For all of the fruitful and pleasant aspects that running a business on Amazon presents, it’s not all rainbows and butterflies. In fact, most sellers spend good chunks of time on areas that can feel stressful, draining, and outright irritating. And, Amazon’s history of seller “support” hasn’t exactly been average, let alone great.
The good news is there is a solution to mostly all of the headaches you may experience as an Amazon seller, and the ease of the solution usually depends on how proactive you are in preparing and approaching them.
Is Selling on Amazon Worth It?
The benefits of selling on Amazon far outweigh the cons, especially if you are aware of the possible issues and have a solution for them when they occur. Whether you are a retail arbitrage, online arbitrage, private label, or wholesale seller, there is immense opportunity to make extra income through the Amazon seller platform.
The following list mentions a few of the areas we have uncovered and developed systems around in order to cure our headaches. Some are more specific to arbitrage resellers, but many apply to all seller types. We hope they may help guide you if you ever have to deal with the same problems. Many Amazon resources overlook the headaches and sell pipe-dreams to the audience, but these are genuine issues that we want to highlight so you are aware of possible roadblocks— not to discourage you.
“Price Tanking” or “Penny Dropping” Sellers on Amazon
Hop onto any Amazon Facebook group or forum and you’ll hear the cries about people who drop prices to win the buy-boxes. “The Tankers!!!! What is wrong with them!?!? Why do they crush the price on a listing and cause us to lose out on extra profits!”
Price tanking is usually automated with repricers that automatically drop the price of an item, usually by a penny, every time another seller matches the buy-box on the Amazon listing.
To be frank, this is part of inventory liquidation plans for many business models, not just on Amazon. It’s also pretty common when there are too many sellers on one listing competing for the buy-box. While it can hurt your margins on products, complaining about it all over the internet doesn’t really help anything. Competition is part of business, and expecting other sellers to play nice and not try to make as much money as fast as they can is generally not how the seller market works. If you are reselling items, you have to be prepared for this and accept it when it happens. It is what it is.
Solution: Make Smarter Sourcing Decisions By Learning How to Use Keepa, Avoid Listings with Large Amounts of Sellers, or Move into Private Label Selling
Before you get upset at someone offering your product at a lower price, remember that all business models vary. If you are a reseller, you are most likely buying at retail discounts and sales levels along with many other resellers. Other Amazon sellers may have a wholesale or liquidation contract that enables them to source the product at lower unit prices than you, allowing them to sell at a much lower price with still better margins. It’s also possible that other Amazon sellers have had the inventory for a long time and need to get rid of it, therefore dropping their price. In those situations, the only decision you can really make is to either keep your price high and wait or sell and get that money into better inventory.
It’s hard to completely avoid price tanking as a reseller on listings that are open to other resellers. However, If you become an expert at using Keepa to predict sales velocity and verify pricing history, you can make safer purchasing decisions with bigger margins to play with, decreasing the damage from price tanking.
If you don’t want competition on your listings at all, consider launching your own private-labeled products and establishing a brand registry with Amazon to protect others from joining your listing. You can also create wholesale contracts with certain manufacturers and become a certified reseller of their products
Paying Amazon FBA Seller Taxes: The Sales and Use Tax Dilemma
At one time, Sales and Use tax compliance was arguably the most controversial aspect of the Amazon reseller business. We are not accountants or tax experts here, so don’t take anything we say here as an absolute, but we do think it is a good idea to update yourself on nexus requirements in your business state and other states you may sell in.
Recently, with a shift in marketplace facilitator laws, Amazon was held liable to collect and pass sales and use tax on behalf of third-party sellers for the majority of states, alleviating a big portion of the tax headache for small and large Amazon sellers. Again, make sure you check with your accountant to verify what your nexus requirements are.
Solution: Educate Yourself on Nexus Requirements per State and Look into Using Sales Tax Management Solutions like TaxJar
If you do have to collect and pass sales tax, it can be a headache to set up in the beginning. However, it doesn’t actually cost you money as a seller. You collect sales tax from the customer and pass it to the state the customer purchased inventory from, like a middle (wo)man.
The process for actually filing your Sales and Use tax reports can be a breeze in some states and a long slow nightmare for others. Fortunately, there are tools that make managing nexus and filing taxes easier, such as Tax Jar.
If you need a good book-keeper or accountant, we highly recommend Lien Tubb. She’s great and specializes in helping Amazon Sellers.
Can’t Win Buybox Because Amazon is on the Listing
It’s easy to get frustrated when Amazon shows up as a seller on a listing you are currently holding inventory on. They are notorious for dropping prices and keeping the buy-box, but it is their selling platform and business.
Competing with Amazon isn’t usually that fruitful, but it can be done. You might find yourself in a price war with the boss which results in a nasty loss, but that’s not always the case.
Solution: Fight (Implement Aggressive Repricing Strategy) – Flight (Liquidate) – or Chill (Sit Still)
On occasion, Amazon does share the buy box. Sometimes they never replenish their inventory on certain listings, and sometimes they stay out of stock long enough for you to get rid of your inventory. It is your decision whether or not to fight back by implementing an aggressive repricing strategy, or to liquidate items, or to wait and hope Amazon runs out of stock or starts sharing the buy-box on their own. We usually play the fast routes and aggressively reprice or liquidate!
If you aren’t using a repricer yet, check out this post and video to learn how.
Amazon Sales Rank of Off-Season Products Dropping Fast = Huge Amazon Long Term Storage Fees
It may be obvious, but pay attention to what kind of products you are selling in any given season. Many products are universal all year but others, including clothing, are generally seasonal. Knowing the right time to be in the market and out of the market will help facilitate smooth cash flow and make for a much better sales velocity.
Holding onto winter coats well into the spring probably isn’t the best idea, as the rank will drop off and the product will stop selling. The longer you hold the item, the higher fees Amazon will charge you for storage. Plan how much inventory you are buying based on the seasons arriving, and try to monitor what needs to be liquidated before it goes out of season.
Solution: Buy Inventory Like a Pro and Plan Wisely for Upcoming Inventory Seasons!
Learn how to use Keepa and evaluate all of your product leads before you sell them. Pay attention to seasonal trends in the price history charts and use your common sense if selling season-dependent clothing items.
You can learn how to completely evaluate a lead for resale here.
Once you are familiar with how to use keepa and how to evaluate a lead, you can estimate the amount of units to buy for each lead with our free guide, Buy Like a Pro: How to Estimate the Amount of Inventory to Buy and Resell in Every Amazon Category and Rank.
FREE 19-PAGE GUIDE!
Buy Like a Pro! A Cheat Sheet for Estimating Buys in Every Online Arbitrage Rank and Category
You can also use these seasonal trends to your advantage to stock up on popular seasonal items before the season arrives so you can sell them out before it ends.
Amazon Seller Performance Notification Warnings or “Amazon Account Suspended” Messages.
At the time of writing this, policy violations and account suspensions are the big winner for the most annoying (and sometimes serious) headache that an Amazon seller may have to deal with.
It can feel like a nervous punch to the stomach when logging into your account and seeing that little performance notification flag lit up red like a forest fire.
Some of the common issues that are reported are counterfeit claims, trademark infringement, listing suspension, account suspension, listing closures, pricing errors, and various other performance-related issues. These issues can sometimes take weeks, months, or even several months to resolve due to Amazon’s lack of competent seller support. They’ve made some progress in recent years to improve the support system, but there is no doubt it’s still the number one headache that sellers have to deal with.
If you’ve received some of these dreadful notifications, it’s not the end of the world. If you are sure you haven’t violated Amazon’s seller policies or terms, then your issue is likely resolvable with the right approach.
You can review your policy compliance ratings in your account health dashboard.
Solution: Get a Fully Trained Virtual Assistant Up and Running in Under a Week with No Training Costs, Hiring Costs, Management Time or Payroll Headaches with Seller Candy
If you are lost and need immediate help on how to proceed with an issue, check out Seller Candy, an incredible team of Amazon experts that will handle all of your Amazon account headaches for you. A good friend of ours created this company to save sellers from the ridiculous amount of BS consultants and lawyers who want thousands just to handle one case. And, there is no limit on the amount of seller central tasks you can submit to Seller Candy each month. They handle many different Amazon seller issues, not just performance notification errors, including headache number six below.
Split listings, Sporadic Category Changes, and Inventory Issues on Amazon Seller Central
Bottom line? Weird things happen to Amazon listings and inventory as a result of algorithm changes, third-party sellers modifying the listing details, and other various account issues.
Maybe you are selling an item at a relatively good velocity, and then all of a sudden the velocity of sales disappears. Maybe a child variation from one of your listings gets split from the main parent variation that holds the sales rank. Any slight modification to one of hundreds of Amazon details on a listing can completely shift the sales velocity and success of that listing. With multiple sellers having access to the same listings, a change that another seller makes could indeed cause damage to your sales velocity and success with listings.
Sometimes inventory can have individual issues which will show up in the inventory management area in Seller Central. These issues may show up under Listing Enhancements, Unfulfillable Inventory, or Stranded Inventory, as shown in the graphic below.
There is nothing really code red about listing enhancements, just recommendations on ways to improve your listing, like adding a new image or something like a “Team Name” on sports apparel.
Unfulfillable inventory is not too big a deal either and can be set up to automatically be removed or destroyed on a set schedule. These are items that are usually returned as damaged.
Fixing stranded inventory, however, is very important and you should make sure to have an admin regularly going through the section and performing whatever action is necessary to get the listing live again. Stranded inventory tends to be items that may have been delisted due to a trademark complaint, safety, restriction, missing SKU, or other issues.
Solution: Contact Seller Support, Learn How to Use an Amazon Flat File to Fix Listing Errors, or Use a Service Like Seller Candy
These situations can be confusing, but it is usually relatively easy to fix by either contacting Amazon Seller Support, hiring and training a virtual assistant to specifically handle these tasks for you through seller central and flat files, or hiring a third-party service like SellerCandy to take care of it.
Customer Left Negative Feedback and Rating
You know how the saying goes, “The customer is always right!”? It makes sense to take this stance with your Amazon FBA business as well. Although you might feel like body slamming the customer like Hulk Hogan sometimes, it’s often smarter to systemize a process to handle customer disputes instead of letting it suck your energy. The goal is to get past the issue as effectively and as swiftly as possible.
The last thing you want is negative ratings piling up, so take care of the issues as soon as possible. If your ratings drop too low, it will affect your account health and can even result in account suspension. Maintaining a high seller feedback rating is vital.
Solution: Master the Art of the Amazon Feedback Removal Request
Most of the time customer service issues are related to the shipping and delivery process, and if you are using FBA to fulfill your items then it’s pretty easy to have negative feedback removed by simply requesting that it be removed within seller central. Sometimes a buyer will leave feedback on you as the seller when they are meaning to review the product itself, and these can also be removed by contacting amazon seller support.
How to Remedy a Messy Seller Review Situation
Even if a customer seems dishonest or wrong about their feedback or complaint, it’s best to create a positive remedy to the situation.
If a customer is upset, create a system with your team that makes them extremely happy. This may include offering them a full refund, an additional concession of 5 or 10% depending on how bad the issue is, and allowing them to keep whatever item was sent anyway. Afterward, you can ask them to consider modifying their review if they are satisfied with your service. However, do not ask them to remove or modify your review in exchange for refunds or concessions. This will get your account suspended and is against Amazon’s terms. You can voluntarily refund them and give concessions, but the buyer has to modify or change the review on their own, not in exchange for the refund.
Services and Tools for Feedback Management and Removal
You may also be interested in these services and tools that help manage feedback for you:
Customer Service Contact Example Letters for Bad Reviews
We have used several email templates to resolve issues with customers. You can download the templates for free here and craft your own letters to help resolve your issues too.
Free Customer Service Email Templates To Remove Feedback
Enter your email and we will send you our customer service email templates for removing feedback!
Amazon Restricted Brands
More and more brands are beginning to sell directly to consumers on Amazon to prevent counterfeit operations that sometimes happen through unauthorized third-party resellers. This isn’t the end of the world, it is just forcing the evolution of Amazon seller strategy and increasing brand protection. Before you purchase inventory under brands you don’t own, make sure and check to see if you are approved to sell products under that brand name on the Amazon marketplace.
Solution: Stay Away from Restricted Brands or Get Approval to Sell the Brands
Establishing wholesale accounts to act as an authorized distributor for certain brands usually requires a physical storefront or standalone ecommerce website, as well as purchase invoices directly from the manufacturer to prove you have permission to sell the brand.
However, with a good seller rating, you can sometimes simply click “request approval” when considering whether or not to sell a product under a certain brand, and Amazon may automatically approve you to sell the brand based on your seller performance.
If you go to ‘Add a product’ in Amazon Seller Central, you can see whether or not you are approved to sell it.
Here is a fantastic list of brands from Seller Essentials that have had restriction issues for some sellers in the past.
Gated or Restricted Product Categories
On top of the brand dilemma above, you also need approval to sell in specific Amazon product categories. As a new seller on the Amazon marketplace, you will only be allowed to sell in a few select categories.
See a list of categories requiring approval here: https://www.amazon.com/gp/help/customer/display.html?nodeId=14113001.
Solution: Get Ungated in the Categories You Want to Sell In
As you progress in your business, you may want to get yourself ungated in as many categories as possible so that you can maximize your sourcing efforts and selling potential. Each category in the Amazon list from the link above has specific requirements to get ungated. You can also visit this helpful post from The Selling Guys here to learn how to get ungated.
Your Product Is Classified as Hazmat or a Dangerous Good
Because of the danger in storing and shipping certain products (like flammable or combustible items), Amazon imposes certain restrictions for sellers on items that are labeled Hazmat. Many of these items cannot be sold via Amazon FBA fulfillment unless you are approved through the Dangerous Goods Hazmat Program.
In addition to dangerous goods, liquids have certain restrictions on them too. Make sure you check all restrictions before attempting to send products into Amazon warehouses.
If you are sourcing items to buy and resell, make sure you are identifying if the items have any restrictions before purchasing. You can learn about verifying restrictions and hazmat items in section 5 of our giant free guide below:
Solution: Avoid Hazmat Products, Merchant Fulfill Your Shipments, or Join the Dangerous Goods Hazmat Program
Perhaps the easiest solution in moving forward is to join the Dangerous Goods Hazmat Program to get approval in working with FBA to fulfill hamzat items. You can also merchant fulfill hazmat items on your own terms as long as you are following the shipping guidelines for hazmat items based on the carrier you are using. Lastly, avoiding hazmat products all together may be a solid option. You can check to see if products you are reviewing are hazmat by following the directions in this post.
Prep Company Bundling Fees & Other Hidden Business Fees
If you are using a third-party to receive and prep your items, this is just a simple reminder to be aware that some prep companies charge extra fees for bundling items. Multipacks often look very attractive until you realize the prep fee is going to get multiplied by the number of units in the bundle and eat the entire ROI out of the lead.
In reality, this is just one small example of many hidden costs that can be involved with selling on the Amazon marketplace or other e-commerce platforms. Familiarize yourself with all the possible costs of using the marketplaces and FBA services before diving in.
Solution: Review the Amazon Marketplace Fee Structure, Prep Company Fee Structures, and Use FBA Calculators to Estimate Profits Correctly.
Make sure you familiarize yourself with Amazon’s fee structure for FBA and MF selling, and also review your prep-company fee structures if applicable.
Colors and Sizes in Your Amazon Inventory That Just Won’t Sell
One of the smartest things you can do is narrow your buying targets down to a few colors and size ranges to prevent stagnant inventory. Buying an exotic lime green color on a listing that has multiple colors available may not be a great idea, as the more neutral colors may actually be selling much better. You will also find issues with oddly small or large sizes of clothing and shoes.
If you can read the data properly and determine that a variation is selling well, you might be able to hit some home runs by buying outside the normal size spectrum. However, most of the time sticking to blacks, greys, normal blues and greens, and some reds and pinks based on the type of product, you will probably sell more than if you buy the exotic ones.
The only area we see exotic colors selling really well is for safety reasons in running gear, construction gear, etc. For shoes, we tend to stay in the 6-9 range for women’s and the 9-12 range for men.
Ban Hammer from Reseller Unfriendly Stores & Brands
Some stores have set up systems to ban particular buyers who try to purchase excessive amounts of inventory. This doesn’t mean that they will ban you for ordering from them, but keep this in mind in case you start seeing your orders blocked from particular stores when buying inventory for resale.
Solution: Make Multiple Orders in Smaller Quantities Rather Than Huge Orders, Spread Orders Out Over Days, Use Gift Cards Instead of the Same Credit Card Over and Over
Sometimes you can avoid being banned by making smaller purchases over longer periods of time, although these methods don’t necessarily help a resale business that is trying to scale. Some arbitrage sellers have gone so far as to hire multiple buyers with different credit cards on their team, all buying the same inventory from different accounts to avoid the red flag. Others also use gift-cards to disguise their funding methods while checking out as a guest.
Ultimately, if a retail store is reseller unfriendly, it may be best just to stick to finding inventory sources that are larger and without limitation.
A few well-known stores that have been known to ban resellers are:
Align, BBC, Belk, Bergners, BH Cosmetics, Birchbox, Black Diamond, Bodybuilding, Bonanza, Bonton, Boscov’s – calls and charges extra shipping, Chemex, Collections Etc,. CVS, Dermstore, DK Vitamins, Dr. Vitamin, E Vitamins, Famous Footwear, Finish Line (Sends damaged products), Fromm, Hot Topic, Jet, Kohls, Lush, Mankind(European Website), Marmot, New Balance, Nike, North Face, Off Broadway, Olay, Pacidose, Philosophy, Prilosec, Proctor & Gamble, Pure Formulas, REI, RTCI, Sephora, Skinstore, Spine Life Store, Target, Tarte, Teavana, Thermoworks, ThinkGeek, Thrive Market, TooFaced, Ulta, Under Armour (Famous Brand), Vet Direct x, Wallaroo, Webstaurant, and Williams Sonoma.
Business Insurance for Your Amazon Business
Amazon requires business insurance in order to sell on their site with a Pro Merchant account. You’ll also need to provide proof of coverage to them. This can be a hefty cost upfront, but it’s a pretty easy set-it-and-forget-about-it process.
Solution: Source Business Insurance Locally
Amazon selling is quite popular these days, so it may be easiest to call around and find an insurance provider in your local area that is familiar to working with Amazon sellers. If you don’t know where to start, try asking your bookkeeper, accountant, or tax professionals if they recommend anyone who can help.
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