Difreight Blog What Will Lose Your Amazon Sales: 5 Mistakes to Avoid

What Will Lose Your Amazon Sales: 5 Mistakes to Avoid

What Will Lose Your Amazon Sales: 5 Mistakes to Avoid

Amazon is a global aggregator where you can sell everything. Ukraine also has mini analogues of this platform in the form of Prom, Rozetka, Epicenter. But playing on Ukrainian platforms and on world platforms is a very big difference in income. After all, if you get to know Amazon, then earning $5,000-$10,000 will seem ridiculous to you. Because this site covers about 7 billion people, each of whom can become your potential client.

It is quite difficult for newcomers and startups to bring their product to the TOP and gain a competitive profit among players. Why? At the beginning of the journey, you can get lost with the product, it is not enough to understand the placement of the product in categories. And also make 5 serious mistakes that will block your path to becoming a successful Amazon entrepreneur. What are these mistakes and how to avoid them? We tell in the article.

Mistake 1: Product certification was not checked

There is a group of goods that requires a large number of certificates confirming the production and quality of the products. For example: medical products, medicines, foodstuffs, fodder, cosmetics, bads. If you plan to become a manufacturer, consider what to create and sell - it just won't work like that. But to develop, document, issue, obtain permission certificates, find customers and only then sell — yes, everything is in your hands.

At the same time, do not forget that there may be restrictions on the marketplace itself. For example, in America, only US residents can sell products containing pesticides. Therefore, if you want to produce and sell products internationally, find a product category that is available for sale worldwide.

Mistake 2: The company was not registered

As soon as you understand that your business is gaining momentum and sales are actively growing, register your enterprise as a company. Because conducting monetary transactions as an individual is prohibited both in Ukraine and in the world. Moreover, for this you can receive large fines and the risk of being closed at the beginning of the journey. It should also be noted that there is no such thing as a FOP in an Amazon account. But the site provides an opportunity to sell goods either as an individual or as a company. Why should you choose to be a company rather than an individual?

  1. In order not to overpay.
  2. To avoid paying income taxes.
  3. To make it easier with paperwork.

Let's give an example: An individual earned $1,000. She will have $180 for taxes. And if you are a company, then you can first calculate all expenses, and then pay 15-20% of the profit. And if your expenses are from $1,000 to $600, then the amount of tax will be only $80.

Mistake 3: The availability of the product in the database was not checked

You started selling a product, and later it turned out that a patent already exists for it. On the way out - you violate someone's intellectual property, and someone angry is waiting for you in court or filing a complaint. And Amazon blocks your profile. Business is destroyed, you are broke. Patent research will help avoid these problems.

And even if you are outraged by the fact that someone already has and has been selling the same product as you for a long time. All the same, it's a first mover's gain. Because Amazon will direct the dispute to the right holder of the trademark (first mover). Who will either make a deal with you, or allow you to sell goods under their brand for a %, or will do everything to have Amazon block your sales.

Mistake 4: You sell in gray and counterfeit goods

Amazon will not allow you to do anything secretly, so if you try to fake a product or avoid % payments, expect severe punishment. Your account will be blocked, and it will be impossible to withdraw the earned money from the platform. Gray methods of promotion are about cheating reviews, bad reviews on competitors. Such actions are quickly tracked and also — the account is blocked, and the product can be disposed of.

Mistake 5: Not taking into account taxes and transaction costs

Timely financial reporting and payment of taxes in other countries is a guarantee of successful and calm business conduct. Therefore, check your tax number, send reports to it and avoid fines.

Do not forget that Amazon is a difficult platform for most buyers, because there are problems when making international payments. Moreover, if the supplier is located in Asia, China or India, then transaction costs reach 7%. To avoid resentment from customers and stop losing money, choose payment systems that will allow you to receive payments from Amazon without commission.

The main advice

Calculate all costs and margins of your product to bring the business to + with 1-2 months of sales. Do not forget to take into account logistics costs. And the very process of cargo delivery - trust us. We know how to work with Amazon and will help you understand, set up shipping and successfully launch your business.

Useful articles on our blog

What is freight and how does it affect the price of sea freight from China
What is freight and how does it affect the price of sea freight from China Read article
Customs Accreditation: What Ukrainian Entrepreneurs Need to Know
Customs Accreditation: What Ukrainian Entrepreneurs Need to Know Read article
Compensation for Damaged Goods: What to Do and How to Get Compensation?
Compensation for Damaged Goods: What to Do and How to Get Compensation? Read article