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6 Mistakes Amazon Sellers Make

  • May 31, 2016 | Laura McCamy

If ecommerce sites were family members, Etsy would be your hippie Aunt Willow, eBay would be Uncle Joe who seems to spend his whole life at the backyard grill, and Amazon would be your strict Grandma Greta, who raps your knuckles with a ruler when you make a mistake.

Selling on Amazon means taking care to avoid pitfalls that could cause the ecommerce giant to suspend or even cancel your account. Here are six mistakes Amazon sellers make and how you can sidestep them.

1. Keep on Top of Your Stock

You can count to ten. You know you had ten blue pug dog umbrellas, so that’s what you entered when you listed the item on Amazon. They start moving right away, which is great. Then you see your two daughters walking to school in the rain, each holding a blue pug umbrella over her head. Not great. Make sure you have it in stock before you list it. Out of stock items can lead to customer complaints, lower ratings, or worse.

2. Include the Fees, Please

Pricing items so you make a profit is a tricky proposition, especially in a marketplace like Amazon, where price competition is fierce. One of the worst mistakes Amazon sellers make is pricing their products so low that they aren’t turning a profit. An easy way to underprice a product is to fail to account for Amazon fees. The fees, including Amazon’s referral fees, are deducted before any money goes into your seller account, so there’s no room to wriggle out of them. Referral fees range from 8 percent on cell phone devices to 45 percent on Amazon device accessories, with most in the 15 to 20 percent range.

3. Don’t Walk Away, Renee

Emily in Boise can’t wait until after your bachelor weekend in Las Vegas -- she needs the toaster oven you are selling by Monday, Tuesday at the latest. Quick response is essential to Amazon success. You wouldn’t go out of town without putting a Gone Fishin’ sign in your shop window. In Amazon terms, that means take down your Amazon listings when you are not available to ship them quickly.

4. On Amazon, the Hare Beats the Tortoise

Not to beat a point into the ground, but it is essential to turn around orders quickly. If you are going to do your own fulfillment, make sure you have your ducks in a row as far as shipping and inventory. Check your email frequently for sales notifications and log into your account often to make sure you didn’t miss a notification.

5. Fatal Mistakes Amazon Sellers Make: Policy Violations

Violating Amazon policies can get you into hot water. Remember, Amazon is your tough grandma with strict rules. No-nos include registering for more than one seller account; pointing customers to other locations where they can buy your products (such as your own website); using “unauthorized” business names; jury-rigging your ratings, feedback, or sales rank; and spamming your Amazon customers. To this end, do read the boring emails Amazon sends with policy changes. The new policies could affect your listings.

6. Don’t Be Lax on the Sales Tax

Amazon handles the sales transaction, but it doesn’t take care of the sales tax. You have to set up your own sales tax rates in Settings under "Manage Taxes." You also need to track your sales taxes and pay them to the appropriate taxing authority. If you forget to do this, you will have to pay the taxes you didn’t collect from your customers. Ouch!

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Laura McCamy
Avalara Author Laura McCamy