Consistently hitting healthy margins on Amazon can sometimes seem impossible. 

On top of rising fees, algorithm changes, and increased shipping costs, running an Amazon business can feel like an uphill battle. 

But these changes mean it’s more important than ever to stay on top of changes that impact your bottom line. After six (going on seven) years selling on Amazon, I can honestly say I’m always learning new ways to cut costs and optimize numbers. 

So in this blog, I’ll discuss ten seller mistakes that kill healthy margins, and what you can do to avoid them.

Not Putting Data #1

This one’s #1 for good reason. 

An Amazon business simply does not work, and your profits suffer, if you’re not tracking data. 

Data helps steer business decisions, including how marketing dollars are spent, managing inventory, and increasing your product ranking once your product goes live, to name a few. 

But what data should you be tracking? All of it, including (but not limited to) the following:

• Gross and net sales 
• Cost of goods Sold (COGS)
• Shipping Costs
• Ratings and feedback
• Advertising spend
• Advertising costs of sales (ACOS)
• Cash flow
• Website Traffic
• Listing Traffic 
• Customer Demographics
• Keyword performance
• Account Health 
• + More

Some of these metrics, like website traffic and customer demographics, can be found on nearly every social media platforms (Instagram, TikTok, YouTube), as well as website builders like Squarespace and Wix. 

Other metrics, including gross and net sales, ACOS, COGS, etc. can be found in your Amazon Seller Central dashboard. 

Lack of Established Supplier/Seller Relationships

Many Amazon FBA horror stories include a sketchy supplier. 

Possible atrocities include; stealing sellers’ product ideas, overcharging for inventory, skipping quality-assurance steps, or adding extra fees just because — all of which can cut into your profits. 

That said, finding a trustworthy supplier is a labor of love, but once you’ve found one, make sure you’re establishing proper rapport. 

Doing so doesn’t mean sending a quarterly gift basket, but rather focusing on the fundamentals of a business relationship: 

• Fair negotiations
• Clear communication
• Timely payments
• Transparent Standards
• Consistent orders (if applicable)
• Acknowledging cultural differences
• Being understanding of time differences

Building these fundamentals into your business relationship with your supplier can help to prevent or decrease the likelihood of these kinds of actions that cut into your profits. 

Ordering Poor Quality Products

If you’re like me, you’ve made online impulse buys just to receive the item and be immediately disappointed. Maybe by its poor quality, lack of functionality, or perhaps it just didn’t do what it promised. 

Just don’t make the mistake of selling poor-quality products. Doing so can result in a high return rate, low customer ratings, and increased fees from poorly managed inventory. 

However, it’s not always easy to spot a quality product from a poor quality one. Learn what to look out for in my 2024 guide to Alibaba here. 

Learn more about what products to look out for when sourcing here. 

No Social Media Presence 

Like it or not, social media is the new,  digital version of a town square. 

It’s where people meet, gossip, judge others, and even go on dates. 

It’s also the main mechanism through which untapped customers learn about, gain trust in, and ultimately buy e-commerce products. Running an online business in 2024 without a social media presence one is not recommended. 

And in my opinion, the only way to figure it out is through trial and error. So whether you’re posting on IG, TikTok, or the latest social media craze, you’ll want to monitor data closely and repeat whatever content works best. 

Posting a variety of content will help gain insights into what your audience and viewers engage with the most:

• Quotes and inspirational messages
• Graphics and images
• Memes and laughter-inducing content
• Short and long-form video content
• Polls and Quizzes
• Repost customer reviews and testimonials
• Educational content 

Building that trust and connection with your audience of potential customers is key to protecting and growing your profits. 

Lack of Patience

It will take most sellers at least six months to get their product live and begin earning sales, and likely even more time to start churning profits. 

A mistake I see time and time again is sellers giving up, or becoming stressed out/concerned over the time it takes to gain traction, or the amount of upfront costs. 

Make no mistake, a successful Amazon business takes time, patience, effort, thinking outside the box, and a constant drive to keep improving on your product. 

I hate repeating myself, but this is not a “get rich quick” business. And if you’re looking to make a surgeon’s salary, you’ll have to put in the work. 

I recommend dedicating at least 10 hours a week to the business. 

Failure to Create a Brand

Should you go through the trouble of creating a brand, or not?

For those new to selling, selling a branded product means you’ve taken the extra steps to register your product and started a patent. 

Branded products give customers a unique value proposition (as opposed to selling a generic or not braided product). They’re easier to earn customer trust, have a higher perceived value, and 

And the best part of all, Amazon gives branded products special treatment that makes earning sales easier. 

Branded products gain access to:

• A+ Content
• Brand Analytics
• Extra protection against hijackers and fraud
• Added way to advertise and market your product 

So while startup costs might be higher for a branded product, you’re much more likely to turn higher profits if you take the time and follow the steps for registering a brand. 

Too Low of Budget

A quick YouTube search of “how much to start an Amazon FBA” provides an array of misleading and vague information so I’ll be brutally honest here. Amazon sellers need at least $10,000 to start this business the right way. Depending on the specific product, this number could be as high as $16,000. 

These numbers include:

• Starting an LLC
• Product Research Software
• First Bulk Order
• Getting a pending brand patent
• PPC and Advertising dollars 
• Enrolling in Amazon’s Vine Program 

Underestimating start-up costs means that you’re already deep in the red once you find and order your first product. It’s hard to grow your profits when you’re so far behind the starting line. 

Find a complete breakdown of first-year Amazon FBA-related costs here. 

Not Preparing for Sales and Events

One focus of mine heading into 2024 is staying up to date on all the latest Amazon sales events and promotions, and preparing my inventory, pricing, and coupons accordingly. 

Sales events give sellers the possibility of skyrocketing their profits, and increased traffic from the promotions can help push excess inventory (thus increasing account health). 

Make sure to consistently check updates on your Amazon Seller Central account, as that’s where the majority of updates can be found. They’ll typically announce cut off dates for added inventory. 

Here are the U.S.-based sales events for 2024 to be on the lookout for. This is in addition to Prime Day Events, which are typically announced closer to their dates. 

• February 14 – Valentine’s Day
• March 8 – International Women’s Day
• March 31 – Easter
• May 12 – Mother’s Day
• June 9 – Children’s Day
• June 16 – Father’s Day
• July/August – Back to School
• November 28 – Thanksgiving
• November 29 – December 2 – Black Friday and Cyber Monday
• December 24 – January 1 – End of year holidays

Ignoring Feedback

Don’t overlook the importance of customer reviews and ratings to see product improvements, or adding to your product line. 

I consider it constructive criticism. Optimizing your listing around this feedback can have indirect savings and a positive impact on your profit margins by reducing return rates, earning customer trust, as well as affecting your organic ranking. 

Being proactive about responding to feedback also protects your profits from the competition, keeping you ahead of the curve. The worst case scenario is waiting too long to implement feedback, that your competition makes improvements on your product, or adds a product idea to their brand, and steals your customer base out from under you. 

Not Reaching Out for Help 

Some of the biggest hurdles with earning profits on Amazon don’t involve Amazon at all. 

Product research, sourcing, shipping, negotiating prices, and creating content for your listing all happen off the Amazon platform. 

That said, there’s lots of room for costly errors in this business. Especially when you’re dealing with international companies, customs, and intricate supply chain shipments. 

Having personally lost over $15,000 with faulty products alone (not to mention my other follies), I can wholeheartedly say I would have never found success, or grown my profits to the level I have, had I not reached out for help on countless occasions when I became stuck. 

Are You Ready to Start an Amazon FBA side hustle? 

My Amazon Winners Academy (AWA) mentorship guides you through the entire Amazon FBA process and provides a community of support with others on the exact same journey. 

You’ll get hands-on support from experienced sellers with your same goals and aspirations. 

AWA gives you a much-needed safeguard from costly mistakes, dead ends, and failed product investments to efficiently reach your passive income goals. 

So whether it’s solving issues with your Seller Central account, creative approaches to product research, scaling to new markets and niches, validating product ideas, customer service issues, and more, we’ve got you covered. 
Learn more about it here.