What\u2019s up guys, my name is Crescent and with Amazon growing by leaps and bounds, expanding their dominance over the online ecommerce marketplace ever since the Covid boom, I continue to see new sellers making the same basic mistakes that are almost always a guarantee to destroy their chances of succeeding on Amazon. So, I want to take this opportunity to go over what the common mistakes are as well as talk about a few new things we need to consider due to the current economic climate, global supply chain issues, and changes in online buying habits. But first, you can avoid a huge mistake by, smashing the like button for the youtube algorithm! Ok, so doing that might not actually help you with your Amazon business, but if you find value in this video, it really does help out this channel tremendously, and I would appreciate it, so thank you. Now, with that said, let\u2019s get started.<\/p>\n\n\n\n
Now, if you haven\u2019t been following what\u2019s been happening around the world lately, with the tensions overseas in Ukraine, Russia, China, Taiwan, and even here in the US, the entire global economy has been affected by a massive shortage of materials and supplies causing massive delays with manufacturing and to compound the problem, increased shipping costs and delays. Now, I\u2019m not going to go into detail about why this is happening, you can research that on your own if you\u2019re curious but as a business owner, especially if you\u2019re new to manufacturing and selling on Amazon, you need to be aware of how these issues will affect your business and how you can deal with them.<\/p>\n\n\n\n
So, first of all, due to the shortage of supplies and as we\u2019re still recovering from the effects of Covid, there\u2019s a labor shortage, too, increased fuel costs, and don\u2019t forget that selling online has grown massively recently and therefore the demand on suppliers has also grown immensely, so manufacturing time and costs have also gone up. So, although I don\u2019t foresee this lasting forever, this is something that you need to factor in when launching a new product. Contact overseas suppliers and get quotes on manufacturing costs and estimates on their delivery times. Also, contact freight forwarders to get shipping quotes and estimated shipping times. These added costs will play a significant role in the profitability of your products and whether or not it\u2019s even a viable product to pursue. And the time frame for delivery may affect your product launch especially if you\u2019re trying to target a specific holiday or season. <\/p>\n\n\n\n
One strategy you can explore is to source elsewhere outside of China. Contact manufacturers locally and compare costs and delivery times. Sourcing locally can significantly cut down on the lead times since you don\u2019t have to ship across an ocean or deal with importation and customs. Finding local suppliers and manufacturers isn\u2019t difficult. I\u2019ll leave a link in the description below on how you can find them if you want to learn more about that. <\/p>\n\n\n\n
Now, don\u2019t get discouraged if you discover the added costs are more than you expected. These added costs affect everyone, not just you. So, in most cases, these added costs will get passed on to the buyer by raising the sale price. Just keep in mind that pricing changes can lag behind the current economy, the current sellers that already have inventory may not have raised their prices yet since they have existing or old stock that was purchased at lower prices or they have existing contacts with their suppliers that allow them to keep their current prices low but once they run out of stock or their contacts expire, they will most likely have to raise their prices too. So, that\u2019s something you\u2019ll need to consider before launching your product and see if you can even be competitive and more importantly, profitable.<\/p>\n\n\n\n
Now, speaking of profit, a huge mistake I see far too often is selling low-ticket products. What\u2019s a low-ticket product? These are products that are typically sold for $15 or less. Now, I can see why these types are products are attractive to new sellers, they are much more affordable and require much less starting capital. But don\u2019t fall for this trap! Amazon charges fees to sell on their platform and if you\u2019re doing FBA, those fees are going to be at least $6-7 alone. Now, factor in your manufacturing costs, shipping, and duty, and you\u2019re left with practically nothing for profit. Even if you consider that your costs are $5, that only leaves you with $2-3 profit. And if you add in any advertising costs, such as if you run any PPC campaigns, you can quickly eat through those low margins. That\u2019s the problem with selling low margin products. You can\u2019t absorb any added or unforeseen costs. Not to mention, low ticket items are almost always way too competitive anyways, and competitive niches lead to very expensive product launches and higher PPC and marketing costs.<\/p>\n\n\n\n
This is why I always suggest making sure that your profit margin is at least $5, ideally $10 or more. If you can afford it, the best strategy is to sell high ticket items. These are products that typically sell for $50 or more. The reason is because the profit margins are almost always higher and due to the barrier to entry, there is far less competition. Another strategy is to sell in the categories that most beginners typically avoid due to the difficulty or added complexity of selling those types of products such as electronics or fragile items. These types of products typically have very high return rates due to the products not working, breaking, or the end users not understanding how to use them or poor instructions. If you do your due diligence to mitigate these problems, you can certainly consider selling these types of products as your first product.<\/p>\n\n\n\n
Now, moving on\u2026 with that said, a huge mistake I see that blows my mind that it even happens in the first place, is not making sure that you\u2019re even allowed to sell the product you\u2019re interested in on Amazon. Amazon has a list of products that are prohibited or restricted. These are products that you are not allowed to sell on Amazon or you need approval ahead of time in order to sell. You can find a list of these products in the Amazon help section and I\u2019ll leave a link to these help pages in the video description below. <\/p>\n\n\n\n
Additionally, some products will require you to get ungated in the category the product falls under ahead of time in order for you to sell. Getting ungated categories in some categories can be quick and easy, you just need to fill out a form or answer a few questions and you\u2019ll get access right away. However, other categories will require you to submit some documentation, certifications or invoices. You can find a list of gated categories here. But keep in mind, some main categories that are ungated may have gated subcategories.<\/p>\n\n\n\n