You are looking to make your mark in the e-commerce domain and have your Amazon account up and running. Quite likely, you start to believe that you’ve got the Amazon marketplace all figured out. Well, the good thing is that if you’ve come out of your first holiday shopping season with some profitability, then you are doing quite well. However, there are certain issues that aren’t grasped easily even by the most experienced Amazon sellers. We will take a look at some of them in this piece.
Selling on Amazon is a fairly complex procedure, to say the least. There are certain traps that not even the veterans are capable of easily avoiding. However, knowing what they are is the first step toward eventually being able to navigate your way around them. We also provide some guidance on how to take care of these issues.
1) Tax Setup
In all honesty, it is shocking just how many sellers do not enable options for state tax collection on Amazon. They mistakenly expect that Amazon will itself take care of all sales tax issues arising from sales on its platform. However, that is not the case at all.
While Amazon doesn’t mind collecting your state sales taxes for a small fee, it is up to you as the seller to decide in which states you want Amazon to collect the tax. And you will have to be the one managing tax remittances to appropriate jurisdictions around the country. As the seller, you can choose not to collect the state sales tax if you decide to absorb that as a cost of doing business. But tax remittance responsibility is not optional. So, you have to designate your account to collect state sales tax in different states of your choosing.
What to Do?
Once you have signed up for a new seller account, do the following.
- Go to the SETTINGS tab and select TAX SETTINGS.
- Pick the states in which you want Amazon to collect sales tax for you.
- Select “A_GEN_TAX” when you are on the “Use Default Product Tax Code” setting page.
Most sellers tend to ignore bottom line profits and focus instead on the top line sales numbers. But there are absolutely no benefits of doing so. Except for maybe satisfying the ego and getting a few volume discounts.
What to Do?
In order to achieve healthy profitability, you need to account upfront for all the costs and focus on the bottom growth. And for that to happen, you will to keep hawk-eye on the profitability as well as knowledge about incorporating overhead and indirect costs into the calculation of profits will work as a plus. There will be some not-very-obvious fees and product write-offs that you will have to account for.
In short, don’t just look at your overall sales numbers and margins. Consider every SKU (Stock Keeping Unit) that you sell on Amazon as having its own profit & loss structure, market forces, and type of competition.
3) Listing Optimization
For most sellers, the building and optimizing of listings is a one-time thing because they turn their attention to other operational aspects. This is quite understandable.
Here is what you should do to improve your listings.
- Utilize the Sponsored Ad Campaigns
These reports provide you the exact keywords that Amazon customers used while buying your products. Examine these reports periodically to find keywords that will help you boost sales by ranking your product pages better.
- Provide Answers to Past Product Queries On Your Product Page
Paying proper attention to the queries received from Amazon customers is vital. This is because if customers are asking product-specific questions, then addressing these in reasonable detail on your product page can help enhance customer conversation.
While there will always be significant challenges to selling (and selling well on Amazon), having an idea of the kind of issues that are likely to pop up will put you in a better position to tackle them.