Many aspiring sellers approach Amazon with rose-tinted glasses. They believe that succeeding on Amazon is as simple as listing a product and watching the profits roll in.
The truth? Selling on Amazon is far from a “set-it-and-forget-it” venture. While the platform offers incredible opportunities, maintaining a consistently profitable business requires effort, strategy, and adaptability.
For those just starting out, it’s easy to underestimate the challenges that come with selling on Amazon. From learning complex systems to standing out in a sea of competition, newbie sellers often face a steep learning curve.
In this article, we’ll look into the most common challenges newbie Amazon sellers encounter. By understanding these hurdles upfront and learning how to address them, beginners can set realistic expectations and take proactive steps to build a successful business.
Table of Contents
The Common Challenges Newbie Amazon Sellers Encounter
With Amazon attracting billions of visitors every month, it’s no surprise that many are drawn to the idea of selling on this globally renowned platform. The promise of a vast customer base and endless opportunities is certainly appealing.
But what many aspiring sellers don’t realize is that selling on Amazon comes with its own set of challenges—many of which appear right from the start. Below are the 12 common challenges newbie Amazon sellers face and tips on how to address them effectively.
1. Setting Up an Amazon Seller Account
For many new Amazon sellers, the process of creating and managing a Seller Central account can feel overwhelming. The platform’s numerous features, tools, and settings may appear complex, especially for those without prior e-commerce experience.
However, setting up your account correctly is the first step toward launching a successful Amazon business. Fortunately, there are plenty of resources available to help you learn how to create and manage your account with confidence like this one from our Amazon agency:
- Step 1: Go to Seller Central and click “Sign up”.
- Step 2: Fill out the registration form with your personal and business information.
- Step 3: Verify your identity by providing the required documentation.
Once your account is set up, the next step is to create your first product listing. To make this process easier, check out this helpful video guide:
2. Product Research
On Amazon, what might seem like a groundbreaking product idea often turns out to already be sold by someone else. This makes product research time-consuming and daunting.
Methods such as manual sourcing or reverse sourcing can feel like trying to find a needle in a haystack, especially for new Amazon sellers who aren’t familiar with the best strategies. Below are some of the ways to combat this challenge:
- Use Research Tools
Platforms like JungleScout and Helium 10 can greatly simplify the process. These tools provide valuable insights into competitor analysis, sales trends, and filtering options to help you identify profitable products with less guesswork.
- Use Amazon’s Built-in Tools
If you prefer not to rely on third-party tools, Amazon’s Product Opportunity Explorer can offer insights into trending products directly within the platform.
- Invest Time in Learning
With the right tools and a bit of time spent mastering them, product research can become a much more manageable and effective part of your Amazon business strategy.
3. Finding Reliable Suppliers
Without experience or established connections, finding suppliers who consistently deliver high-quality products on time can be a challenge. Budget constraints often make it tempting to choose cheaper suppliers with little track record, which may risk low-quality products and damage your reputation.
Conversely, trusted suppliers with higher-quality products may require smaller orders due to higher costs, which could limit stock and lead to higher prices, potentially deterring buyers. Here’s how to resolve this:
- Research and Vet Suppliers
Take the time to thoroughly research and vet potential suppliers. Look for reviews, ask for references, and ensure they have a proven track record of reliability.
- Test with Small Orders
Request product samples and start with smaller orders to test the supplier’s reliability and product quality before committing to larger purchases.
- Build Strong Relationships
Cultivate strong, long-term relationships with dependable suppliers. Doing so can ensure consistent product quality and supply, setting the stage for sustainable growth
4. Following Amazon Policies
Amazon has guidelines that cover everything from product eligibility to brand content, and failure to comply can result in warnings, listing removals, or even account suspension. A common mistake most newbie Amazon sellers make is not fully understanding which policies apply to the products they sell.
For example, certain products are restricted, such as hazardous items, and unknowingly violating these rules can lead to penalties. Here’s how to stay compliant:
- Familiarize Yourself with Amazon Policies
Take the time to read and understand Amazon seller policies, including prohibited products, brand registry requirements, and community guidelines.
- Stay Updated
Regularly review updates to Amazon’s policies to avoid accidental violations and ensure ongoing compliance.
- Seek Professional Assistance
If the rules are unclear or confusing, consulting Amazon seller support or hiring an Amazon agency can help prevent costly mistakes.
5. Lack of Product Reviews and Amazon Feedback
Reviews play a crucial role in building trust with potential buyers. Without them, even if your product appears on the first page of search results, customers may skip your listing in favor of competitors with more established reputations.
This initial lack of trust can make it harder to generate sales and gain momentum for new Amazon sellers. Here are a few strategies to address this problem:
- Optimize Your Amazon Brand Store
A professional and visually appealing Amazon Brand Store can help convey credibility. Add detailed product information and create a strong brand identity.
- Use External Platform
Link your website and social media accounts to your Amazon store. This allows potential buyers to explore reviews and testimonials on other trusted platforms, which can serve as additional references.
- Encourage Organic Reviews
Offer excellent customer service and deliver high-quality products to encourage buyers to leave positive feedback. While direct incentivization is against Amazon’s policies, providing a seamless shopping experience can naturally lead to glowing reviews.
- Utilize Amazon’s Feedback Tool
Programs like Amazon’s Request a Review button or third-party review management tools can help you automate the process of requesting feedback while remaining compliant with Amazon’s guidelines.
6. Delayed Profitability
A common misconception among new Amazon sellers is that profits from sales are instantly available, but Amazon follows a bi-weekly payment schedule. Earnings are deposited 14 days after the sale, which can create challenges for Amazon sellers who rely on quick reinvestment into inventory or other business expenses.
Without enough cash reserves, this delay can impact stock levels, order fulfillment, or marketing efforts. Relying solely on anticipated profits can lead to cash flow problems. Handle this challenge by doing the following:
- Plan Ahead with a Financial Buffer
Ensure you have sufficient funds to cover operational costs during the waiting period. This can prevent disruptions to your inventory and business activities.
- Monitor Cash Flow
Be mindful of your cash flow to maintain smooth operations. Avoid over-relying on future earnings to sustain immediate expenses.
- Focus on Sustainable Growth
While delayed profitability is a temporary challenge, consistent planning and growth can lead to greater financial stability and success over time.
7. High Competition
New Amazon sellers often face intense competition, especially in categories with established sellers. With millions of listings already on the platform, standing out can be a challenge—particularly when Amazon itself competes with lower prices, better shipping terms, and higher visibility.
Counterfeit products further complicate the situation. These cheaper alternatives can attract bargain-seeking customers, making it harder for genuine products to gain traction. Here are ways to manage the competition:
- Increase Visibility with Amazon PPC
Running Amazon PPC campaigns is a powerful way to increase your product’s visibility and stand out in a competitive marketplace. By targeting relevant keywords, you can ensure your product appears in search results, driving more traffic and potential sales.
- Use Product Research and Tools
Use keyword research and product research tools to optimize your listings and refine your strategy. These tools help you understand customer demand, identify profitable keywords, and monitor market trends to stay ahead of the competition.
- Monitor Market and Counterfeit Products
Keep an eye out for counterfeit versions of your product. If Amazon or counterfeit sellers are competing with you, take proactive steps to protect your brand and differentiate your product.
- Differentiate Your Brand
Focus on unique selling points that set your product apart. Quality, branding, and excellent customer service can help you build a loyal customer base and stand out in a crowded market.
8. Pricing Wars
Established sellers often lower their prices to attract more customers, which can make it difficult for new sellers to keep up. As a result, customers may choose competitors’ products due to lower prices.
Many new sellers make the mistake of drastically slashing their prices in an attempt to compete. While this may temporarily boost sales, it often results in razor-thin profit margins, making it unsustainable over time.
On the other hand, setting prices too high to protect margins could deter potential customers and even violate Amazon’s fair pricing policies, risking account suspensions. Win the pricing war on Amazon using these strategies:
- Use Automated Repricing Tools
Automated repricing tools, like Profasee, help adjust your prices dynamically based on market conditions. These tools use algorithms to keep you competitive without sacrificing profitability, ensuring that your product remains priced competitively while protecting your margins.
- Apply a Dynamic Pricing Strategy
Newbie sellers can use a dynamic pricing strategy by temporarily lowering their price by 10-20% for 1-3 days each month, boosting sales and improving Amazon ranking and visibility. Afterward, they can gradually increase the price over the following weeks to restore their profit margins.
- Monitor the Market and Adjust
Regularly track competitors’ prices and market trends. By staying informed about price fluctuations, you can make data-driven adjustments to stay competitive while maintaining profitability.
9. Amazon Fees and Expenses
One of the biggest surprises for new sellers on Amazon is the wide range of fees associated with selling on Amazon. From referral fees to FBA fees, inventory storage charges, and potential long-term storage costs, these expenses can add up quickly.
Without careful budgeting, you might find that your profits are barely covering these fees, making it difficult to sustain your business. Amazon’s fees vary based on factors such as your chosen marketplace, product category, and fulfillment method.
For example, FBA sellers face additional fees for storage and order handling, while all sellers must pay referral fees, which are a percentage of the sale price. Here’s how to manage these costs effectively:
- Understand Amazon’s Fee Structure
Familiarize yourself with the different fees to avoid surprises. Knowing how much Amazon will take from each sale helps you set realistic pricing and profit expectations.
- Adjust Your Budget
Allocate your budget wisely to account for Amazon’s fees. This may mean reducing spending on other aspects of your business, like packaging or marketing, to ensure that your margins are protected.
- Optimize Inventory Management
Minimize storage fees by avoiding long-term storage charges. Consider adjusting your inventory levels or using strategies like selling seasonal items quickly to avoid accumulating unnecessary storage costs.
- Choose Your Products Carefully
Selecting the right products can help you manage fees effectively. Focus on products with high demand and low storage or fulfillment fees to maximize profitability.
10. Avoiding Stockouts and Overstocks
The most critical aspect of selling on Amazon is ensuring you have enough stock to meet demand without overstocking. Striking this balance is tricky, especially for those unfamiliar with how much inventory to keep on hand.
This challenge becomes even more apparent when unexpected large order quantities arise. Overstocking can lead to higher storage fees and tied-up capital, while stockouts result in missed sales, dissatisfied customers, and negative reviews.
Both situations can negatively impact your seller account in the long term. Avoid these issues by using the following strategies:
- Use Inventory Management Tools
Use Amazon’s inventory dashboard or third-party forecasting tools to predict demand and help determine the ideal inventory levels. These tools provide insights into trends and assist with more accurate ordering.
- Use Fulfillment by Amazon
The Amazon FBA program can help by managing storage, packaging, and shipping. Although FBA has associated fees, it simplifies logistics and ensures your inventory is handled efficiently, reducing the likelihood of stockouts or overstocks.
- Monitor Inventory Regularly
Consistently track inventory levels and adjust orders accordingly. This helps avoid overstocking and minimizes the risk of stockouts, keeping your business running smoothly.
11. Amazon Listing Optimization
Appearing on the first page of Amazon search results is key to increasing customer clicks and purchases. However, achieving this requires proper listing optimization, which can be challenging for new sellers unfamiliar with the Amazon algorithm.
Amazon’s algorithm evaluates several factors—keyword relevance, product images, pricing, and customer reviews—to determine your listing’s ranking. Incomplete descriptions, poor-quality images, and unoptimized keywords can hinder your visibility.
Here’s how to optimize your listings:
- Optimize Keywords
Use tools like Helium 10 or Google Trends to research high-ranking keywords that match customer search intent. Strategically incorporate these into your listing.
- Craft Clear, Detailed Titles
Write accurate, detailed product titles that include relevant keywords. Focus on what customers would search for to find your product.
- Use High-Quality Images
Include clear, high-resolution images that showcase your product from multiple angles. Quality images build trust and improve your listing’s appeal.
- Consider Expert Help
If optimizing your listings feels overwhelming, consider hiring a full-service Amazon agency to handle it for you. Experts can create listings that rank higher and attract more customers, giving you the visibility you need.
12. Handling Customer Service and Returns
Providing excellent customer service can be difficult for new sellers on Amazon, as mishandling returns or refunds can result in negative reviews and lower ratings. Addressing customer inquiries and complaints requires significant time and effort to maintain satisfaction.
Amazon’s lenient return policy adds another layer of complexity since it allows customers to return products for reasons like buyer’s remorse or product issues. Sellers are responsible for processing refunds promptly, often covering return shipping costs for defective or misrepresented items.
To solve this challenge, try the following:
- Use Amazon FBA
FBA takes care of customer service and returns on your behalf, reducing your workload and streamlining operations. This allows you to focus on growing your business while ensuring timely and efficient customer support.
- Use Third-Party Customer Service Provider
Consider third-party platforms to manage customer interactions, respond to inquiries, and handle returns. These services can help you maintain positive ratings and ratings while saving you time and effort.
- Enhance Your Customer Service Skill
If managing customer service feels overwhelming, consider enrolling in MAG School’s Customer Service Training course. This will help you develop strategies to professionally handle customer issues, ensuring long-term success for your Amazon business.
What Are the Biggest Challenges You Face as a New Amazon Seller?
We want to hear from you!
As a new Amazon seller, you might be facing unique challenges that could shape your journey to success. Your insights will help us better understand the common hurdles and create more valuable resources for sellers like you.
Overcoming Amazon Challenges and Moving Forward
As an aspiring Amazon seller, you may have started with high hopes, only to find that the journey is full of unexpected challenges. The reality of selling on Amazon can be a steep slope, but it’s not impossible to overcome.
By now, you should have a better understanding of the common obstacles new Amazon sellers face. With the right strategies and support, you can conquer these hurdles and build a successful business.
If you’re still feeling unsure about handling these challenges on your own, our Amazon agency is here to provide the help you need. We offer the following services:
- Full-service management
- Advertising management
- Listing optimization
- Trademark registration
- Product photography
- Coaching calls for tailored advice
These services are designed to give you a solid foundation and help you grow your business confidently.
