This can lead to cost-cutting in the manufacturing process, negative reviews, lower-quality products, leading to lower sales.
The competition on price can lead to thin profit margins that make it difficult for new sellers to continue selling on Amazon. In desperation, sellers are willing to sell their products at a loss in order to gather customer reviews to be on top of the search ranking in hopes of establishing sales velocity.
Reviews and Seller Feedback
Product reviews and feedback are key elements in the decision making of Amazon customers. New sellers and customers may not understand the difference between the two.
Product reviews are the opinions or feedback of customers for a specific product, regardless of who the seller is. Seller feedback is all about the seller. This can indicate the quality of customer service a seller provides. This should not include any issues related to the product.
New sellers are challenged here because most of Amazon’s customers don’t find time to leave a review unless they have an unpleasant experience with the product.
Restrictions in Product Categories
Amazon has been strict with their sellers that they allow selling products in specified categories. Amazon made this for the safety of their customers and as an attempt to lessen the number of counterfeit products sold on their platform.
Small sellers may have difficulty in getting the approval to sell in some categories. In most cases, sellers need to purchase inventory in order to have the documentation required by Amazon to be approved to sell in a specific category. That can mean that sellers need to pay for inventory that they won’t sell if they don’t get approved.