Actually knowing if the “factory” you’ve been speaking with is really a factory can be surprisingly hard to determine.
Many of the so called “manufacturers” you find on Alibaba actually turn out to be middlemen who jack up the price to make some profit for themselves before they pass your order onto the real manufacturer.
If you’re interested, there is a great article about it on medium that clearly explains the difference between manufacturers and trading companies.
I had one case in which I was speaking to several different potential suppliers who were sending me different samples of a product I was looking to sell.
When I received the different samples, they all had strange similarities even though all the suppliers claimed have their own factory.
After opening the devices up (they were electronics), they all had the same serial number inside…
Why would they all have the same 16 digit serial number if they all came from different factories?
After a bit of research I figured out they all came from the same factory!
These different companies were actually just trading companies outright lying to me.
It wasted so much of my time, but was a good lesson as I am now extra careful about it by vetting my suppliers before I even begin speaking with them.
Product Quality Issues
One thing you’ll quickly become aware of selling on Amazon is that product reviews are arguably the biggest single factor that will determine if people will click on and buy your product or not.
The Pew Research Center estimates that over 50% of adults check reviews before making any online purchases, a number I would say that is ever higher on Amazon.com.
Basically,the importance of reviews cannot be underestimated.
For this reason, product quality REALLY DOES MATTER!
If your products do not meet a buyers expectations, then they will be more likely to leave a negative review.
More negative reviews will affect your sales rate rate and this will leave less money in your pocket.
So yeah, it’s super important.
I found this out the hard way by selling an electronic product with a very specific function.
The first order of 1000 pieces was great. Customers loved it and it was selling well.
The second order I had some more refunds than I expected and some negative reviews, but not enough for it to drop under a 4 star rating and really start hurting my conversion rate. So it still sold well.
The third order was horrible!
I started getting a whole bunch of returns, lots of negative reviews and my NCX rating spiked and the listing was shut down several times.
It also effected my feedback score, and if it continued could actually jeopardise my right to sell on Amazon.
It was a massive headache to say the least and caused me a fair amount of stress.
I’ve now fixed the quality issues with a new version of the product with a different factory but in doing so I had to abandon the old listing with 300+ positive reviews and start a new one.
What a pain!
So be aware, quality issues do occur even when things look great. And once they do, they are a really big pain to fix that will cost you time and money.
One reality of selling on Amazon is that you are selling on their platform and not your own.
This means that they can revoke any of your selling privileges in a second with little to no appeal.
This happened to me after an unfair trademark violation claim by a competitor.
Even though they had no registered trademark for their product name (and later when they applied they were rejected by the USPTO), all they had to do was fill out a form on Amazon.
Within an hour my product was put in what I call:
😭 😭 😭AMAZON JAIL 😭 😭 😭
The burden of proof was then left to me to prove I did not infringe on the competitors trademark…
It sucked big time.
It took probably 20 hours of solid effort and between the slow communications from Amazon a whole month to get overturned.
And in this time I had lost thousands of dollars.
It taught me a crucial lesson about selling on Amazon though:
Selling on Amazon is a privilege (not a right) that can be taken away from you anytime
Unfortunately, this is just a reality of selling on their platform.
Getting Threatened By Competitors
Amazon.com is a very competitive market.
Niches can fill up with other sellers very quickly and before you know it, the whole market is oversaturated.
This brutal competition has led some sellers to employ black hat tactics such as:
Fake Copyright Claims
Phoney Negative Reviews
I was subjected to the last one on that list one day.
I opened my inbox and saw a message in Chinese characters.
I thought it was most likely spam but I was curious and ran it through a translator which came out in english as this:
“Very good, since you insist on selling our shop, we will also start attacking your shop until you kill all your listings and kill your shop, we walk and stare at you, let’s see!”
Apparently “walk and stare at you” is a big threat in Chinese not to be taken lightly.
I didn’t respond to the threats, and as far as I can tell they have not yet acted upon them.
But, the chance that someday they will is still there and does honestly worry me.
So whilst Amazon FBA is an excellent business opportunity, it is not a walk in the park like some would lead you to believe.
And to be honest the above is just some of the issues I have faced while selling on Amazon.
There are others I have not spoken of, and undoubtedly there will be more in the future.
But, with all this said, in spite of these troubles and headaches, I would still consider Amazon FBA as being a fantastic business opportunity in 2020.
Whilst there are hurdles you will undoubtedly face, you can overcome each of them, making the rewards feel all that much better in the end.
Want to know how I overcame these challenges and kept going onto success?