Are you looking to build an e-commerce store? If so, selling through Amazon can be a great way to get started. You will want to take advantage of Amazon’s FBA program which is growing exponentially.Amazon fba freight forwarder ClearitUSA can help you through the logistics and customs clearance. However, you must understand that the metrics and operations of an Amazon FBA store are not the same as traditional e-commerce shops. For a successful operation through Amazon FBA, there are mistakes you must avoid before purchases are made. They include the following:
Failing to Understand How the Amazon Marketplace Works
Unlike traditional of doing business online, selling on Amazon works differently. Amazon established the third-party marketplace to complement its retail business where it gets products directly from brands. The Amazon Marketplace lets the e-commerce giant collate lots of data that they use for developing its sourcing strategy for the years to come. The marketplace organises products to allow sellers of the same item to show up on the same product listing page. As a result, customers can easily compare offers of the same item and choose what they like.
Not Understanding the Products that Drive Profit and Loss
A lot of companies that purchase seller accounts do not clearly understand the parts of the catalog that are making money and those that are not. Amazon sellers may try to improve the account to make it appealing to buyers before the sale. They do this by growing top-line revenues quickly without considering its effect on the bottom line. Thus, if you want to buy a seller account on Amazon, you must understand which SKUs generate profits and losses.
Not Securing Sourcing Relationships
As you start looking for seller accounts to buy, you must understand the products are sourced through exclusive or semi-exclusive relationships with a brand. You must get written confirmation on products that come with some sourcing agreements to ensure you can continue to source such brands. You don’t want to be cut off by brands right after you complete the account transfer.
Failing to Account for Liabilities in Terms of Tax Collection and Remittance
Some sellers are not properly collecting and remitting sales tax in all states tax in which they generated tax nexus. Consider hiring a tax attorney to assess a seller business you are eyeing to buy before the sale to avoid future bill for back taxes. Also, if you are looking to buy an Amazon seller that imports products from abroad, take the time to review the import duties paid on the account in the past couple of years.