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Private Labeling 101: Common Mistakes Made On Amazon and How to Avoid Them

With over 304 million shoppers on Amazon at the end of 2015, (according to a recent report on Statista.com), it’s not hard to understand why sellers get excited about the business opportunities available on Amazon’s vast marketplace. In fact, in 2016 alone, there were over 100,000 Amazon sellers with sales of more than $100,000 according to a recent release on Business Wire about Amazon. Not surprisingly, these numbers are continuing their upward trend.

However, selling on Amazon is competitive. As new sellers continue to pour in and Amazon keeps tightening their policies, the need for diligence and attention to detail is more important than ever. Today we want to outline some of the most common mistakes sellers make on Amazon, with some quick tips on how to avoid them.

Inventory Issues

There are two common ways that issues with inventory can take shape. The first is running out of stock before you’re able to fulfill your orders. The implications of this are huge. Selling products on Amazon is like driving a car. You hit the accelerator through various tools (such as PPC ad campaigns) to drive rankings. The more shoppers click through to your listing or actually make a purchase, the more reviews you get and the higher you will organically rank in future searches. When you go out of stock, it’s like slamming on the brakes. In an instant, all of your momentum disappears.
Another common inventory mistake is delayed delivery and costly shipping prices. Most Amazon customers are used to receiving products quickly and without extra fees, so they look for items that are Prime eligible or Fulfilled by Amazon. It’s not uncommon for shoppers to avoid products that have high shipping fees and long delivery wait times.

How To Avoid Inventory Issues

The obvious answer for the first problem is to develop a reliable forecasting and tracking system so that you never run out of inventory. If you’re getting close to running out of stock, make a note of it on your product page so that customers know to act quickly. Far too many new sellers are surprised to find out how quickly inventory can sell on Amazon. If you make the mistake of overselling, a painful chain reaction can begin that often leads to account suspension.
If your company is simply unable to offer quick shipping at a low price, don’t assume that your business will flop to other competitors that offer Prime or FBA. If you’re selling a stellar product and you follow the other recommendations in this article, the sales will come. Just do your best to offer reasonable shipping fees, and above all else, work tirelessly to fulfill the order by the promised delivery date. Expect poor reviews if your product is not delivered on time!

Optimizing Your Product Page on Amazon

A sloppy product listing can be a plague to new business growth. It’s not uncommon for sellers to invest incredible amounts of time and money in driving traffic to their Amazon listing without doing an adequate job of showing the customer why they should buy the product in the first place. Muddled product descriptions, low quality product photos, titles that are too long or too short, and improper use of keywords throughout the listing are all likely to hinder sales.

How To Avoid Mistakes on Your Product Page

How easy it is for a buyer to find your product depends on how carefully you’ve outlined your product page. Therefore, it is essential that your product information be complete and accurate. Since they can’t rely on physical touch and sight, customers depend on your product information to ensure they’re getting exactly what they want.
Avoid a poorly-optimized listing by thinking like a customer and taking advantage of every available space you have to explain what is so amazing about your product. For example, your five bullet points could provide answers to the first five questions you think potential customers would have when looking at your product. Use the description section to outline relevant product details, but don’t just copy and paste a bulk of text.
Use capitalization, bolded or italicized text, and photos to help shoppers skim for the information they need. Your title should be clear, concise, and descriptive. Using a few select keywords in your title can also help drive traffic to your page. In fact, carefully crafting a few select keywords throughout your page is one of the best ways to optimize your listing.

And don’t forget about pictures and reviews! You should provide 8-10 high quality images and consider creating a professional video that shows customers even more about your product. Remember that product photos are the first thing customers see on their search results page. The second thing most shoppers immediately look for is reviews, which we’ll talk about next.

Dropping the Ball with Customer Reviews and Inquiries

Buyers turn to reviews because they want honest feedback from their peers. A product listing with too few reviews can spell disaster for sales. Some sellers are afraid of negative feedback so they don’t prioritize asking customers to write reviews. Other sellers don’t do a good job of replying to negative feedback and simply leave bad reviews sitting on their listing. Many sellers don’t realize that Amazon’s Seller Performance and Product Quality department tracks customer feedback. They’re looking for both quality and quantity of reviews, as well as how quickly you respond to customer inquiries.

How to Leverage Customer Feedback

When it comes to customer inquiries, simply get into the habit of replying quickly or use an automated system to help you provide rapid responses. Every seller on Amazon has 24 hours to respond to each customer inquiry it receives, no matter the time of day or day of the week. When you take more than 24 hours to answer, you can get dinged by Amazon and too many dings may result in your account getting suspended.
An automated system can be useful for gathering customer reviews as well, especially if your sales volume skyrockets. Just make sure to monitor reviews for negative feedback and reply quickly to any 1-3 star reviews. Honest, down-to-earth responses to negative feedback can go a long way in boosting confidence for potential buyers who may read that review on your listing.

Forgetting to Collect Sales Tax

This is a mistake made by novice and experienced sellers alike. Sellers that store inventory in another state (or through an Amazon fulfillment center in another state) will also have a sales tax nexus in that state. In other words, you will be required to collect sales tax on all sales made to buyers in any state where you house inventory.

How to Avoid Year-End Tax Headaches

For a small fee, Amazon offers the service of collecting state tax on your orders. You can sign up for this service in your Seller Central account. Just remember, you are responsible for remitting your sales tax payments, not Amazon. There are also various online sales platforms that can help you calculate the correct amount of sales tax to charge. Make sure you check with your state’s taxing authority for up-to-date tax rates.

Karen and Neil Gwartzman have been sourcing, importing and private labeling products for big chain stores across the globe for the last 35 years. The growth of Amazon, Ebay, Shopify and other online marketplaces in the last fifteen years has further increased the scope of their expertise, and today Karen and Neil teach budding entrepreneurs all over the world how to create profitable private label businesses online. Karen and Neil truly believe that when equipped with the right tools, resources and coaching, anyone can enter the eCommerce world and make a killer income private labeling products. Visit them at The Private Label University

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