Reasons Why Amazon FBA Fails – 5 Most Common Reasons Why Amazon FBA Fails
You always have to remind yourself that not everyone is successful after setting up an Amazon business. Most of them had chosen the rough roads, but that doesn’t guarantee or signify anything. It takes a lot of sleepless nights studying what product to sell, what strategies to use, and how the Amazon algorithm works.
The “if you have done everything and nothing works, you are the problem” saying is a sham. If you have an FBA business, continuous research is needed for you and your business to keep up to date. But if you think you have done everything, it is not you but your product of choice. Before anything else, you have to know the success rate of FBA.
What is the Success Rate of FBA Business?
If your goal for establishing an FBA business is to get rich ASAP without anything else in mind, then you are more likely to fail. One of the many reasons why Amazon FBA fails is the wrong kind of objective, which is just your starting phase. Break the stigma of anything online business is money.
FBA business is just like the traditional street businesses minus the physical interaction and shop visiting. One of the many advantages of Amazon is it is a trusted and established flatform compared to others. And just like other businesses, the profitability and success rate of FBA business will grow over time. What could go wrong?
5 Reasons Why Amazon FBA Fails
Your drive will be your strength as you move along your Amazon FBA journey. Not to mention the hefty information and guide readily accessible to give you an idea on what to sell, how to sell, and possible scenarios you might encounter. The potential in Amazon FBA is just perfect.
But your drive can also be your downfall. There’s nothing wrong with being excited and wanting to earn, but your drive can blind you to what you should focus on. Product is everything in Amazon FBA, and if you are unsure about your product, your business will be off-putting too.
1. FBA Fees
Number one in 5 reasons why Amazon FBA fails is the expensive FBA fees. If you are just an FBA business beginner, money is everything. FBA is an amazing program that can aid you in your business, but it isn’t free. Some individuals may not afford that kind of money right now.
Due to the apparent fact that there are a lot of fees to calculate, this scheme is not appropriate for low-cost items. It is best to weigh things and conduct deep research on how and what to sell on Amazon’s FBA business to avoid losses; if you want to know the fees and how to calculate them, the FBA calculator can help you.
Number two in 5 reasons why Amazon FBA fails is the tight competition. Since Amazon is a still an operating and well-trusted platform, with hundreds and thousands of businesses selling daily, it makes the competition a lot worse. You’ll need more than a unique product to attract the audience.
Have you ever heard of Amazon Buy Box? You will also be competing with them. Buy Box is where clients or customers buy bulk products. The highest the sellers’ Amazon ranking, the greater the chances of appearing to suggested Buy Box sellers and more profits.
Number 3 in 5 reasons why Amazon FBA fails is the lack of control from packing to shipping and delivery. You have to consider so many factors in Amazon FBA, such as sending your products to the Amazon warehouse and processing the inventory.
During this process, there are some instances that your product might be misplaced, lost, or damaged. You also do not have any control in packaging your products, whatever materials they have used or however they have prepared your products. You’ll never know unless a customer leaves negative feedback.
4. Mixed Management
Fourth in 5 reasons why Amazon FBA fails is the mixed management. What is commingled inventory? It is one of the many features of Amazon FBA that allows sellers to have the Amazon warehouse label their products on the seller’s behalf. It saves a lot of time and effort on the seller’s end.
There have been previous concerns resulting in Amazon FBA sellers reporting that there have been counterfeit products mixed with their original during the packing phase. Of course, the FBA sellers will suffer from the given ratings.
5. FBA Protocol
Last in 5 reasons why Amazon FBA fails is its strict protocols. FBA sellers must meet Amazon’s own set of requirements for products before accepting in the warehouse. Before shipping your items to Amazon, ensure they’re properly packaged and marked. Any of the finer details can be difficult.
Read more Amazon FBA tips on this blog: Your FBA Shipment Checklist: What Is It About and How to Use It?
Frequently Asked Questions
What is the Downside of Amazon FBA Business?
The FBA inventory lag time has been a problem for some sellers. Products are stuck in Amazon inventory centers that last for days, even weeks. Which eventually leads to canceled orders from the customers.
Is Amazon FBA Worth a Shot?
Yes, the Amazon FBA is worth taking the risk and building your own business with the platform. Amazon will do the product packaging and shipments for you together with the FBA, and you will still earn a profit from it.
What Percentage of FBA Sellers are Successful?
Starting your own brand can sound straightforward, but if it is done right as it should be, and you work with the right people. All your hard work will not be in vain and will pay off. In recent statistics, about 85% of Amazon sellers profit from FBA.
The bottom line is it’s a matter of personal preference – some FBA sellers find the FBA program more helpful, and some may not. It is essential to have your options open, and what better way for you to have your choices ready than to read the reasons why FBA fails.
The five reasons why Amazon FBA fails were not discussed to discourage you but to help you weigh your potential options. As much as possible, try more schemes and programs for your FBA business in order to understand how Amazon works fully. With these, you can do better in your FBA business.