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Top 10 Amazon beginner mistakes
Here's what you should keep in mind as a private label merchant on Amazon
Top 10 Amazon rookie mistakes when it comes to private label merchants on Amazon ✅
This is what the following video will be about. Lorenz shows you what to look out for – from product size to the country of sale, he tells you from practical experience.
Top 10 Amazon Beginner Mistakes - Where to Sell?
At the very beginning there is the following: Selection of the market – Germany USA, UK, France, Italy, Spain, where should I sell? There are very many options, all have their advantages and disadvantages. My opinion is the following: Germany is a very good entry market, if you live in Germany, speak German, are proficient in the languages and also all the formalities regarding tax IDs, tax office, sales tax, accounting, company formation, if all this is possible relatively smoothly, the German market is very good for entry. The advantage is that the competition internationally is not so extreme, which means that many international sellers, who now come from the UK or especially from America or other countries, do not dare to enter the German market – simply because of the language barrier and also the whole tax issue. Means if we live in Germany, Germany is a super entry market. USA is also possible, only then I would definitely recommend setting up a company in the States and selling from that company in America. In principle, it is not so optimal from the German company to sell in Amazon America, because the accounting that still takes place in Germany is very complex when it comes to sales abroad, especially, within America. Now if these were sales in the EU, it would be a bit easier still. Means the choice of market, in principle I would say if we are in Germany, Germany is great, America also possible, but a little bit of preliminary work, would have to be done. How do I register the company there, what are the tax requirements?
Amazon UK to recommend?
Other markets: UK – generally rather not recommended, because it is no longer European Union, the difficulty is a bit higher. The market is not much bigger than Germany and we have a lot of international competition. Because everyone who speaks English sells primarily in America and the second country that becomes relevant is the UK. Means very many sellers internationally, who then sell in the UK with and we have in the UK sales technical compared to Germany is very identical, but means in the UK market are very many sellers on the same sales as in Germany. In Germany, there are fewer vendors, which is good for us, yes fewer vendors, means less competition.
Top 10 Amazon beginner mistakes - The product selection
Selection of the market is so the first point. Secondly, product selection and this is probably the most important thing, every new private label seller asks themselves the question: what am I selling? What is for me somehow a product what I want to offer? What should that look like? What is the price? Here I think we make another video about it, how can you find really good products ideas. Here’s the thing, I would not sell very low priced products at the beginning as a new seller. Keep your hands off products, somehow under 20 -30 € retail price. The problem will be, after all fees – if we take now 10 € product times, but sell themselves products in the price range, therefore I can confirm how difficult this can be. I’ll take a €10 product. What else comes out of that in terms of costs? We have 15% Amazon fees rule case, means 1.50 € go already times Amazon to the sales fees, 19% VAT go off, so 1.90 € approximately to the tax office. Then FBA fee, if the product is not super small and light now, that could be 3 – 5 € directly again Amazon FBA, so shipping fee, then come on top of that the product costs, shipping from China, usually to Germany, and advertising costs.
If we only have 10 euros available now, that’s relatively little revenue for a lot of fees coming our way. The whole thing is a bit easier to manage with more expensive products, and I usually recommend over 30 € retail price. Because we have, for example, if we sell a 30 € product, with a third profit before advertising costs, we would have 10 € profit. With 10 € profit we can also still finance the advertising in part, we can also make a bit of a mistake maybe somewhere and are not directly punished and we have high sales of course more profit. Assuming a €10 product, we also have a third win. Do we now only 3€ in about. With three euros profit before advertising costs, the whole thing is very difficult. Because in advertising, the click prices we pay later do not depend on the product price. I can have my 30 Euro product have exactly the same click prices in advertising as a 10€ product. Assuming we now have one euro click price per click in advertising, at €3 profit, we have just €3 available until we go into the red. At 10 € profit, we can invest 10 € in advertising, that is, generate 10 clicks on before we would book ourselves into the red. Since the advertising for new sellers is usually not very well placed, it is of course nicer if we have a little more of profit available with which we could at least finance the advertising proportionally.
So, for the first product, look for something that is, at best, not super cheap.
Do the size and weight matter?
Size and weight, as the next point. The first product doesn’t have to be small and light, of course that makes shipping a little bit easier, but when we sell more expensive products we usually have the option of them being a little bit bigger a little bit heavier. We don’t have to sell pens as the first product just because shipping is cheap and purchasing is cheap. I understand that capital plays a role in this, a lot of new sellers say “okay, I’m very conservative in capital and don’t have that much available now” and then you think directly “okay, I have little money available, little capital, I need to buy low-priced products”. This is bullshit. Even with little capital I can buy expensive products, I just can not buy so much in quantity. If I buy an expensive product now, I may not be able to buy 1000 of them directly, but maybe only 100, 200. But that’s not bad for the start either. 200 more expensive products that are valuable and can be offered for a good selling price, I find much better than if I now have 1000 pens in stock that I then only get sold at a loss. So pay attention: good sale price, a little higher than 30 euros in the best case or even more than that. Greater weight is not too relevant, that just has to give up the bottom line in the calculation. That with all the fees all the costs we still have a profit.
Recommended categories
Then categories. As a new seller, please keep your hands off baby products, electrical products, food especially, anything that has batteries I probably wouldn’t want to sell in the beginning either. Focus on categories where entry is possible without much unlocking. Means kitchen household and home for example, sports, fitness, outdoor, theoretically even shoes and handbags and such. Whereas footwear is a bit difficult in private label. Please pick categories or stationery and office so to speak, office stationery, all categories where you can start relatively easily without having to send Amazon extremely many certificates, that you have to give proof, enter invoice, everything like that. For the categories, please choose something where the entry is not quite so difficult.
Top 10 Amazon beginner mistakes - The keyword research
When selecting products still keyword research. You have to choose your products based also on search terms, not only what is somehow in trend, what is somehow your passion in the best case. That would be kind of helpful, of course, if you can identify with the product has the advantages. But just because your interest in the product is great it still doesn’t mean that it will perform on Amazon. The performance of the product also depends very much on how many search terms there are for the product, how much search volume exists for these terms. Do we have any chance at all of playing along with the product? Means: How much do I have to sell per day for a good ranking? How strong is the competition? Are there brands that play with this? Are there brands that already dominate the market?
We’re definitely doing a product research video soon as well, how can I maybe find and evaluate product ideas. This is by far one of the biggest mistakes new vendors make. Products are not chosen wisely and, most importantly, not based on data. There are definitely cases where people – or sellers in that case – choose products simply because they are interested in them and it can work. But often, unfortunately, we do not see it that way. Means: the products must fit from the data. There needs to be enough search volume, but maybe not too much. The competition must not be extremely strong. The price must match weight. Many attributes with the product and criteria must be met, we definitely make my own video for this.
How to find the right manufacturer
Then manufacturer search. Please do not write to just one manufacturer. If you write to a manufacturer and he tells you the picture costs 10 € to buy, you have absolutely no comparative values, no references. Write to many manufacturers, get the data everywhere and we usually make the table. We enter the manufacturer name, the minimum purchase quantity, price per piece, shipping per piece, total price per piece, then I have a really super great Excel spreadsheet in which I can see “hey, ten vendors”, which 1-2 of them are by far the best, and then in the best case you order product samples only from these 1-2 vendors, so samples. Please do not order 10 samples. Each sample costs between €70 and €150 on average. If I order 10 samples, I may have already spent €1000 that I might not have to spend at all. If the first sample that is ordered arrives and is great in quality, I don’t need a second, third and fourth. So there is a maximum of 1-2 samples, unless you are financially very flexible and say to yourself “okay, it doesn’t matter if I order 10 samples”. These are the next two tips, so write to many manufacturers and compare these prices and note and document, then please select only the best dealers and then request the samples from them.
Top 10 Amazon Beginner Mistakes - The Calculation
Furthermore important: calculates correctly. Means: you then get the data from the manufacturers, so product price to purchase, shipping prices, you have to check “How expensive can I sell my product on Amazon?”, “What fees are still added?”. If I sell my product for €50, I have to include everything. The sales tax, sales fee, Amazon FBA fee, purchase price of the product – including shipping to Germany – storage fee possibly and we need to estimate approximately what the advertising may cost. And in advertising it is very difficult to estimate what it will cost. Here it’s important that you look “okay, is the competition very strong like they’re doing it again search volume and so on?”. If we have a product where we need to sell 50 pieces a day for a solid ranking, i.e. a good visibility, this is probably too much for a beginner. Depends on the budget, of course, but that can also be estimated relatively well, whether the product will be too expensive in advertising or whether we can afford the whole thing. This is usually done via software tools.
The shipment
Shipping. But you have now found the best manufacturer, what sample was good, they produce the whole thing. Please see that you solve this properly in the shipping, in the best case do not send the products to your home. This is inefficient. Unless you have a huge warehouse where you then somehow maybe products can still assume that not everything is at Amazon. As a rule, however, the products are sent directly from China to the Amazon warehouse, which is the only way to make the whole thing scalable. If all the products come to your house and you’re still maybe labeling them and packaging them and so forth, the whole thing is not passive, nor is it scalable well. Means: directly from the Chinese to the Amazon warehouse. Many Chinese retailers can do the whole thing already. However, it becomes problematic if your manufacturer has a super manufacturer price, i.e. the product costs in production are top, but the shipping price is exorbitant. Then you have to be able, and this is also what you can learn, to say to the manufacturer “Hey, just produce. We ship the product ourselves”. And then via third-party providers, for example Kuehne+Nagel – now that’s pretty recommendable for Germany anyway – via Kuehne+Nagel has these products sent from China to the Amazon warehouse. This can sometimes be cheaper than what the manufacturers offer you. Means compares not only the prices of manufacturers in the cost of production, but also in shipping. If the manufacturer has a great purchase price for the products, but then really bad shipping price, then you can also have the shipping handled by another company. Is not a problem at all.
Top 10 Amazon Beginner Mistakes - Content Mistakes
Next: Content. Most new sellers manage to organize the product images relatively well, that is, with most sellers the product images look relatively good, mostly solved via freelancers, or agencies. Product images are usually fine. Make sure seven pieces, or six pieces plus video, format must be right, features must be shown well. You must sell the product through the images. The text – and this is the point where most mistakes are made – the text on the products, that is: title, bullet points, description, backend keywords, are used to rank the product on Amazon, that is, to rank on our search terms. The text on the offers is almost not used to sell the product. This means that the absolute focus of the text is on the search terms and SEO, not on the conversion. Conversion images. Texts to tendril.
Top 10 Amazon Beginner Mistakes - The Biggest Mistake
And then the last absolute biggest mistake of all: Marketing. Marketing on Amazon is much more complex than you might expect at first. Many new dealers go through the project thinking they are done. A product is on Amazon, reviews are maybe already a few there, images are there, texts are there, stock is there, and then you think “Okay, you now have 90% of the project actually completed”, that is unfortunately not so. Advertising is unfortunately the absolute biggest tool on Amazon these days to scale up projects or lose a lot of money, and new merchants tend to be inefficient in advertising, not understanding what we use advertising for on Amazon, what are campaigns, how are they set up, so what are the targets: keyword targets, product targets, retargeting, automatic targeting. There are very many types of campaigns, for brand owners even more so with video ads and retargeting as I said. You have to be able to halfway follow: How is the advertising going? What is the setup? Why do we switch them? What is the important thing about it? If we don’t understand why they are being used in advertising, and we don’t understand how to optimize them, the product will most likely not perform.
So that means learn as much as you can about advertising or get professional help. To switch the whole thing like 5-6 years ago, that you say an automatic campaign, a keyword campaign. That doesn’t work anymore, or almost not with any product. Advertising makes it possible to get these projects and the products visible, generate organic sales, and generate profiles. Without advertising, as a rule, no sales are generated at all, and with bad advertising, only loss-making sales are generated, and both are not so good. So, advertising is the biggest and most important point after the product selection.
The inventory management
The last little issue might be inventory. You should not go “out of stock”, please never be sold out with the product if possible. Sold out means the product is no longer available. Amazon will keep reducing your ranking, i.e. your visibility, until you have to rebuild it at great cost. Please pay attention to this as well. These are the top mistakes I see over and over again. Much of this can be learned. For some things, you might want to make sure that you might be working with an agency or freelancers. If you have big problems with any of these topics, feel free to contact us. As an agency, we are of course happy to help.
We hope we could save you from the most common beginner mistakes. If you have any questions or if you want to leave the optimization to the professionals, please feel free to make an appointment with us. We are happy to help you as Amazon SEO agency, Amazon PPC agency, but also general Amazon agency.
Do you have questions or need an individual offer? Do not hesitate to contact us.
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