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5 of the Biggest Amazon FBA Mistakes to Avoid

Fail fast and fail forward—a quote that resonates with entrepreneurs and Amazon sellers alike. What does it mean? Our take: Don’t fear failure. Learn from mistakes quickly so you don’t encounter the same pitfalls and can unlock long-term success in your Amazon business. We’ve worked with thousands of Amazon sellers and gained valuable insight into the biggest Amazon FBA mistakes to avoid. From choosing FBA (Fulfillment by Amazon) instead of FBM (Fulfillment by Merchant) to not underestimating Amazon FBA storage limits and FBA fees, Amazon FBA mistakes are a hot topic worth reviewing. In today’s article, we share the biggest Amazon FBA mistakes to avoid.

Amazon FBA Mistakes
Mistake #1: Not understanding Amazon fees and storage limits

Amazon FBA is an efficient way of reaching millions of customers without the hassle of handling logistics yourself. But this convenience can come at a price if you don’t diversify—and a hefty one at that.

Amazon charges different fees, including referral fees, fulfillment fees, and storage fees, to pack, prep, and ship your products to customers. Referral fees are a percentage of the selling price of your item, while fulfillment fees cover the costs of picking, packing, and shipping your products. Fees can eat into your profit margin, so factoring them into your pricing strategy is essential.

But there’s more than just Amazon fees to consider. This is where sellers get caught off guard, and common Amazon FBA mistakes arise.

Amazon imposes storage fees for keeping your products in their warehouses.

Amazon’s storage fees hinge on two critical factors: the duration of inventory storage and the volume it occupies in fulfillment centers. These fees are assessed per cubic foot, reflecting the space your products occupy in Amazon warehouses.

Amazon divides storage fees into two categories: monthly and aged inventory surcharges. Monthly storage fees cover the regular cost of storing goods, while aged inventory surcharges apply to items crossing the 180-day threshold.

The exact amount you’ll pay in storage fees is influenced by various factors, including the size of your products, the time of year, and whether your inventory falls under

standard or oversized categories. This dynamic pricing model ensures that fees align with the resources your inventory consumes and the demand fluctuations throughout the year.

Exceeding your storage limits can result in additional fees and restrictions on sending more inventory to Amazon’s fulfillment centers. Here are some tips to consider:

#1 Stay organized: Keep track of your inventory levels and sales velocity to avoid overstocking or understocking products. Utilize Amazon’s tools and reports to monitor your inventory health and forecast demand.

#2 Optimize your listings: Ensure your product listings are optimized for search and conversion to maximize sales and minimize storage time. High-quality images, compelling product descriptions, and competitive pricing can help attract customers and move inventory faster. Avoid Amazon FBA listing errors.

#3 Manage your inventory: Regularly review your inventory and consider strategies like bundling, promotions, or liquidation to clear out slow-moving items before they incur excessive storage fees.

#4 Plan ahead: Anticipate seasonal fluctuations in demand and adjust your inventory levels accordingly. Use Amazon’s free revenue calculator to identify your fulfillment costs and see real-time cost comparisons between different fulfillment methods.

#5 Explore alternative fulfillment options: We’ll discuss this in more detail later in the article, but if you consistently exceed storage limits and incur high fees, you should consider diversifying your fulfillment strategy. Options like multi-channel fulfillment or third-party logistics providers (3PLs) can offer flexibility and cost savings.

Understand and proactively strategize/manage Amazon fees and storage limits to avoid costly mistakes and optimize your FBA business for success. Knowledge is power.

Mistake #2: Neglecting proper shipping plans and order management

Amazon FBA Mistakes

Haphazard planning can lead to expensive Amazon FBA mistakes when shipping your products to fulfillment centers. To avoid pitfalls, it is important to craft a shipping plan and streamline your FBA order management process.

Your shipping plan is your roadmap for getting your inventory from point A to point B and, ultimately, into the hands of your valued customers. Carefully select the products you want to send to FBA. Consider factors like demand, seasonality, and storage fees to optimize your selection. Next, create a shipping plan in Seller Central, specifying the quantity and destination for each item. Follow Amazon’s packaging, labeling, and shipment preparation guidelines.

Proper packaging is essential to prevent delays and ensure smooth processing at Amazon fulfillment centers. Whether you use boxes, poly bags, cartons, pallets, envelopes, or totes, ensure they are sturdy, properly labeled, and meet Amazon’s guidelines—Affix correct unique shipment ID labels and FNSKU barcodes. Boxes must meet strength and size requirements, while pallets must be properly stacked and labeled. Envelopes and totes should provide adequate protection, and poly bags must have a suffocation warning label if needed.

Once your shipments are en route, stay on top of your FBA orders to ensure timely fulfillment and customer satisfaction. Monitor your inventory levels, track shipments, and promptly address any issues or discrepancies.

Efficient order management is vital for successful operations:

  • Inventory monitoring: Keep track of stock levels using Amazon’s tools.
  • Organization: Develop workflows for order processing to minimize errors.
  • Prompt fulfillment: Prioritize orders and fulfill them promptly.
  • Utilize reports: Leverage reports to analyze order history and inventory trends.
  • Automation: Consider automation tools to streamline tasks like order processing.
  • Customer communication: Keep customers informed about their orders and address inquiries promptly.
  • Returns and FBA reimbursement management: Develop an efficient process for handling returns and refunds. Stay on top of tracking and filling Amazon FBA reimbursements to maximize your return on investment.

Attention to detail and proactive order management are critical to a thriving Amazon business.

Mistake #3: Assuming Amazon accepts all products

Amazon FBA Mistakes

Making general assumptions about Amazon can land your business in hot water. Critical Amazon FBA mistakes include sellers believing that Amazon accepts all products without restrictions. This thought can lead to complications, especially regarding items containing hazardous materials, restricted ingredients, and prohibited substances.

Amazon has strict guidelines to ensure the safety of its customers, employees, and the environment. Let’s face it: Amazon is out to protect its business and avoid legal repercussions. As a seller, you need to do the same. Certain products may not be eligible for FBA due to safety concerns or legal restrictions. Here are some key considerations to keep in mind:

  • Hazardous materials: Amazon prohibits the sale of products classified as hazardous by regulatory agencies such as the U.S. Department of Transportation (DOT) or the International Air Transport Association (IATA). This includes flammable liquids, corrosive materials, and compressed gases. Before sending any products to FBA, sellers should review Amazon’s list of prohibited hazardous materials to ensure compliance.
  • Restricted ingredients: Certain ingredients may be restricted or regulated due to safety concerns or legal requirements. For example, cosmetics and skin care products containing certain chemicals may be subject to restrictions under the Federal Food, Drug and Cosmetic Act (FD&C Act.) Review Amazon’s guidelines for restricted ingredients and ensure that your products comply with applicable regulations.
  • Prohibited substances: Amazon prohibits the sale of products containing certain substances that pose health or safety risks to consumers. This includes items such as illegal drugs, prescription medications, and counterfeit goods. Thoroughly vet your products to ensure they do not contain any prohibited substances and are safe for consumers.
  • Compliance documentation: You may be required to provide documentation or certifications to demonstrate compliance with safety regulations or industry standards. Products intended for children may need to include appropriate safety certifications. Familiarize yourself with applicable requirements and ensure your products meet the necessary standards.
  • Amazon restricted products: You may be held liable for harm or damage caused by your products. Thoroughly research and understand the risks of selling specific products and take appropriate precautions to avoid Amazon restricted products and mitigate liability.

Never assume anything goes for products on Amazon. Recognize restrictions on the types of products permitted on its platform.

Mistake #4: Neglecting important insights and metrics

Ignoring or failing to understand your metrics can hinder your success on Amazon. Monitoring and managing these metrics is essential for optimizing your operations, identifying areas for improvement, and maximizing profitability. Here’s how to find and understand your seller metrics effectively:

  • Sales performance: Monitor your sales performance metrics to track your revenue, sales velocity, and conversion rates. This information is in your Seller Central dashboard under the “Sales Dashboard” or “Business Reports” section. Pay attention to trends over time and identify which products perform well and which may need adjustment.
  • Inventory health: Monitor your inventory health metrics to ensure you have enough stock to meet demand without overstocking. Check your inventory levels, sell-through rate and restock recommendations regularly to avoid stockouts and excess inventory fees. You can access this information in the “Inventory Planning” or “Inventory Health” sections of Seller Central.
  • Customer feedback: Monitor customer feedback metrics, including seller ratings, product reviews, and return rates. Respond promptly to inquiries and address negative feedback to maintain a healthy account. You can view customer feedback data in the “Customer Feedback” or “Performance” sections of Seller Central.
  • Order defect rate: Track your order defect rate (ODR), which includes metrics such as negative feedback, A-to-Z Guarantee claims and chargebacks. A high ODR can negatively impact your seller performance and may result in Amazon account suspension. Monitor your ODR closely and address issues promptly.
  • Fulfillment metrics: Monitor your fulfillment metrics, including on-time and late shipment rates, to ensure timely order processing and delivery. Strive to meet Amazon’s performance targets to maintain eligibility for programs like Amazon Prime. You can find fulfillment metrics in the “Performance” or “Fulfillment Reports” sections of Seller Central.

Metrics matter! Understanding and managing your FBA metrics is essential for the long-term success of your business.

Mistake #5: Relying solely on FBA

Relying solely on FBA (Fulfillment by Amazon) can limit your reach and sales. While FBA offers convenience and access to Prime customers, incorporating MFN (Merchant Fulfilled Network) can provide additional benefits. Here’s why you should consider using MFN alongside FBA:

  • Expanded reach: With MFN, you can reach customers who prefer non-Prime shipping options or live in areas not covered by Amazon’s FBA network. Tap into new markets to increase your sales.
  • Cost savings: FBA offers convenience but includes fulfillment fees and storage costs. Fulfilling orders through MFN can save on expenses and help increase your profit margins, especially for low-margin products.
  • Customization: With MFN, you have more control over packaging, shipping and delivery times, providing your customers with a personalized experience.
  • Seasonal flexibility: During peak seasons and holidays when FBA may experience delays or capacity constraints, having the option to fulfill orders through MFN can help ensure timely delivery and customer satisfaction.
  • Inventory management: Combining FBA and MFN allows you to diversify your inventory management strategy. You can strategically allocate inventory between FBA and MFN based on demand, seasonality, and storage costs.

To incorporate MFN into your selling strategy, you must set up your shipping settings and fulfillment processes in Seller Central. Ensure you have the necessary infrastructure and resources to fulfill orders efficiently, including shipping supplies, logistics partners, and customer service capabilities.

Avoid costly Amazon FBA mistakes
Amazon FBA Mistakes

The journey to Amazon-selling success is paved with learning from mistakes and embracing forward momentum. Avoiding common pitfalls such as underestimating Amazon fees and storage limits, neglecting seller metrics, and relying solely on FBA requires a proactive approach and a willingness to adapt.

As the saying goes, “Fail fast and fail forward.” Setbacks are stepping stones toward growth and improvement. What are some Amazon FBA mistakes you’re navigating today? We’re here to help. Comment below so we can help troubleshoot.

Amazon. Solved.

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