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Top 5 Biggest Mistakes Amazon Sellers Make During the Holiday Shopping Season

Top 5 Biggest Mistakes Amazon Sellers Make During the Holiday Shopping Season

With the huge opportunity of a sales surge during November and December thanks to Black Friday, Cyber Monday, Hannuka, and Christmas, many Amazon sellers are looking for ways to finish the year strong. The Amazon marketplace is home to more than 350 million products, making it essential to have a strong eCommerce strategy during EOY 2022. Make more sales with these do’s and don’ts for Amazon sellers.

 

Mistake # 1. Recklessly Cutting Prices

Amazon sellers often make the mistake of cutting their prices at the beginning of Q4, thinking that low prices are the best way to attract buyers. That strategy may work for brick-and-mortar retailers, but it doesn’t work on Amazon, a marketplace with nearly two million selling partners. When sellers reduce prices, the supply of their products decreases, and Amazon compensates by raising prices, which may drive away budget-conscious buyers. To maximize profit margins, sellers should consider higher prices instead of lower ones.

What to Do Instead

Instead of recklessly cutting prices, Amazon sellers should aim to maximize their profit margins while pricing their products competitively. Amazon offers several tools to help with this, such as the Fulfillment by Amazon Revenue Calculator. The calculator allows sellers to enter prices and see how those prices are likely to affect their net margins. Split testing, also known as A/B testing, is also helpful for determining how prices affect sales volume and profits. A/B testing involves listing a product at two prices for a specific amount of time. For example, a seller with a $20 product may want to try listing the item at $19 and $21 to see if either price makes a big difference.

 

Mistake # 2. Setting Delivery Charges

Customers with a limited budget are more likely to buy from sellers who offer free shipping. Unfortunately, many Amazon sellers make the mistake of setting delivery charges to try to maximize their net profits.

What to Do Instead

One alternative is to leverage Seller Fulfilled Prime badge from Amazon that allows sellers to maintain their Prime status while continuing to keep control over their inventory and business. Another option is for sellers to experiment with their pricing strategies, increasing prices slightly to account for the cost of packaging and shipping.

 

Mistake # 3. Picking an Over-Saturated Niche

For a new Amazon seller, competing against established brands is difficult, leading to low sales and plenty of frustration. The key to succeeding in Q4 is to sell products in a niche that isn’t completely saturated with competition.

What to Do Instead

New sellers should spend plenty of time doing niche research and thinking carefully about which products to sell. Small items are usually better for a seller without an established distribution network, as they’re easier to package and less expensive to ship. It’s also helpful to choose a product that meets the following criteria:

  • Selling price between $15 and $50.
  • Seller earnings of at least $10 per order.
  • At least ten orders per day.
  • Low competition.

 

Mistake # 4. Failure to Fulfill Orders on Time

On-time fulfillment is essential all year long, but it’s critical during the fourth quarter. Buyers use Amazon to buy gifts and other items they need for their favorite holiday celebrations. When sellers don’t ship on time, those customers end up disappointed.

What to Do Instead

For the 2022 holidays, sellers should aim to fulfill and ship orders as quickly as possible. A seller who can’t ship quickly due to time constraints should consider joining Fullfiment by Amazon (FBA) program. With FBA, Amazon takes care of the fulfillment and shipping.

 

Mistake # 5. Overpricing Products by a Big Margin

Amazon makes it easy for buyers to compare prices, so setting costs too high gives competing sellers a big advantage. Overpricing also makes winning the Buy Box for a product more difficult, which may result in fewer sales.

What to Do Instead

Once again, experimenting with pricing is the best way to avoid overpricing or underpricing items. Sellers should aim to set prices low enough to attract buyers and high enough to make a profit.

With the right product and a willingness to experiment with pricing, it’s possible to succeed on Amazon at any time of the year. For the fourth quarter, however, it’s important to focus on choosing a niche with low to moderate competition, ensuring enough demand for it and that every customer has a positive experience.

 

We Can Help!

Phelps UNITED is here to provide expert guidance on your Amazon selling strategy and brand advertising tips, explore our website to learn more.

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