Selling on Amazon isn’t easy. With years of experience managing Amazon accounts, we’ve compiled a list of some of the most common mistakes we’ve seen. If you happen to have fallen into one of these traps – don’t worry! There’s always a solution and we’re here to guide you back to the path of Amazon seller success.
Having the same product on Vendor Central and Seller Central.
You may be thinking, “I’ve sold this product to Amazon through Vendor Central, why not sell more of that product on my own Amazon channel?”
Logically, this method seems like it would only increase your profits. Unfortunately, Amazon plays by a different set of rules. They will always beat your price. If you start selling that same product via Seller Central you’re now the competition, even though you’re the one who sold them the product in the first place. Once you’re playing against Amazon there are many uphill battles to be won.
How does Amazon always win? They can sell your product at whatever price they want. Amazon has no MAP restrictions whatsoever which open up a lot of doors. As if it wasn’t already easy enough for them to beat your price, they will even go as far as selling the product at a lower price then what you sold it to them for. That’s right – Amazon would rather lose money on your product then have you profit from it.
How do you fix this? Fortunately, our experts specialize in this type of thing. You’ll have to wait until Amazon sells out of your product, but once that happens we can help you build a strategy for Seller Central that will have you winning Buy Boxes instead of standing behind the competition – or worse, battling Amazon.
Using Amazon as a Close-Out Channel.
You may have thought, “I have tons of this product and Amazon is the perfect place to dump it all and get rid of it quickly.”
This is not the case. Although Amazon is an online platform that sells thousands of products, don’t confuse it with eBay. In fact, Amazon’s algorithm is based on sales velocity and reviews. In other words, it favors products that sell constantly and/or products that have been around long enough to build a solid (and positive) review base.
If you’re putting up a lot of product that Amazon has never seen just for the purpose of getting rid of it, it will likely stay put for longer than you originally expected. The Amazon marketplace is not the spot for your forgotten or lesser excess products.
Selling Via Resellers on Amazon.
You may be thinking, “I’ve had a relationship with this reseller for years, there’s no way to prevent them from selling on Amazon without losing profits and/or their trust.”
Selling with resellers is a common route for a lot of brands. However, selling via resellers on Amazon is not a good strategy for your business. You and your new competition (your reseller) will be splitting the sales of the exact same product. This direct competition isn’t ensuring you any profits on your own product.
The solution is simple: update your agreements with resellers to exclude selling on Amazon. For some businesses this may be an intimidating proposition, considering most have formed excellent relationships with their resellers that they wouldn’t want to risk. We understand! It’s not a simple task, but with the profits you’ll be seeing it’ll be well worth it to re-write those agreements. And from what we’ve seen, you’re not actually risking your relationship with your reseller. With an appropriate explanation, they’ll understand your needs just as you understand theirs.
Manufacturer on Amazon Agreement
You may have thought, “Sure, I sold some product to WalMart but I also want to sell that product on Amazon.”
This is one of the most interesting (and sneaky) clauses in your Amazon agreement. It’s called MOA or Manufacturer on Amazon Agreement. It means that if you were to sell your product wholesale to a (usually large) retailer, such as WalMart, Target, etc., and are also selling on Amazon, you’re agreeing to give Amazon first right of refusal to purchase that product from you at the same price. That’s right – Amazon can demand that you sell your item to them, via Vendor Central, instead of as planned at retail prices on Seller Central. The idea behind this is that if Amazon gets your product at the same wholesale price they’ll be able to compete with those big retailers (AKA their direct competition, and as discussed earlier Amazon hates competition).
However, Amazon can only slam its hammer down with MOA if you’re selling the same product to those retailers and on Amazon. But be warned – if Amazon discovers they can enact MOA and you refuse they have the power to shut down your account.
The moral of the story here is to be careful with what you decide to sell to retailers. If you’re considering putting some of those products on Amazon, it’ll probably be safer to just stick to Amazon.
You may be thinking now, “I thought I knew how to sell on Amazon, but now I’m not so sure…” In which case, you’re in the right place. Here at Cart Logic, our experts not only understand how to avoid these seller mishaps, but we also know how to remedy them and build you an Amazon strategy that’ll serve your brand best. Amazon isn’t easy and we’re here to help. Contact us today to learn more about the strategy we can build for your business.