Constantly Operating At a Loss
Please tell me where to start. I am a new FBA Seller. I have sold approximately $350 worth of merchandise but made NO money. It all goes to Amazon for one reason or another. When I raise my prices, I get told that I can’t be a buy box winner unless I sell at a lower price. What am I doing wrong? At the moment I owe Amazon $21.
Thank you
Constantly Operating At a Loss
Please tell me where to start. I am a new FBA Seller. I have sold approximately $350 worth of merchandise but made NO money. It all goes to Amazon for one reason or another. When I raise my prices, I get told that I can’t be a buy box winner unless I sell at a lower price. What am I doing wrong? At the moment I owe Amazon $21.
Thank you
64 replies
Seller_CW0P5hgbsiqWX
FBA and Business Management:
Are you managing your business? Are you stuck in believing all the hype in using FBA? Businesses run on profit, and it costs no more to succeed in online retail sales as it does to fail in Online sales.
Amazon is a for profit company and knows how take as much of a seller’s profit as they can by promoting offers that are supposed to make things work better for you. But in reality, they are all designed to fatten their bottom line and may be of no help at all.
Amazon tells you how easy it is to use FBA so you can cut down on down on your workload, and new sellers do believe it, then fall into the trap. Here is what Amazon does not say up-front to sellers. Which must be done to have success in retail sales.
Product and Selection:
- The three most important things in online retail sales are product, Product, and PRODUCT. You bought the product to sell based on the desired profit to be made. But will it be a good seller?
- Sell products that buyers want and need, they sell themselves with no additional work involved.
- Always test sell the product for a month or more yourself to see how well the sales go. This way you know what your potential future sales will be, and if the product can withstand all the fees Amazon FBA will assess your account, and still make your original desired profit.
- Just sending a product to FBA with no test selling is foolish, and Amazon knows this, but counts on the profits made from sellers who do no test selling.
Product Pricing: Lowest:
- It is important to understand how selling and pricing on Amazon work. Amazon knows that the lower offering price always sells before a higher price offering, and this is important to remember.
- When you purchase a product to sell, always calculate your desired profit to be made.
- You know the product wholesale cost, all selling and shipping fees involved, and what price others are offering the product for.
- Can you purchase that product and still have the lowest price offering on Amazon?
Product Pricing: Competitive:
- Knowing the lowest price offering sells first, Amazon wants you to be competitive, or sell at a higher price, in the average pack with other sellers.
- Amazon makes more profit from your sale at a higher price.
- Amazon can help you be competitive by offering you tools like their repricer and buying into advertising.
- 3rd party software can be bought to keep you competitive in pricing.
- However, all the while sellers are focusing on competitive pricing, that lowest price offering seller is getting all the sales.
The Advertising Trap:
- If you have a slow selling product, Amazon suggests buying some form of advertising.
- Remember, slow selling products are usually a result of poor product selection, or selling a product that 100 other sellers are selling.
- No vendor of advertising, not even Amazon, will tell you is the bottom line. Advertising will not help sell a dead product that buyers don’t want, and if you have a good selling product, itis not necessary. It is up to you to decide just where your product fits in.
- Any advertising you buy comes from the Future Profits which have not yet been obtained from the product sales.
- Now calculate out the remaining profit each item sale will yield as of today.
- Then compare that remaining profit to what you planned to make when you purchased the item.
It is the law of diminishing returns. If you don’t manage it, it will destroy your business. Way too many Amazon sellers think online selling is simple. They believe all the hype they read, buy a product, list it on Amazon, and make a fortune. Strangely enough, they fail, because they do not know how a business is run.
Think it over, somewhere in the above is the cause of your dilemma and solution to future sales.
Seller_U6YKK4OOgB7e7
SELLC has some great pointers for you to read and follow.
However: not to be a NEGATIVE NELLY, but it is very difficult to make any serious money on amazon. I don’t care what hype you’re buying into about FBA. But I’m not FBA, I’m FBM. So I’m no expert on FBA. so take what I’m saying for what it’s worth.
I’ve been selling here since sometime around 2005. Sometimes, I am making money, sometimes I wonder why I’m still doing this. Amazon’s fees increase every year, the post office is going up, up, up on their rates. Inflation is making everything you buy to resell more expensive. Taxes, taxes, taxes, what more can I say about that.
Be very choosy about what you list. If you are not making money on a certain product, stop listing it. find something else to list that might make you some money You’ve got to be brutally honest to make money selling here. If you are kidding yourself, wow, I sold something, I’ll be rich in no time, you might never make any serious money on amazon.
And if you do start making money, come back and tell us about it. I could use some pointers myself.
Seller_oFB9aOsFKhRu4
I have 2 friends who make WAY more money on FBA than I do and both told me repeatedly when I started “GO WIDE NOT DEEP”. Meaning but 1 or 2 each of 10 products, not 20 of 1.
Then when AZ says you can’t raise your prices, you’re not so commited by what you have already purchased that you can’t switch products ASAP.
Go Wide NOT Deep - so when you’re out priced by competitors you can set your lowest profitale price and wait them out. Meanwhile your other product selections can carry the brunt of the bills.
Just my 2 cents. I’ve been doing that for 12 or 14 years now.
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Seller_i82wV4v2ctjvG
I hope you also factor in the costs of goods sold, meaning, how much time and money you spend on sourcing the product you sell here. You can put that number into the FBA revenue calculator, which Amazon is kind enough to provide 
One thing I noticed over the past, sometimes when you think you see an FBA opportunity, others see that too, and by the time your shipment is received and actually truly available (can take months, with what they call fulfillment center transfers, but nothing is really transferred, it just sits somewhere) you notice that the competitive landscape has changed. More competing offers, lower prices.
Seller_ZXR5i7ghwDKJB
First look at your balance from Amazon if you have negative balance. If you do, make sure they don’t charge you and bring to next period and deduct your profit from the negative balance. I have been selling in amazon for over ten years, it happens to me and many sellers, they don’t know this way is paying twice. Check it and contact them if you find out this double paid method.
Seller_3N7yVnTXPzLkL
You have gotten good advice from the posts so far.
The best I can offer is to not even bother unless you have a unique product which is not represented by competitors who are already selling on the site.
A new seller has disadvantages over established sellers.
Me too products have little chance of getting traction unless they cut prices AND pay for PPC advertising, which usually means operating at a loss, because not only are they buried in a mass of products, they are usually not getting the best prices.
The “go wide” advice is correct on the sell side of the equation, but is weak on the sourcing side.
The best way to make a profit selling on Amazon is to have an existing business which is successful. Have established sources which you are buying from in volume. Use Amazon for incremental business which can be handled with minimal additional costs. And not make any substantial Amazon specific investment until you are established on the site.
Some businesses which meet these recommendations are not going to succeed on Amazon in any meaningful way because of the enormous number of desperate newbies who come to the site and lose money.
Seller_XXsyGaPriYdmX
I have long been a believer that the buyers control the price and the seller controls the COGS. Can you lower COGS?
Are you doing FBA? Tried FBM?
You are still small. Make spreadsheet and list (for every product)
COGS
marketing
Fulfillment
Returns
Shrinkage.
Is the number positive? If not, adjust what you can. If you cannot make it positive, the product will not work in the Amazon channel.
Seller_g71s3lTmvazjk
For some this took 25 years to learn.
Welcome to the Land of the Enlightened, my young friend.
Seller_ElLvXGT2MFFhC
Lively, I have been pi$$ing around selling on ebay as well as Amazon. I have made over $3,000.00 in about 3 months by 1. Buying at the right price 2. Selling at the right price 3. Making sure the product that I am buying is even in demand on Amazon 4. Smaller light weight items to keep your shipping down. 5. Always make sure (when buying) that you are able to sell it for triple what you paid. Those are my rules that I have come up with for myself these past few months. I hope it helps.
Sincerely,
Darcy
Seller_O5II1aDRmKRXI
Talk about race to the bottom, did you watch a TikTok and start RA or something?
