12 Common Problems Selling on Amazon FBA in 2024

Austin Please
Updated on
December 20, 2023
Are you a new Amazon FBA seller but can’t figure out what’s wrong with your business?
FBA is a complex business.
But being aware of these pitfalls can help you bring back to profitability.

Amazon remains a top destination for new and experienced online sellers alike. Through the Amazon FBA platform, it has provided thousands of profit to sellers.

But it takes the right skills to succeed in this business and knowing how to solve problems often encountered by sellers is a crucial step.

Here are some issues that can affect your Amazon FBA sales and revenue.

1. Using all of your revenue to maintain your inventory

This is a very risky strategy since Amazon only pays third-party sellers every two weeks. When you rely on your revenues to replenish your inventory, it will be a tough challenge to meet future demand when your earnings haven’t arrived yet. So, set aside a portion of your money to meet your buffer inventory.

One of the major problems that Amazon FBA sellers encounter is using all their revenue to maintain inventory. This is a very risky strategy as Amazon only pays third-party sellers every two weeks, and when you rely on your revenues to replenish your inventory, it can make it difficult to meet future demand when your earnings have not arrived yet. To ensure that you are prepared for upcoming demand and have the ability to take on new orders without a hitch, it is always best practice to set aside a portion of your money for buffer inventory. This way, if you do experience fluctuating sales, you will be able to manage it better and won’t miss out on additional revenue due to lack of inventory.

2. Failing to prepare for seasonality

Seasonal products can often be a great way to increase your profits, but it’s important to plan ahead and have the right amount of inventory on hand in order to maximize sales when the time comes. Buyers will not wait until you restock, so it is essential to be prepared in advance and keep extra inventory on hand for those peak moments of activity.

One of the most common mistakes that Amazon FBA sellers make is not preparing for seasonality and having insufficient inventory to meet peak demand. This could include seasonal products, holidays, or any other time when sales are expected to be higher than usual. To ensure that you have enough stock on hand to meet the increased demand, it is important to

3. Ignoring customer feedback

Customer feedback can be one of the most valuable resources for your business, and yet many Amazon FBA sellers neglect to review it and make changes accordingly. Paying attention to customer feedback is important because it can help you improve your business, such as – it provides valuable insights into both the customer experience and potential areas of improvement. Take advantage of this source of information to ensure that your products are meeting customer expectations and make any changes necessary in order to drive more sales.

One of the most important elements of success for Amazon FBA sellers is understanding customer feedback and using it to improve their business. Customer feedback can provide invaluable insights into customers’ experiences with your product, as well as potential areas for improvement. By paying close attention to customer reviews and feedback, Amazon FBA sellers are able to identify any issues or areas of improvement and make adjustments to give their customers the best possible experience. This can help drive more sales as well as ensure customer satisfaction, helping maintain a positive reputation and sustain long-term success.

By understanding customer feedback and using it to make improvements, Amazon FBA sellers can work to maximize their profits and gain an edge over their competitors. Paying attention to feedback and making changes accordingly can help ensure that customers stay satisfied and keep coming back for more, increasing revenue and strengthening your business in the long run. It’s time to start paying attention to customer feedback and using it to improve your Amazon FBA business!

4. Not monitoring negative customer reviews

Negative customer feedback can affect your product rankings and sales, so it’s important to monitor them closely and respond quickly with solutions or follow-up actions if needed. If your revenues are suffering due to low customer ratings, it would be a good idea to take the time and reach out to customers to get more detailed feedback on their experiences in order to understand what needs to be improved.

By closely monitoring customer feedback and responding quickly to negative reviews, Amazon FBA sellers can work to improve their products and increase customer satisfaction. This can be done by reaching out to customers to get more detailed feedback on their experiences, providing solutions or follow-up actions that address any issues they may have experienced. By understanding the reasons why customers are dissatisfied with a product or service, Amazon FBA sellers can work to make changes that will improve the customer experience and provide better value. Taking the time to actively engage with customers in this way can help boost sales by increasing customer satisfaction and boosting product rankings on Amazon. Ultimately, monitoring negative reviews and using that feedback to make improvements is essential for long-term success as an Amazon FBA seller.

4. Losing out on price wars

It’s easy to lose to the competition in an Amazon price war. For instance, price tanking (or automatically dropping the price by a penny when a seller tries to match the buy-box offer) is a strategy used by sellers to get rid of their inventory that’s been piled up for quite some time already. It can hurt your profit, but it’s the reality of competition in business.

When you engage in this practice against larger sellers that can command a lower price but still not eat up their profit margin, you may need to look into your business model and the products that you carry.

In addition, you can improve your customer service to improve your reputation since price isn’t only the factor that buyers consider when making a purchase. Price tanking is difficult to deal with so you need to plan your purchases well to gain higher margins. With improved customer service and better selection of products, you’ll be in a better position to win the price wars against your competitors. Don’t forget that it’s not just about the numbers; it’s also about providing value to customers.

5. Not having enough positive feedback

Your product’s ranking is affected by the number of feedback and rating given by customers. However, not having enough positive reviews can easily frustrate Amazon FBA sellers. If you’re in need of 5-star Amazon reviews, remember to provide a great customer experience and then reach out to your customers to post their feedback.

Reviews are essential for Amazon FBA sellers as they can help build credibility and trust with customers, which is key for driving future sales. Studies have shown that 82% of consumers read online reviews before making a purchase decision, and 90% say their buying decisions are influenced by positive reviews. Furthermore, 75% of shoppers use online ratings as a primary source of information when researching products.

Therefore, it's important to take the time to ask for reviews from customers and actively seek out positive feedback. Encouraging customers to leave honest reviews that reflect their experience with your product can help build trust with potential buyers and will ultimately result in more sales for Amazon FBA sellers.

6. Enabling the repackaging feature

Amazon FBA accounts are automatically set for “Repackage Unsellable Customer Returns” so that when a packaging is damaged, Amazon will repackage it to make it re-sellable.

However, most customers perceive repackaged products as second-hand items or fake versions. Packaging is very important when it comes to first impressions so do not forget to disable the feature before doing your first transaction.

Packaging is essential in creating a great first impression for customers. It is the first touch point that customers have with a product, and it can make or break whether they decide to buy it or not. A strong packaging design helps to make products more appealing and encourages customers to purchase them. Additionally, well-designed packaging is often an indicator of how great the product is, and can influence customers to leave positive reviews.

Therefore, Amazon FBA sellers should take the time to invest in creating attractive packaging for their products that stand out from competitors and make a lasting impression on customers.  This will help ensure that buyers have an enjoyable experience with your product and are more likely to give it a positive review.  In turn, this will help to boost your product's ranking on Amazon, resulting in higher sales for your business.

7. Not having a clear product return process

Customers are turned off easily when Amazon FBA sellers are not transparent with their returns policy. And when you read their complaints, it’s already too late to salvage your financial loss from high return rates.

One of the most important ways to help salvage returnees from financial loss is by providing clear and transparent product return policies. Customers should be made aware before they make a purchase of exactly what the returns process entails, including how long it takes to receive a refund or exchange, what items can be returned, and any additional fees or restrictions associated with returns. This should be made clear both on the product page and within the item's packaging before it is shipped out.

Having a clear return policy helps to build trust with customers, improving the customer experience and reducing the likelihood of them returning items for a refund or exchange. Furthermore, providing detailed information upfront will help to reduce confusion that can lead to negative reviews. It also gives customers the confidence that they are buying from a legitimate business, which can potentially lead to increased sales in the future.

Overall, having an effective product return policy is critical for Amazon FBA sellers looking to stay competitive and protect their profits. By taking the time to create a clear and transparent policy, sellers can ensure that their customers have a great experience and are more likely to leave positive reviews and spread the word about their business.

8. Compelled to accept free shipping

You’re forced to absorb shipping costs for whatever products that Amazon chooses to be eligible for free shipping. Sure, it can improve your sales figures but it would definitely hurt your earnings so be sure to take this cost into account in your cost calculation.

When operating an Amazon FBA business, it is important to account for the free shipping costs that are built into the program. These costs can have a significant impact on your bottom line, so it is essential to factor them into your overall budget.

The cost of free shipping for Amazon FBA sellers is determined by the size and weight of the product, and it is important to account for this when calculating your overall budget. For example, if you are selling a small product with a lower shipping cost, you will need to factor in the difference between what Amazon charges and what you would normally charge customers for shipping. Additionally, you should also consider the additional fees charged by Amazon when shipping products, such as fulfillment fees and other service charges.

In addition to the cost of free shipping, Amazon FBA sellers must also understand that they are limited in the types of products they can sell with free shipping. To be eligible for free shipping on Amazon, items must meet certain criteria including size and weight limitations. As such, you may be limited in the types of products that you can offer with free shipping, and it’s important to factor this into your budget.

By understanding the cost implications of Amazon’s free shipping policy, FBA sellers can make informed decisions when setting their business budget and ensure they are prepared for any potential financial losses due to the costs associated with free shipping.  By doing so, FBA sellers can help to ensure their business remains profitable and successful in the long-term.

9. No information on the fulfillment warehouse location

Since Amazon stores your product in one of its warehouses, it’s become mandatory for sales taxes to be collected for every order of your product. But Amazon doesn’t want to disclose the location of these warehouses and you’ll be left to track which location your Amazon FBA order has been shipped from to determine how much taxes you need to pay.

When selling products through Amazon FBA, it is important to stay informed about the tax obligations associated with your business. Unfortunately, one of the challenges that many sellers face is finding out which warehouse their product has been shipped from in order to calculate and pay the required sales taxes.

Amazon does not publicly share the details of its fulfillment warehouses, meaning that it can be difficult to track down the exact location of your products.

10. Lost products

This is a common issue since Amazon FBA sellers don’t have direct control on the supply chain. You can bring this up to the customer service team but it usually takes time for a report to be validated and resolved.

Lost products can be a major issue for Amazon FBA sellers, and it is important to take the necessary steps to minimize this risk. Unfortunately, due to the lack of direct control over the supply chain, it can be difficult to ensure that your products reach their destination safely. Even when shipments are properly tracked, there is always a chance that a product could be lost or damaged during transit.

In the case of lost products, it is important to contact Amazon’s customer service team as soon as possible in order to report the issue and initiate an investigation. Unfortunately, this process can take some time and you will need to wait for the report to be validated before any resolution can be offered. In the meantime, you may need to take additional steps in order to keep your customers happy and ensure a satisfactory outcome.

Overall, lost products are an unfortunate reality of selling through Amazon FBA, but it is possible to minimize this risk by taking proactive measures and keeping a close eye on your supply chain.

11. Delayed orders

Any Amazon FBA seller has encountered this issue, especially during peak seasons. It’s inevitable and it usually hurts seller ratings. Worse, it can lead to order cancellations.

Delayed orders are an unfortunate reality when selling products through Amazon FBA, especially during peak seasons. It can be incredibly frustrating for both buyers and sellers alike, as the customer may not receive their product in a timely manner and the seller’s rating is affected. If a delay is severe enough, it could even lead to order cancellations, resulting in lost revenue.

In order to reduce the risk of delayed orders and ensure customer satisfaction, it is important to take proactive measures such as keeping a close eye on inventory levels and optimizing your supply chain wherever possible. Additionally, if faced with a delay it is important to communicate with the customer in a timely manner and provide them with updates as to the status of their order.

Overall, delayed orders are an inevitable reality when selling through Amazon FBA, but it is possible to reduce this risk by taking proactive measures and communicating clearly with your customers.

12. High storage costs and other fees

Amazon’s charges from membership fees to storage costs can add up, leaving you with razor-thin profits. Successful FBA sellers know how tough it is to spread their margins when they were just starting out. But through time, they’ve learned to manage their inventory well and lower the fees by working directly with manufacturers in meeting FBA packaging requirements.

High storage costs and other fees are a major concern for Amazon FBA sellers, as they can quickly eat away at profit margins. In order to reduce the amount of money spent on fees, it is important to take proactive measures such as optimizing your inventory management and working directly with manufacturers in order to meet required packaging standards. Additionally, it is important to keep track of the fees associated with selling through Amazon FBA, as these can vary over time.

Overall, high storage costs and other fees are a reality when selling on Amazon FBA. However, it is possible to minimize this risk by taking proactive measures such as optimizing your inventory management and working directly with manufacturers.

Final Thoughts on Common Amazon FBA Problems

It’s true that Amazon FBA sellers can earn thousands of dollars from this eCommerce business. However, knowing how to navigate the business well can lead to greater long-time success and higher profits. Be sure to pay attention to these common problems and you can get the results that you want.

Overall, Amazon FBA can be a profitable and successful business opportunity, but it is important to be aware of the common problems that come along with selling through Amazon FBA. From inventory shortages to lost products and delayed orders, these issues can quickly cut into profits and affect customer satisfaction.

By taking proactive measures such as optimizing inventory management, working directly with manufacturers, and keeping a close eye on your supply chain, it is possible to reduce the risk of the common problems associated with Amazon FBA. With these strategies in place, sellers can be confident that their business will thrive.

Last Updated on
December 20, 2023
Austin Please

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Austin Please
I’m a gay dad, a happy husband, and recently my own boss. But it isn’t all sunshine and rainbows, i’m still striving to grow a mustache to achieve ultimate dadness.
Austin Please
I’m a gay dad, a happy husband, and recently my own boss. But it isn’t all sunshine and rainbows, i’m still striving to grow a mustache to achieve ultimate dadness.
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