9 Ways To Completely Fail At An Amazon FBA Business
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Last year I started an Amazon FBA and Ebay reselling business and it failed– miserably.
In retrospect, I see where I went wrong. There were so many things I screwed up. It makes my stomach actually
In my defense- it was my very first business. I started the business with a brand new boyfriend who had sold on Amazon and eBay in the past. Because he already had experience, I let him take the reigns.
Starting a business for the first time with a brand new boyfriend who is now also your business partner… what could go wrong?
1. Listing product incorrectly
Obviously, you want to list your products correctly. It’s important that you pay attention to the details and list in the correct condition.
For instance, you might have a product that is still factory sealed but the box is a little bent and shows wear. It’s better to list an item as “Used-Like new” and then over-deliver a great product to your customer as opposed to delivering a visibly worn product to a customer who ordered something “Brand New”
My business partner and I disagreed with this principle. Selling an item “Brand New” on Amazon means a higher cash return. I was more concerned with the customer experience. My partner was more concerned about profits.
2. Sell broken product
It’s vital that you check all your products before you list it. We sold a Brita filter and sent it across the country only to have it returned broken. Sure, items get damaged during delivery but we didn’t know if this was one of those times because we didn’t inspect the filter before we sent it out.
Check every inch of your product before you list on Amazon or eBay. After you list the item things need to be stored in a way that won’t damage it. Shelves are a great place to store your products. Check the item thoroughly again before you officially send it out.
Any product we had left over that wouldn’t move fast on Amazon or eBay we sold at local flea markets. I refused to sell items that were broken. My partner, on the other hand, had no problem conning people into buying something that was broken.
I believe in karma, especially in business. I believe that in order to have a successful business radical honesty and transparency are key. Because my business partner and I disagreed with this principle, I refused to sell at flea markets with him any more. I didn’t want to be a part of it. It was wrong in my eyes.
I can’t speak from his perspective because I only have my own experience. I will say I believe that we’re all doing the best that we can from our level of perception and I know he had his reasons. We can agree to disagree on the matter.
3. Shipping items incorrectly
I really hated some of the items we shipped out. The products look like they were inside garbage cardboard.
I discovered the concept of a “franken-box” after I had closed up shop on my business. A “franken-box” is a box cut down to properly fit the product your shipping. It would have saved us a ton on shipping costs and saved us time because we were always looking for the perfect box to fit the product.
4. Not taking pictures of serial numbers on products
We sold quite a few fancy sous vide cookers. Those sold like hot cakes. We had a cooker returned to us that was not ours. The sous vide machine that we received looked like it had been used a LOT and it was broken.
It was clear that the buyer switched out his old and broken sous vide machine with our new one. Because we didn’t take pictures of the specific serial number there was nothing we could do. We lost over a $100 in sales because of it. It was a bummer but we sure learned quickly to never let that happen again.
5. Sourcing bad product
My boyfriend at the time demanded that we source our product from a liquidation warehouse that was almost 400 miles away from where we lived. If it weren’t for the 12-hour car rides with a three-year-old, gas money, and huge miles put on my older vehicle– it would have been a steal.
The truth was that it wasn’t worth the time and money for the 2-3 great items we would get and then the hundreds of broken or crap items we’d receive. A liquidation pallet would cost us about $150-$200 each. The gas to get there and home would add another $100. The food and snacks for the trip would add another $40+.
Factor in all costs. Sit down and decide if you’re able to make a profit from the products you are sourcing.
6. Shipping items out late
Towards the end, I wanted to business to end. I hated it. I hated the way it made me feel. I was in business with someone who didn’t share the core principles and beliefs when it came to business or life.
I started shipping out items late– partly because I would forget but mostly because I didn’t care. I wanted to go out of business. I wanted Amazon to close down our shop.
Don’t ship out items late.
7. Not responding to customer inquiries promptly
Amazon grades you on how fast you respond back to customers and resolve issues. Answers customers as soon as possible. I’d say answer the customer back immediately if at all possible.
Customers will also leave you a bad review if you don’t respond quickly and properly. Remember, the customer is always right.
8. Unnecessary overhead costs
I was easily persuaded to spend over $700 on Legal Zoom services to make our business a legit LLC before we had even sold one product.
I’m not telling anyone to bypass the proper legal channels to set up a business. I’m just saying that, if I had known, I would have gotten a tax ID number from the IRS website (which is free) and worried about forming an LLC once I had scaled my business.
I could have filed the LLC paperwork with the state, including a registered agent, for a fraction of what Legal Zoom charged me. Don’t be like me– do your research.
9. Starting a business with someone who doesn’t share your same beliefs and principles
Our Amazon FBA and eBay business ended quickly– as did our relationship. When it came to our businesses, we disagreed on huge things. I won’t say one of us was right or one of us was wrong. We simply had different ways of doing things that didn’t mesh well together.
My first business was a mess that failed miserably and deliberately at the end. I know I used the word, “fail” but I don’t really believe in failure. The lessons I learned from started a business for the first time were invaluable.
I learned how important honesty and transparency are to me when it comes to running a business.
I learned how to file self-employment taxes for the first time.
I learned how to factor in total product cost and the return on investment.
I learned that retail arbitrage is WAY more my game than liquidation.
I promptly dissolved my old LLC and began my own Amazon FBA and eBay reselling business and it’s going well. The only way you can actually fail at a business is if you give up or if you don’t apply the lessons that you learned along the way.
Thank you for reading and if you have any first business horror stories comment them below– I’d love to read about them!
Hey, I'm Nicole
I help busy moms find ways to make money working from home