Blog Post

7 Amazon Seller Mistakes You Should Avoid

by: Austin Mahaffey September 13, 2021

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In the world of eCommerce, Amazon’s marketplace must be an integral part of your business strategy. Because if you’re not selling on it, your competitors will be.

But there’s a right way and a wrong way to sell on Amazon.

The right way will win over new customers, grow your business, and position you for long-term success. The wrong way will cost you money, hurt your reputation, and potentially get you kicked off the site.

To help you avoid the most common pitfalls, we’ll discuss the most harmful Amazon seller mistakes and the strategies you can employ to avoid them.

Amazon Seller Mistake #1 – Improper Listing Optimization

Much like how your website needs to be optimized for search engines, so do your product listings. Optimizing product listings helps you maximize conversions, improves search results, and drives profitability.

The good news is that Amazon’s search algorithm (A9) follows a more straightforward formula than web-based SEO algorithms. That’s because A9 has one chief focus—connecting buyers and sellers. Because of this, your listing optimization needs to help potential buyers find and then understand your products.

Despite its theoretical simplicity, far too many sellers make easily avoidable listing optimization mistakes. As Search Engine Journal notes, the most common of these include:¹

Not maximizing indexing opportunities
Incomplete keyword research
Keyword stuffing titles
Failing to incorporate customer reviews and questions
Eschewing videos
Poor image utilization

So, what are some best practices?

To satisfy A9, you must focus on two key ideas: Relevance and Performance.

Relevance – Keywords are essential for ranking. You not only need to include relevant keywords on the page, but you must also focus on including them in:
- The product title
- Backend keywords
- Product description and bullet points

Performance – The way your pages look and how customers interact with them impacts rankings. Page elements you should play with include:
- Product pricing
- Customer review
- Product images
- Product video

Amazon Seller Mistake #2 – Violating the Rules

When you join, you agree to abide by Amazon guidelines and regulations. Failure to uphold Amazon’s policy can result in stiff consequences, especially since a seller’s actions can negatively reflect on Amazon’s reputation. Should that occur, Amazon will not hesitate to shut down your seller account, thus preventing you from reaching a massive consumer base and cutting out a major revenue source.

Although Amazon judges rule violations on a case-by-case basis, common reasons why sellers have been banned in the past include:

Product quality issues – Amazon’s success hinges on consumer confidence that when they shop on the eCommerce site, they expect to receive a high-quality product. Repeated failure to satisfy those expectations will inevitably lead to consequences. Common quality issues include:
- Selling counterfeit items
- Selling cheap items
- Selling prohibited items
- Violating copyright laws
- A lack of certification
Shipping issues – Similarly, Amazon has a reputation for ensuring that products ordered on their website arrive in a timely manner, and arrive as advertised. Late shipments or canceled orders are frowned upon. Learn more about Amazon direct shipping on our website.
Poor customer reviews – Often, the first two issues impact this one. But a lack of communication between the seller and the customer only exacerbates these problems. Should a seller receive enough negative reviews, it can easily result in a ban. Similarly, integrity matters. If you’re caught buying customer reviews, you’ll be immediately kicked off the platform.
Violating listing guidelines – There are rules for how to properly list items on Amazon. If your product details page violates the rules or provides misleading information, Amazon may terminate your page.
Having multiple accounts or selling an account – When selling on Amazon, you must do so only through a single account. And it has to be yours. The company expects honesty about who you are, what you sell, and who you sell to. Selling that account violates the contract you entered into with Amazon.

Before you start selling, be sure to thoroughly peruse Amazon’s Program Policies page and then comply with your seller agreement.

Amazon Seller Mistake #3 – Directing Shoppers to Your Website

While this could technically fall under the previous category of Amazon guidelines, it deserves its own spot.

Put simply, Amazon does not welcome competition. Well, it does—but it doesn’t allow you to leverage its site for personal promotion or to drive sales away from the site. While operating on Amazon may decrease your opportunities to retarget or push branding, that’s a tradeoff you make to access its massive shopping base.

Occasionally, sellers will list their website store’s URL in the product listing. That’s a clear Amazon policy violation and can result in a ban. Similarly, if you use Amazon’s name, trademarks, or sales such as Prime Day on your website, but do not have links that lead directly to Amazon, you can expect the site to take swift action.

Amazon Seller Mistake #4 – Failure to Utilize Amazon PPC

Amazon grants sellers access to a built-in pay-per-click (PPC) advertising system. This is a tool that far too many sellers fail to take advantage of. But this represents an opportunity for you to create a competitive advantage.

For a modest fee, you have the means to instantly get your product in front of customers. In addition to a rapid market entry, Amazon’s PPC dashboard makes it easy to measure and track results, it pairs well with other marketing channels, and it offers a wealth of actionable consumer data and insights. You can use Amazon PPC to boost sponsored products to the top, drive sales, and improve your rankings.

This can help with several specific aspects of selling:²

Driving increased traffic to holiday sales such as Black Friday, Cyber Monday, Christmas, and Amazon Prime Day.
Driving brand awareness and cross-selling complementary products in your product catalog.
Launching new products or helping products in competitive categories stand out.

Amazon Seller Mistake #5 – Over Ordering Stock

A common seller concern is that they’ll run out of stock in the case of a demand surge. After all, who wants to run out of product when customers are clamoring to get their hands on it? Also, many sellers hope to reduce their per-unit cost by ordering in bulk.

If you handle fulfillment on your own, how much stock you carry is up to you. Being overstocked may impact your cash flow, but that’s your business decision.

However, if you’re a seller whose products are Fulfilled by Amazon (FBA), having too much stock can cost you. So, what is Amazon FBA? An Amazon FBA seller pays for Amazon to stock their items. When inventory is collecting dust on shelves, you’re losing money instead of accruing it. Also, if items sit in an Amazon warehouse for more than a year, there are additional fees.

Sellers should always seek to maintain an inventory level that falls into the Goldilocks zone; not too little, not too much—just right. And inventory forecasting, particularly with the help of automated software, can help you accomplish that.

As Harvard Business Review notes:³

“Advanced machine learning and optimization algorithms can look for and exploit observed patterns, correlations, and relationships among data elements and supply chain decisions – e.g., when to order a widget, how many widgets to order, where to put them, and so on. Such algorithms can be trained and tested using past data. They then can be implemented and evaluated for performance robustness based on actual realizations of customer demands.”

Consider using automated tools to manage your inventory forecasting. Not only will this provide an accurate picture of current and future needs, but you’ll also be able to put those hours you spent managing stock toward other critical areas of your business.

Amazon Seller Mistake #6 – Forgoing Sales Tax

When selling on Amazon, you should include sales tax in the pricing. Otherwise, you’ll be the one who has to pay for it.

For a nominal fee, Amazon makes it possible to collect state tax on all of your orders. Otherwise, you may reach the end of the year, only to discover that there’s a significant unfunded liability that must be paid out of pocket and that eats at your margins.

To avoid this issue, fill out the “Tax Settings” in the Seller Central right after signing up for the account.

Amazon Seller Mistake #7 – Poor Customer Service

Even if you’re an Amazon FBA seller—which means Amazon will handle a significant portion of returns and customer service—it’s still important that you respond to customer inquiries and reviews. If you take more than 24 hours to respond, Amazon will take note, and it will be a mark on your account.

Similarly, it’s important that you read, respond, and then react to customer feedback. This is not only good customer service habits, but it allows you to improve your product and services. Negative feedback can be especially useful for a business that wants to continuously optimize.

Sell on Amazon the Right Way

There’s no doubt that significant competition and saturation makes selling on Amazon difficult. Practically every B2C business has made it a central aspect of their success strategy. Therefore, you can’t afford to make mistakes that jeopardize your chance to compete. To learn more about Amazon business services, visit our website for more information on what is Prime Wardrobe or a breakdown on Amazon moments.

Do you need help crafting an Amazon strategy that sells?

Here at Power Digital, we have the tools and expertise to help you build a custom Amazon digital marketing and growth strategy. Together, we can instill practices and systems that drive growth.

What does that look like? Reach out today to see what we can do for you.

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