Top 5 Reasons People Fail at Amazon FBA

1). Picked the wrong product

This is the NUMBER 1 reason people fail at FBA. They rush the first part of doing product research and pick the first product that looks OK. Then when they actually try to launch the product they realize the product is not that great after all. They will figure out there is either too much competition, or barely any demand for example. Or even worse: They did not check if the product was seasonal, and that cool inflatable toy they researched in July is not doing as much in sales as in October!

Solution: I spend at least 1 month on product research as there are loads of things to look for when picking a product to sell on Amazon FBA. I have written a very detailed guide
here
.

My product research tool: Jungle Scout 

2). Set the wrong expectations

Many people think FBA is a great way to get extremely rich overnight and work 1 hour a day from your hammock on some tropical island. Of course, this is not the reality. Amazon FBA is a real business, that requires a lot of hard work and dedication. Therefore you should treat it as a real business. In business, everybody will make mistakes. It’s up to you how you handle these mistakes and learn from them.

Solution: Treat Amazon FBA as a real business & put in the work.

3). Low-quality product

I have made this mistake myself, and there is pretty much no coming back from this. Amazon customers are very picky, and most will not buy products that have 3.5 stars or less. This is very obvious: Nobody wants a low-quality product. However, if you are new to sourcing products in China, then it might not be that easy to manufacture a high-quality product. There are loads of things that can wrong in this phase, and there is a good chance your supplier will try to screw you if you don’t watch out.

Solution: Always, ALWAYS! Have your production inspected while it is still in the factory in China! As soon as your products leave the factory they are yours and your Chinese supplier will not take them back. Therefore it is essential you find any defects before you pay the 70% balance. I use a third party inspection company that has paid itself back a million times.

Summary of the inspection report:

4). No diversification

You probably heard this one before: “Don’t put all your eggs in one basket”. If you have 1 successful product on Amazon; Make sure you expand ASAP and have 5 successful products running! In case one of them drops for whatever reason, you will still have 4 profitable products to rely on.

But this also goes for sales channels. Amazon FBA is great but you don’t want to rely 100% on 1 sales channel. Ideally, you want to spread out your sales over multiple sales channels and even have your products in some big box stores! This is very much a long-term strategy, but you can start right now by setting up your own Shopify Store. Which I have written a tutorial about here.

Solution: Diversify! ( well duh lol ). Make sure you have multiple products & sales channels!

5. Falling for the hype

How many FBA sellers do you think there are around, that have a huge amount of fidget spinners left over? Don’t fall for the hype! Your goal is to create a long-term sustainable business. Sure, if you manage to spot a hype exactly at the beginning you can make a serious amount of profit. But since most of us are beginners here; there is a good chance you will launch your hype product right at the peak, when it’s already fully saturated.

Google Trends check – Fidget Spinner:

Solution: Use Google Trends / Jungle Scout to check for fad/hype products, and stay away from them!

Top 5 Reasons People Fail at Amazon FBA
Rate this post

Related Posts

4 Comments

  1. I just recently discovered your website and its awesome. My very first product is currently being produced in China. I paid my 30% and my suppliers sent me the first product images and I told them can you send them to me so they did and it looks great and I gave the green light to continue the production.

    1)My question what is the deadline to send inventory for first time sellers like me?

    2)My product is done on November 28th. 12-15 days air shipping. Is it too late for Christmas holiday shopping?

    3) What do you do when you get an inspection report? If I see anything wrong I want to fix it, can I ask the suppliers to fix or replace anything that is major and minor? will that be an extra cost? What did you do in your case? Basically, how do you go about it when it comes to the inspection report.

    4) Do you know any freight forwarders? is it expensive during Christmas time to use freight forwarder if yes how much does the price go up?

    1. Hi mate,

      Congrats on the first shipment, very exciting stuff!

      1). There is only a deadline for toys in Q4.
      2). You might catch the last bit of the holiday season. But there are usually check-in delays right around Christmas
      3). You make agreement with your supplier beforehand, about max defect rate and stuff. If the report show the defects are higher than your agreed rate, you request them to redo the shipment. You have not paid the 70% yet, so you have a very strong negotiating position. I wrote a longer guide about this process here.
      4). I use Flexport.com. Yeah, prices are high right now. Not sure how much higher though

      1. Couldn’t we just go for the 0% defect rate? We Call inspection, he does his job and removes all the major and minor defects and supplier just replaces them with new ones without defects? We have zero interest in keeping these. Even going as far as saying to inspection guy to just remove them whether the supplier replaces them or not because those are cancer for our business.

        1. Sure you can put 0% defect rate in there. But a couple of defects are normal. So your supplier might not agree with the 0% rate, as he knows that he will then always have to redo units.

          However, my inspector only inspects the units. She does not remove them, that is the task of the supplier.

Leave a Reply

Your email address will not be published. Required fields are marked *