{"id":5988,"date":"2020-03-23T08:49:17","date_gmt":"2020-03-23T08:49:17","guid":{"rendered":"\/?p=5988"},"modified":"2024-03-26T20:12:03","modified_gmt":"2024-03-26T20:12:03","slug":"7-ways-youre-losing-money-selling-on-amazon","status":"publish","type":"post","link":"https:\/\/tacticalarbitrage.com\/blog\/7-ways-youre-losing-money-selling-on-amazon\/","title":{"rendered":"7 Ways You\u2019re Losing Money Selling on Amazon"},"content":{"rendered":"<p><strong>Selling products on Amazon, whether you sell private label, arbitrage products, or anything else, can be a hugely profitable enterprise.<\/strong><\/p>\n<p><strong>It\u2019s important to remember that making profit is the reason we are selling anything in the first place. <\/strong><\/p>\n<p><strong>It does not matter if your sales are $50,000 or $500 per month.  <\/strong><\/p>\n<p><strong>You need to maximize your potential profit and ensure you know your numbers for operating your Amazon business.<\/strong><\/p>\n<p><strong>Let\u2019s look at seven ways you could be losing money selling on Amazon.<\/strong><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-5997 alignnone\" src=\"\/blog\/wp-content\/uploads\/sites\/2\/2020\/03\/7-Ways-You\u2019re-Losing-Money-Selling-on-Amazon1-1.jpg\" alt=\"\" width=\"750\" height=\"500\" \/><\/p>\n<h2><span style=\"font-weight: 400\">1. Not Using Amazon FBA<\/span><\/h2>\n<p><span style=\"font-weight: 400\">You could be losing a small fortune if you are not using the Amazon FBA (Fulfillment by Amazon) program.  This is especially more vital if you are the only one running the show.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Worst of all, you probably don\u2019t realise just how much you could be losing!<\/span><\/p>\n<h3><strong>Typical Merchant Fulfillment (MF) Process<\/strong><\/h3>\n<p><span style=\"font-weight: 400\">Let\u2019s think about your process for buying and selling products on Amazon.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Your process may look a little like this:<\/span><\/p>\n<ol>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Source products to sell on Amazon, whether you sell private label, arbitrage products, or wholesale<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Receive products at your home or business<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Store them until they are sold<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Create a listing for your products on Amazon<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">When a product is sold, you need to prep &amp; ship the product and pay for any shipping costs<\/span><\/li>\n<\/ol>\n<p><span style=\"font-weight: 400\">Let\u2019s not forget you also need to account for the following as well:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Deal with customer questions, complaints, and returns<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Replenish shipping labels, packaging, and other necessary supplies<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Manage your inventory so you don\u2019t buy things you don\u2019t have space to store<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">Have you heard that entrepreneurial advice about being productive?  <\/span><\/p>\n<p><span style=\"font-weight: 400\">Basically, you should make a list of everything you do, and then cross off anything you don\u2019t need to do yourself.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Just think.<\/span><\/p>\n<p><span style=\"font-weight: 400\">If you were using Amazon FBA, you\u2019d be able to wave goodbye to many of the laborious chores in the process and list above.<\/span><\/p>\n<p><span style=\"font-weight: 400\">You\u2019d still need to source products and create your Amazon listings, but that would be largely it. (Well sorta) <\/span><\/p>\n<p><span style=\"font-weight: 400\">When you receive products, you would label them and send them into your designated Amazon fulfilment center. <\/span><\/p>\n<p><span style=\"font-weight: 400\">Amazon would take care of the shipping, returns, and any customer service issues. You would gain more time to source products and free up any concerns or costs around storing any of the products.<\/span><\/p>\n<p><span style=\"font-weight: 400\">While you will pay Amazon FBA fees, with the time you get back you can be more productive at sourcing inventory and reinventing profits.  <\/span><\/p>\n<p><span style=\"font-weight: 400\">Your Amazon selling activity will become more profitable as a result.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-5992\" src=\"\/blog\/wp-content\/uploads\/sites\/2\/2020\/03\/austin-distel-744oGeqpxPQ-unsplash-1024x683.jpg\" alt=\"\" width=\"1024\" height=\"683\" \/><\/p>\n<h2><span style=\"font-weight: 400\">2. Focusing Too Much on the Wrong Metrics<\/span><\/h2>\n<p><span style=\"font-weight: 400\">It\u2019s easy to get caught up focusing on the wrong metrics both when sourcing products to sell on Amazon and when reviewing your sales performance.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Most of the metrics you can view from your Amazon seller dashboard and within your Amazon FBA account can be useful. The trick is to ensure that you don\u2019t focus too much on specific metrics.<\/span><\/p>\n<p><span style=\"font-weight: 400\">A common example of putting too much focus on the wrong metric is seen with Amazon sellers who predominantly use Amazon sales rank, also called Amazon BSR, to make decisions on what they should sell.<\/span><\/p>\n<p><span style=\"font-weight: 400\">While selling something that is ranked in the Top 100 for its category might seem attractive. You may be one out of 400 other sellers on that product.  Some may be willing to take a lower ROI.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Likewise, you could think you\u2019re onto a winner by choosing to sell products with a high profit margin. <\/span><\/p>\n<p><span style=\"font-weight: 400\">The caveat is it may take much longer to sell those products and tie up your capital until they sell at your desired profit margin.<\/span><\/p>\n<p><span style=\"font-weight: 400\">You are limiting your cash flow the longer you need to hold onto a product which prevents you from reinvesting to grow your profits and your Amazon business.<\/span><\/p>\n<p><span style=\"font-weight: 400\">The takeaway here is that you need to use all the metrics and data available to you to make informed decisions around what you want to sell on Amazon. <\/span><\/p>\n<p><span style=\"font-weight: 400\">Find a balance, as focusing too much on one metric will likely lead to problems either now or down the line.  <\/span><\/p>\n<p><span style=\"font-weight: 400\">Take the time to map out your <\/span><a href=\"https:\/\/en.wikipedia.org\/wiki\/SMART_criteria\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400\">SMART goals<\/span><\/a><span style=\"font-weight: 400\"> and use some defined metrics to measure them.  <\/span><\/p>\n<p><span style=\"font-weight: 400\">Sometimes it makes sense to invest in tools to help give you the data you need, especially if it will save you money in the long run.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-5996\" src=\"\/blog\/wp-content\/uploads\/sites\/2\/2020\/03\/tengyart-_VkwiVNCNfo-unsplash-1024x683.jpg\" alt=\"\" width=\"1024\" height=\"683\" \/><\/p>\n<h2><span style=\"font-weight: 400\">3. Letting Emotions Take Over<\/span><\/h2>\n<p><span style=\"font-weight: 400\">One way to lose money selling on Amazon, or at least severely limit your profitability, is to make decisions on what to sell based on your emotions.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Seeing a product that you love personally, or that you think people would love to buy, is not a reasonable basis for making an investment in a product.  <\/span><\/p>\n<p><span style=\"font-weight: 400\">Doing this certainly won\u2019t help grow your Amazon business in the long term.<\/span><\/p>\n<p><span style=\"font-weight: 400\">It\u2019s no surprise that those who see long-term success with selling on Amazon are those that make data-driven decisions. <\/span><\/p>\n<p><span style=\"font-weight: 400\">It\u2019s great to sell products that you like or have an interest in, but you must still take into account profitability. The numbers don\u2019t lie. <\/span><\/p>\n<p><span style=\"font-weight: 400\">However, if you\u2019re signed up for Amazon FBA, you <\/span><b>gain this extra time<\/b><span style=\"font-weight: 400\"> to just focus on where you\u2019re going to make money.<\/span><\/p>\n<h2><span style=\"font-weight: 400\">4. Spending Too Much Time on Unproductive Product Sourcing<\/span><\/h2>\n<p><span style=\"font-weight: 400\">Whether you sell on Amazon as a merchant fulfilled seller or use Amazon FBA, <\/span><b>sourcing products<\/b><span style=\"font-weight: 400\"> will always be one of your <\/span><b>core <\/b><span style=\"font-weight: 400\">tasks.<\/span><\/p>\n<p><span style=\"font-weight: 400\">A common phrase heard is \u201cYou make your money when you purchase the inventory\u201d.  In other words, finding the right products is the key.<\/span><\/p>\n<p><span style=\"font-weight: 400\">This includes how productive you are at sourcing your products. You don\u2019t want to waste your time doing unproductive repetitive tasks.<\/span><\/p>\n<p><span style=\"font-weight: 400\">To give you an idea of what unproductive product sourcing might look like, let\u2019s compare the differences when you do it online versus \u201cin person\u201d for both private label and arbitrage selling.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-5993\" src=\"\/blog\/wp-content\/uploads\/sites\/2\/2020\/03\/brooke-lark-W1B2LpQOBxA-unsplash-1024x683.jpg\" alt=\"\" width=\"1024\" height=\"683\" \/><\/p>\n<h3><b>Private Label Amazon Seller<\/b><\/h3>\n<p><span style=\"font-weight: 400\">It\u2019s easy to find products online from sites like <\/span><a href=\"https:\/\/www.alibaba.com\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400\">Alibaba<\/span><\/a><span style=\"font-weight: 400\">, while you can get <\/span><span style=\"font-weight: 400\">brand and logo designs<\/span><span style=\"font-weight: 400\"> from sites like <\/span><a href=\"https:\/\/www.fiverr.com\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400\">Fiverr<\/span><\/a><span style=\"font-weight: 400\"> or elsewhere online. <\/span><\/p>\n<p><span style=\"font-weight: 400\">You can get your product designed, produced, and sent to you without leaving your own home. <\/span><\/p>\n<p><span style=\"font-weight: 400\">You then send the products onto Amazon (if you\u2019re in the FBA program), create your listings, and then wait for the sales to come through.<\/span><\/p>\n<p><span style=\"font-weight: 400\">What would that process look like if you didn\u2019t use the internet? <\/span><\/p>\n<p><span style=\"font-weight: 400\">You could find yourself visiting manufacturers, doing designs yourself, and having to do a lot of coordination of tasks. <\/span><\/p>\n<p><span style=\"font-weight: 400\">If your Amazon business grows to be huge, then that might all one day become part of your business process, but if you\u2019re a one-man show then it\u2019s not a sustainable approach.<\/span><\/p>\n<h3><b>Online Arbitrage Sellers<\/b><\/h3>\n<p><span style=\"font-weight: 400\">Likewise, the same rings true for arbitrage sellers. <\/span><\/p>\n<p><span style=\"font-weight: 400\">With the availability of online tools to help you source products for Amazon arbitrage, you can find profitable products from the comfort of your own home and make use of software that will source products while you sleep. <\/span><\/p>\n<p><span style=\"font-weight: 400\">Our tool here at <\/span><a href=\"\/pricing\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400\">Tactical Arbitrage<\/span><\/a><span style=\"font-weight: 400\"> is designed to help you do exactly that. <\/span><\/p>\n<p><span style=\"font-weight: 400\">You can easily setup your own filters to ensure you find products within the parameters you want to focus on.  Think, <\/span><b>\u201cSet it and forget it.\u201d<\/b><\/p>\n<p><span style=\"font-weight: 400\">Finally, you get a cache of products to choose to purchase from the results presented along with a wealth of data to help make your decision.<\/span><\/p>\n<h3><b>Retail Arbitrage Sellers<\/b><\/h3>\n<p><span style=\"font-weight: 400\">While searching for products in an actual store, commonly known as retail arbitrage rather than online arbitrage, can be fun, it is also a demand on your time. <\/span><\/p>\n<p><span style=\"font-weight: 400\">Going to the local store and scouring the offers and clearance section will, at a minimum, cost you your time and gas money to get you there and back. <\/span><\/p>\n<p><span style=\"font-weight: 400\">Depending on the size of your car, you will also have a limitation on how much product you can buy or find yourself making repeat trips back and forth. <\/span><\/p>\n<p><span style=\"font-weight: 400\">If you don\u2019t buy anything, you\u2019ve still incurred your costs in getting there and lost your time!<\/span><\/p>\n<h2><span style=\"font-weight: 400\">5. Not Controlling Your Costs<\/span><\/h2>\n<p><span style=\"font-weight: 400\">Speaking of costs, not controlling them is another guaranteed way to be limiting your profits.<\/span><\/p>\n<p><span style=\"font-weight: 400\">If your Amazon business is making a profit and you\u2019re doing well, it\u2019s easy to lose yourself in the habit of always using the same shipping solution, or buying the same postage labels, when there might be a cheaper option available.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Often, you might just keep doing the same thing because it works, and that you\u2019d only be making a small saving.<\/span><\/p>\n<p><span style=\"font-weight: 400\">However, over time that savings would compound and potentially increase your profits significantly.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Even if you\u2019re enrolled with Amazon FBA, there are opportunities to save. <\/span><\/p>\n<p><span style=\"font-weight: 400\">If you\u2019re buying bulky, slow selling items, for example, you\u2019ll be paying for more storage space at your Amazon fulfilment center.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Learn to manage your costs <\/span><b>by sourcing the right products<\/b><span style=\"font-weight: 400\"> to begin with by using all the data you have at your fingertips.  <\/span><\/p>\n<p><span style=\"font-weight: 400\">This will prevent you from losing money later on as long term storage fees add up.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-5994\" src=\"\/wp-content\/uploads\/sites\/2\/2020\/03\/Not-Controlling-Your-Costs-7ways-losing-money.jpg\" alt=\"\" width=\"750\" height=\"500\" srcset=\"https:\/\/tacticalarbitrage.com\/blog\/wp-content\/uploads\/sites\/2\/2020\/03\/Not-Controlling-Your-Costs-7ways-losing-money.jpg 750w, https:\/\/tacticalarbitrage.com\/blog\/wp-content\/uploads\/sites\/2\/2020\/03\/Not-Controlling-Your-Costs-7ways-losing-money-300x200.jpg 300w, https:\/\/tacticalarbitrage.com\/blog\/wp-content\/uploads\/sites\/2\/2020\/03\/Not-Controlling-Your-Costs-7ways-losing-money-200x133.jpg 200w, https:\/\/tacticalarbitrage.com\/blog\/wp-content\/uploads\/sites\/2\/2020\/03\/Not-Controlling-Your-Costs-7ways-losing-money-400x267.jpg 400w, https:\/\/tacticalarbitrage.com\/blog\/wp-content\/uploads\/sites\/2\/2020\/03\/Not-Controlling-Your-Costs-7ways-losing-money-600x400.jpg 600w\" sizes=\"(max-width: 750px) 100vw, 750px\" \/><\/p>\n<h2><span style=\"font-weight: 400\">6. Doing Too Much Yourself<\/span><\/h2>\n<p><span style=\"font-weight: 400\">There comes a tipping point in your Amazon selling activities where you\u2019ll need to start thinking about hiring staff, if you decide to grow to that point.<\/span><\/p>\n<p><span style=\"font-weight: 400\">However, right from the start you should be looking to automate as much as you possibly can. <\/span><\/p>\n<p><a href=\"\/pricing\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400\">Using Tactical Arbitrage<\/span><\/a><span style=\"font-weight: 400\"> and Amazon FBA is something you can do from day one. <\/span><\/p>\n<p><span style=\"font-weight: 400\">Think about what we spoke about earlier in our section on unproductive product sourcing, too.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Another way to relieve the pressure of doing things yourself is to look into using a repricing software solution if you manage 100s of SKUs.  The <\/span><b>time saved<\/b><span style=\"font-weight: 400\"> alone would more than pay for the monthly fees.<\/span><\/p>\n<h2><span style=\"font-weight: 400\">7. Not Doing Everything You Can to Minimize Lead Times<\/span><\/h2>\n<p><span style=\"font-weight: 400\">The shorter the lead time from you identifying a product, listing it on Amazon and shipping it to your Amazon fulfilment center, the quicker the turnaround time on you selling the item and having cash to reinvest at the start of the next cycle.<\/span><\/p>\n<p><span style=\"font-weight: 400\">If you aren\u2019t doing everything you can to minimise lead times, you\u2019re limiting what you can make in a year.<\/span><\/p>\n<p><span style=\"font-weight: 400\">What can you do to help yourself minimise lead times?<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><b>Pay a little more for express shipping. <\/b><span style=\"font-weight: 400\">If you can pay to get the items you\u2019ve sourced a day or two earlier, then do so. Otherwise, you have \u201cdead time\u201d throughout each cycle where your cash is tied up and your goods aren\u2019t at Amazon. When this happens, you\u2019re not earning!<\/span><\/li>\n<li style=\"font-weight: 400\"><b>Make time to send goods to Amazon immediately.<\/b><span style=\"font-weight: 400\"> If you know that your goods are arriving on Monday morning, plan for them to be sent to Amazon on Monday afternoon. The sooner you can get your items to your Amazon fulfilment center, the sooner they can be sold.<\/span><\/li>\n<li style=\"font-weight: 400\"><b>Ensure your Amazon listings are ready to go.<\/b><span style=\"font-weight: 400\"> You can write product descriptions ahead of time prior to adding them to Amazon. While you will have certain things you can only add once you\u2019ve started your listing, you can write descriptions for any new products you\u2019re going to sell in advance.<\/span><\/li>\n<li style=\"font-weight: 400\"><b>Reinvest when you can.<\/b><span style=\"font-weight: 400\"> Try not to wait until you have a certain amount of money before reinvesting. In the early days of your Amazon selling activities, this might be essential. However, your goal should be to get to the stage where you\u2019re able to follow this process but have enough capital and the cash flow to always be buying while you have active stock available and selling on Amazon.<\/span><\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-5995\" src=\"\/wp-content\/uploads\/sites\/2\/2020\/03\/Not-Doing-Everything.jpg\" alt=\"\" width=\"751\" height=\"501\" srcset=\"https:\/\/tacticalarbitrage.com\/blog\/wp-content\/uploads\/sites\/2\/2020\/03\/Not-Doing-Everything.jpg 751w, https:\/\/tacticalarbitrage.com\/blog\/wp-content\/uploads\/sites\/2\/2020\/03\/Not-Doing-Everything-300x200.jpg 300w, https:\/\/tacticalarbitrage.com\/blog\/wp-content\/uploads\/sites\/2\/2020\/03\/Not-Doing-Everything-200x133.jpg 200w, https:\/\/tacticalarbitrage.com\/blog\/wp-content\/uploads\/sites\/2\/2020\/03\/Not-Doing-Everything-400x267.jpg 400w, https:\/\/tacticalarbitrage.com\/blog\/wp-content\/uploads\/sites\/2\/2020\/03\/Not-Doing-Everything-600x400.jpg 600w\" sizes=\"(max-width: 751px) 100vw, 751px\" \/><\/p>\n<h2><span style=\"font-weight: 400\">Stop Losing Money Selling on Amazon!<\/span><\/h2>\n<p><span style=\"font-weight: 400\">How many of these potential problems do you recognise in your own Amazon selling habits?<\/span><\/p>\n<p><span style=\"font-weight: 400\">Whether you\u2019re new to selling on Amazon or are vastly experienced, be wary of falling into bad habits and ensure that you\u2019re maximising your profitability at every stage.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Selling products on Amazon, whether you sell private label, arbitrage products, or anything else, can be a hugely profitable enterprise. It\u2019s important to remember that making profit is the reason we are selling anything in the first place. It does not matter if your sales are $50,000 or $500 per month. You need to maximize [&hellip;]<\/p>\n","protected":false},"author":7,"featured_media":5997,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2,9],"tags":[],"class_list":["post-5988","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tactical-arbitrage","category-amazon"],"blocksy_meta":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>7 Ways You\u2019re Losing Money Selling on Amazon<\/title>\n<meta name=\"description\" content=\"Whether you are making huge sales or selling smaller volumes on Amazon, avoid these 7 big mistakes that can result in losing money.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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