Top 7 mistakes newer Amazon sellers make

A guide to the most expensive mistakes that Amazon sellers make, and how to avoid them.

Why success as an Amazon seller is about what you don’t do

This is a guide on “addition by subtraction.” In other words, making your Amazon business successful by telling you what not to do.

Anyone can look at inventory that costs them $1, see that it’s selling on Amazon for $30, and determine its profitable. But what’s less understood is all the things that can ruin that seemingly simple math equation.

There are a lot of ways to screw up Amazon selling – especially when you’re just getting started. Go through this list, make sure you’re not doing any of these things, and it will be hard to fail.

Mistake #1: Not understanding how to read data in your scanning app

This is very simple, but it’s incredible how many sellers get this wrong.

Fundamentally, all this means is understanding how to read the data to determine two things:

1. An item’s value.
2. An item’s demand.

Sounds simple (and it is), but tons of sellers figure out ways to overcomplicate this. Which is understandable to an extent – many apps (like Scoutly and ScoutIQ) hit you in the face with so much data, it’s easy to get distracted and confused.

 

The only three data points you need to review on your app are:

1. Merchant fulfilled prices
2. Average Amazon sales rank
3. FBA prices (if you’re an FBA seller)

There’s no reason to complicate it.

But spend some time in any Amazon seller Facebook group, and you’ll get an eyeful of sellers posting screenshots from their app and expressing utter confusion as to what they’re looking at.

How do you understand how to read scanning app data?

Very simple: study my detailed article on how use ScoutIQ and Scoutly.

Mistake #2: Scanning everything OR Not scanning enough

This mistake comes in two parts:

1. Being unable to detect clues that separate a (potentially) profitable book from an (almost definitely) unprofitable one, and simply scanning everything.
2. Thinking only a few book categories are profitable, and limiting yourself to those.

Both of these are a huge mistake.

Part One: Scanning everything

This one is (apparently) controversial.

When I see Amazon sellers out sourcing in the field and they’re scanning everything, indiscriminately, I have to shake my head. This is peak inefficiency, and simply isn’t sustainable.

You usually have more things to scan than you have time to scan them. And while it will take time for newer sellers to be able to assess potential value at a glance, if you’ve been selling for awhile, you should be ascending beyond the “scan everything” phase to a more efficient sourcing methodology.

We call the “scan everything” sellers “scanner monkeys.” You can be a Scanner Monkey and be successful, but its very inefficient and unnecessary.

Part Two: Not scanning enough

This mistake happens when sellers get too confident that value is confined to only to certain categories.

(I’m speaking in terms of Books here, but there’s a version of this for every Amazon product category.)

This manifests in sellers limiting themselves to just the categories they think are profitable. Their beliefs are always totally arbitrary and borderline-random.

The folly here is that there is no such thing as a “profitable category” or an “unprofitable category.” Value is by title, not category.

While there may be some statistical argument that certain book categories tend to have more profit than others, the difference will never be significant enough to avoid any single category altogether.

Both extremes here are major mistakes that will cost you a lot of money (and time).

How to understand what inventory to look for

If you’re focused on selling books, study my guide to spotting profit: 100 Books That Sold For $100: A Guide To Spotting Profit

Mistake #3: Overloading on software / infrastructure before you’re profitable

This mistake happens when sellers dive into the business thinking they need to load up with every software tool and widget before they’ve made any money. Huge mistake.

For Amazon sellers, there are three kinds of tools:

1. Tools that will accelerate your business at the very beginning.
2. Tools that will accelerate your business once you have momentum.
3. Tools that are optional no matter what stage of the business you’re in.

The key thing to understand is the “more tools does not equal more profit.” So many sellers get initiated to Amazon selling through Facebook groups or courses that create the sense they need 10 different tools to get started.

Or, they have another false belief: That an Amazon sellers with 10 tools will make more money than the one with 3 tools.

Both of these are dangerously false.

The only tool you need to get started

There is only one tool I would consider mandatory: Some form of a scouting app (also known as a “scanning app”) that will tell you which items are profitable.You can start with Amazon’s free app, but I recommend signing up for the free trial for tool called Scoutly.

• After that, you sign up for a listing tool. But only after you’ve accumulated enough inventory for a shipment.
• After that, a repricing tool But only after you have inventory coming in steadily, and your inventory is over 100 items.

All of these combined can be as little as $47 a month (assuming you’re using the cheapest plans I know of for each of these three tools).

Don’t even consider signing up for anything else until you have consistent Amazon payouts coming in.

Mistake #4: Ignoring Amazon Sales Rank

Ignoring Sales Rank is the #1 reason Amazon sellers end up with inventory that doesn’t sell.

The reason this mistake is so common is that it’s the easiest to make when you’re getting started. The other big buying mistake is buying inventory that doesn’t have value (after fees). Since reading plain numbers is pretty easy for most adults, most sellers don’t make this mistake.

Sales Rank (aka “Best Sellers Rank”) on the other hand, is a lot more mysterious to many sellers. So they either choose to ignore it, or misunderstand what various Sales Ranks mean in terms of how often an item is selling.

You can’t ignore Sales Rank. You must understand roughly how often any item you acquire is selling on Amazon. Ignoring this means you’ll be stuck with inventory that doesn’t sell.

 

How to understand Amazon Sales Rank (aka Best Seller’s Rank)

There’s a full guide on that (free): Understanding Amazon Sales Rank

Mistake #5: Freaking out when something doesn’t sell right away

This mistake is extremely prevalent, particularly with newer sellers.

This happens when a seller has the mistaken belief that all inventory should sell extremely quickly as soon as its listed. Or, making a related mistake: being generally misinformed about how quickly inventory should sell based on its average Sales Rank.

Remember that listing something for sale on Amazon does not trigger an Executive Order from the White House that the world must buy your items. An item not selling in the first week, month, or even six months does not mean you’re doing anything wrong.

That doesn’t mean you don’t have a problem (spoiler: If you do have a problem, its a repricing problem. And you should fix that). But often inventory is priced perfectly, and it’s just a matter of waiting until a buyer comes along. No reason to panic.

What unfortunately happens far too often is sellers panic-drop prices way too soon. This may result in sales, but they come at the cost of profits.

There is never a reason to panic if an item doesn’t sell right away.

Mistake #6: Not understanding Amazon fees

This mistake results in some wildly distorted beliefs about the business of selling on Amazon – and can often put you out of business.

Amazon fees aren’t exactly simple, but they’re not hard to understand with a few minutes of study.

But when you don’t understand (roughly) what Amazon will take out of a sales price, and other selling expenses (inbound shipping, long term storage fees, etc), you can end up actually losing money.

How to understand Amazon’s fees?

Quickest way to get the most basic breakdown of Amazon fees is to run some sample inventory through Amazon’s fee calculator. Compare the selling price to your payout, look at how it all breaks down, and it will all become second nature very quickly.

Mistake #7: Pricing too conservatively

This is a mistake that is the product of what I call “low seller self-esteem.”

This is where you price your inventory too low, on the (conscious or subconscious) belief that no one will buy your inventory unless you undercut every other seller.

I definitely made this mistake in my Amazon selling career. Actually twice. The first time was when I first started, and I was insecure about my “Just Launched” status and having no feedback score. I thought that would scare buyers away, so I priced ridiculously low to get sales. And then again when I switched to FBA, matching “merchant fulfilled” prices, thinking that no one would pay more for my books simply because they were FBA. Both of these were costly mistakes.

You should price your inventory for what you can sell it for, not at a “discount.”

Understand the basics of sound pricing strategy, and never price out of desperation.

How do you make sure you’re not pricing too low?

I recommend studying the repricing template that I recommend. Works just as well for manual repricing as for a repricing tool. I explain each pricing rule, and the strategy behind it, to help you get a grasp on the balance between pricing too high and pricing too low.

Recapping the biggest mistakes Amazon sellers make

1. Not understanding scouting app numbers.
2. Scanning too much or too little
3. Overloading on software too early
4. Ignoring Amazon Sales Rank in sourcing and pricing decisions
5. Freaking out when something doesn’t sell right away
6. Not understanding Amazon fees
7. Pricing too low

Read this list seriously ask yourself if you’re making any of these mistakes. Every single one is extremely costly, and should be corrected ASAP.

-Peter Valley

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