The Top 2 Reasons Amazon Sellers Fail Starting an Amazon business? This is how to avoid the two mistakes I commonly see as an Amazon consultant and what to do instead.
By Tanner Rankin Edited by Chelsea Brown
Key Takeaways
- Only focusing on high-demand, low-competition product formula with listing optimization or copying what you see big brand retailers do is a quick way to lose sight of what matters most to you and Amazon alike.
- Ignoring the fact that Amazon cares what brands are doing off of its marketplace, like building their brand and driving external traffic to their product listings on Amazon is a sure way to fail quickly.
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There is a lot of good advice on how to launch your product on Amazon. Unfortunately, if you come across the wrong advice, it will have significant gaps based on what products or services they're trying to sell you.
When you're a smaller company and don't have unlimited budgets, or perhaps a solopreneur making your first foray into ecommerce, gaps and blind spots can bankrupt you.
As an Amazon consultant for 10+ years and the CEO of an Amazon software company, I can tell you firsthand the three most common reasons why entrepreneurs fail and what to do instead.
Related: Selling on Amazon? Take These 5 Steps to Knock Your Sales Out of the Park
1. Building an Amazon brand instead of a brand
Cursory Google and YouTube searches would tell you the ticket to success on Amazon follows this formula:
Find products with high or medium demand and low competition.
Source the products from manufacturers.
Get a trademark for your brand name.
Place your branding on the products.
Send the products to Amazon FBA fulfillment centers.
Optimize your listings.
Run PPC ads.
This sounds good in theory, but the nuance lies in the old adage about not just predicting the car, but predicting the traffic jam.
This results in a poor customer experience for Amazon customers because the Amazon marketplace is flooded with tens to hundreds of the same products, all with different names on them because everyone has the same software telling them to source the same products.
That's just part of the issue with that model.
Courses, articles and YouTube videos teaching this model focus on "hacks" and shortcuts revolving around listing optimizations which also contribute to a poor customer experience for the Amazon customer.
They leave out the fundamentals of selling and building a brand that you should be focusing on, which includes:
Copywriting
Sales psychology
Neuroaesthetics
This results in a deluge of ugly listings with customers forced to read 50 different ways to say "avocado cutting tool" instead of a premium customer experience.
So, if you're an Amazon seller and want to provide a peak experience and only the best products to your customers, how do you solve this problem? You make it more difficult for "private label" sellers to rise to the top and be surfaced to customers.
Amazon does this through its algorithm by prioritizing off-Amazon KPIs like external traffic, the brand website and more — as well as on-Amazon KPIs that inform Amazon about brand awareness, like branded searches.
This weeds out our next category.
Related: New Amazon Sellers Must Avoid This Huge Beginner Mistake
2. Not focusing OFF Amazon
At the surface level, you're taught to think Amazon is a closed ecosystem and only focus on what you can see on Amazon. This includes:
Keywords
Reviews
Price
Images and A+ content
Videos
Bullet points
PPC
From there, you focus on pricing strategies, giveaways, back-end listing optimizations and the other most common ways to quickly increase your Amazon sales. But that's only the half of it.
There are two pillars to success on Amazon:
On Amazon
Off Amazon
Since you're taught to be an "Amazon brand" and not a "brand," the off-Amazon component goes ignored.
To be clear, if you sell an avocado-cutting tool and want to show up at the top of searches on Amazon when someone searches "avocado-cutting tool," you want to focus on building your brand off of Amazon to increase your rankings and relevancy on Amazon.
To build your brand off of Amazon, focus on these best practices:
SEO for your brand website
Brand mentions on social media
Getting included on "Best" and "Top" lists on blogs and YouTube videos about what you sell
Example: Dish clothes: "The 10 Most Absorbent Dish Cloths"
Amazon crawls the web for information on the products being sold on its marketplace and uses that information to prioritize what shows up in search results and ads.
Plus, I mentioned "branded searches" earlier — where customers go onto Amazon and type your brand name into the search bar — and how this helps you show up higher for non-branded searches like "avocado tool." The above list is how you build brand awareness resulting in branded searches.
Related: How to Get Your First 100 Sales on Amazon
OFF Amazon is also a great place to learn more about your customers, which can help you in your imagery and copywriting. By spending more time where your customers dwell online, you'll learn more about how your products alleviate their pains, solve their problems and fulfill their desires.
Amazon prioritizes and surfaces strong brands with customer recognition that provide a great customer experience on their marketplace. This can be you if you focus on being a "brand" and not an "Amazon brand."
