5 reasons why Amazon sellers struggle to make money
January 9, 2020
You filled in all the forms, found your suppliers, and started shipping to Amazon. You figured out how to make your listings competitive and sales are rolling in. You’re using Amazon’s FBA program too, so customer orders are being delivered with ease. Life is easy now so you can retire to the tropical island of your choice and keep the business running with an internet-connected smartphone.
Ok, maybe that last bit is wishful thinking.
What is getting in the way of that wish? Quite a few things actually, but we should split them into two categories:
Sales and marketing
Using the right keywords, taking great product photos, and using a combination of review solicitation and paid promotion are all part of sales and marketing activities. Driving sales is a critical part of being successful on Amazon and there is an enormous amount of fact and opinion published on all kinds of topics, such as optimizing your product keywords and growing your email list. Seller Central also gives you a bunch of tooling to execute these tasks as part of the Amazon Marketplace web services.
What about everything else? Well, if you look at the Amazon seller forums there is a near-constant cry for help from merchants trying to figure out how to do the things that Seller Central does not offer.
Some common struggles the Amazon seller community is facing:
Reconciling the payments Amazon sends you with the:
orders customers made
returns and refunds
shipments you sent to FBA warehouses
Managing profitability by SKU or ASIN
Tracking inventory available in each of the Amazon marketplaces
Deciding how much to ship to meet expected demand
Predicting the cash flow required for your suppliers to satisfy your customer demand
These are just some of the many questions being asked that haven’t really had great answers so far. But a solution is coming. Over the last few months, Amazon has been piloting, then beta testing and now starting a slow but steady rollout of the Amazon Marketplace Appstore. At first, Amazon was just letting merchants build their own tools and connecting them to their own stores, but now software developers are releasing a whole new breed of these apps to help you with these previously unhandled issues.
The Appstore is divided into and organized by categories that feature a whole host of apps for all tasks related to selling on Amazon, from Listing, Inventory and Order Management, and Shipping Solutions, to Analytics and Reporting and Accounting and Tax Remittance.
How do you find this magical store in Seller Central?
It’s actually pretty easy. Log in as you normally would and look for the navigation bar at the top of the page.
Once you click ‘Discover Apps’ you can browse by category or search for a particular app.
You will notice just how many apps there are to choose from, and the sheer variety of the functions they provide. For example, the Inventory and Order Management category is awash with applications that pledge to make the sellers’ life easier.
Once I find an app that seems to fit my needs, how do I download it? What is the risk if it doesn’t work out for me?
Getting the app is easy. You click to connect to the app vendor right from within the vendor’s profile and then you authorize it with a button in the store, as well:
In terms of risk from access to your Amazon store data perspective, you can remove that pretty easily. The agreement with each individual app vendor will determine how much your financial risk is though. If you are uncertain, look for apps that will let you try before you buy, apps with no long lock-in, or no big upfront cost.
Which app do I need?
This is obviously the hardest question to answer. Start with a list. Like any other business operator, you likely need lots of things to help get your job done. Once you have that list, change the question slightly to be “what do I need first?”.
Here is a sample list for you to work with that you can reorder, add to, or modify as needed:
How do I know how much inventory I should ship to Amazon?
How do I track my Amazon sales and credits in my accounting system?
How do I manage buying or making stock and then track shipping it to the FBA warehouse(s)?
What are my available to sell inventory quantities in each Amazon marketplace?
How do I generate the necessary business documentation to back up what is happening in Amazon sales so I can survive an audit?
How do I know if a product I am selling on Amazon is profitable once I take all my costs into account?
How do I keep track of thousands of SKUs in multiple marketplaces without making errors that cause my products to be delisted by Amazon?
How do I track individual orders and returns versus Amazon charges so I can dispute them if needed?
How do I connect Amazon information in with the rest of my business if I use other sales channels?
Lots of great applications have been built to address some of these issues. So whatever your problem is, there is now an app to help you overcome it.