Lessons Learned from Selling on Amazon
For many entrepreneurs, Amazon is a tantalising marketplace, full of promise and potential. With over 300 million active users globally, it’s hard not to be attracted to the idea of tapping into this goldmine. But like any gold rush, selling on Amazon comes with its challenges, learnings, and sometimes the odd disappointment.
So, having spent some time navigating the ins and outs of selling on Amazon, I wanted to share some key lessons learned – the stuff I wish I knew before I got started!
1. It’s a marathon, not a sprint
Starting an Amazon business is far from a “get rich quick” scheme. Amazon’s algorithm, product listing process, and advertising can take months before they really start to pay off. When I first began, I naively thought I’d be raking in profits within a few weeks. Spoiler alert: I wasn’t.
What I learned is that success on Amazon requires patience and consistent effort. Listings need optimising, reviews need to be gathered, and you need to learn the nuances of Amazon’s advertising system. It can take a few months (or longer) to see the fruits of your labour, but persistence pays off. Sellers who stick around for the long haul often see the most success.
2. Product research is everything
Before you even think about opening a seller account, do your homework on product research. Trust me, this can make or break your Amazon business.
Amazon is packed with competition, and jumping in with a “me too” product is a surefire way to get lost in the sea of sellers. Use tools like Helium 10 or Jungle Scout to find niches with demand but limited competition. It’s also important to look for products with a good profit margin (30%+ is ideal), lightweight for easier shipping, and no major quality issues that could lead to bad reviews.
I learned that chasing trends is a gamble. Fads fade, and the last thing you want is to be stuck with stock that nobody wants anymore. Focus on evergreen products that solve a problem or fulfil a need year-round.
3. Customer service still matters
Even though Amazon handles most of the customer interactions (through FBA – Fulfilled by Amazon), you’re still on the hook for your reputation. Reviews are king on Amazon, and a few bad reviews can sink your listing quicker than you think.
Provide excellent service where you can, whether that’s ensuring your product descriptions are accurate, your packaging is top-notch, or just responding to customer queries and complaints promptly. Many times, customers will update their bad review if you go above and beyond to resolve the issue.
In my experience, automated follow-up emails asking for feedback after a sale also helps to garner positive reviews. A small nudge like this can do wonders for your reputation.
4. Amazon owns the customer – not you
This is a tough pill to swallow. When you sell on Amazon, you’re playing in their sandbox. They control the customer data, the communication channels, and ultimately, the customer relationship. You’re essentially leasing your storefront on their platform, and they take a nice chunk of your earnings for providing the infrastructure.
Unlike selling through your own website where you can build an email list and market directly to customers, on Amazon, you’re a bit detached. You can’t retarget previous buyers with future promotions or build long-term customer loyalty easily.
One way around this is by encouraging customers to follow your brand on social media or including something like a QR code in your packaging that directs them to a landing page with a discount for future orders. It’s a bit of a grey area though, so be careful not to violate Amazon’s policies.
5. Amazon fees add up quickly
When I first started, I didn’t quite grasp just how many fees Amazon would hit me with. There are FBA fees (if you use their fulfilment service), referral fees (typically 8-15% depending on the category), storage fees, advertising costs – and that’s not including the cost of the product itself!
What looked like a healthy margin at first quickly shrank once Amazon took their cut. Understanding all these fees upfront is crucial to pricing your product properly and ensuring you’re not working for free.
One tip I’d give is to use Amazon’s FBA calculator (available online) before deciding on a product. This will help you estimate how much profit you can realistically expect after all the fees.
6. Inventory management is crucial
It’s tempting to over-order inventory, especially when you’re excited about your product. But trust me, keeping a warehouse full of unsold stock can become a nightmare.
One lesson I learned was the importance of managing inventory properly. Ordering too much means paying higher storage fees (especially during Amazon’s peak seasons). On the flip side, running out of stock can lead to lost sales and hurt your rankings, because Amazon loves sellers who can keep up with demand. You need to strike a balance.
There are tools out there, like Forecastly or SoStocked, which help manage inventory levels and predict when you’ll need to reorder. This saved me a lot of stress when trying to juggle stock, particularly with suppliers overseas who have longer lead times.
7. Amazon advertising (PPC) is a beast of its own
Amazon’s Pay-Per-Click (PPC) advertising system can be a double-edged sword. When used correctly, it can skyrocket your sales by pushing your products to the top of search results. But without a clear strategy, it’s very easy to burn through your budget fast.
I initially jumped into Amazon PPC without much understanding, thinking it would naturally lead to more sales. In reality, my ads were poorly targeted, and I ended up wasting money on clicks that never converted.
The key is to start with a low budget and focus on very specific keywords. Use Amazon’s automatic campaigns to gather data on what’s working, then switch to manual campaigns to control your bids and targeting. It’s all about testing, refining, and optimising.
8. Amazon’s rules can change – and often do
Amazon constantly updates its policies, and sometimes these changes can have a massive impact on your business. I’ve seen sellers wiped out because of sudden changes to listing requirements, shipping guidelines, or even Amazon’s category restrictions.
One of the big lessons here is to always be on top of Amazon’s communication. Stay updated on their policies, attend webinars, and join seller forums or groups to keep your ear to the ground.
A small tweak to their algorithm or policy can sometimes mean the difference between success and failure, so flexibility is key.
Final Thoughts
Selling on Amazon is a learning curve. It’s not for the faint-hearted, and success doesn’t happen overnight. But if you’re willing to put in the effort, do your research, and adapt as you go, there’s certainly potential to build a profitable business.
The main takeaway? It’s all about managing your expectations, having a solid plan, and treating it like a long-term project rather than a quick win. Happy selling!