Why Do Businesses fail on Amazon

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By Luciana Oliveira

Thousands of people have attempted to sell on Amazon since it is a giant e-commerce marketplace with a plethora of opportunities. You may get your businesses to scale and acquire millions of dollars worth of sales in no time if everything is done correctly. However, building a profitable business on Amazon is not always this easy. You need to put in the right amount of effort, investment, and patience, or else you fail.

In this post, you will learn about the six typical reasons most people fail to establish a successful business on Amazon.

Let’s take a look.

  1.     Choosing the wrong product

This is one of the main reasons why sellers fail to make a profit on Amazon. We understand that you are eager to start selling on Amazon, but in this enthusiasm, you rush to introduce your product to the market. Finding the right product to sell is the key to building a profitable Amazon business. You need to invest a significant amount of effort and time in identifying the product that is loved by the customers and also suits your business niche. Your Amazon business will go downhill if you don’t sell high-quality products. Do your research to make sure whatever you launch in the market will sell.

  1.     Unrealistic expectations

Whenever you start an online business, don’t expect it to grow right away. Majority of the people start looking for an opportunity to sell online with the intention of becoming rich quickly. Selling online does not mean you will start making big bucks right away. To become a successful Amazon FBA seller, you will have to put in a lot of effort, time, and patience, just like any other market-led business.

  1.     Not Investing Enough

Many businesses on Amazon fail because the seller is unwilling to invest in the business. Not investing enough capital just because it appears as a risk might not be the best policy when establishing your business. Your significant amount of investment is surely going to provide a profit! Put your faith in it and start investing the right way. However, investing a good amount is not it, you must make sure you use the funds wisely – make sure wherever you use the investment, it should yield results. 

You must invest in the best software tools you find online to make selling easier for you. Out of many tools you can use, make sure to find the best automated Amazon repricing tool in the market, the right keyword research tool, and an inventory management software to help you run your business smoothly. There are many tools available in the market that can help you run your business on Amazon smoothly. One such tool is Alpha Repricer. It is one of the best Amazon repricer for FBA sellers and reprices your products every 2 minutes ensuring you boost sales and profit both. The tool is available in the market at a very good price. You can sign up for the 14-day free trial here.

  1.     Bad customer service

Even minor issues on Amazon can bring in negative feedback and reviews from the customers. Amazon is a consumer-focused marketplace, and if you disappoint shoppers, you will have to deal with the consequences. Damaged products, fake items or products that do not last as long as they claim, delivery issues, or even lousy packaging can upset buyers, resulting in a flood of negative feedback. It also stops other customers from getting your product, as most of them read reviews before purchasing your product. In short, bad customer service might lower your sales and earnings or you could even get your account suspended. 

Learn how to offer the best customer service and implement those tips to sustain your business on Amazon.

  1.     Account gets suspended

Each seller on Amazon is subject to specific regulations, policies, and standards that they must follow. If any seller violates those regulations or fails to meet the set standard, Amazon will promptly notice and suspend the account. Regardless of your expertise or the size of your business, you still can’t afford to make a mistake when it comes to lack of performance.

Here are a few reasons why your account on Amazon may be suspended:

  •         Selling banned or counterfeit products
  •         Offering bad customer service
  •         If the account gets hacked
  •         Violating selling policies of Amazon
  •         Receiving complaints and negative feedback from customers
  •         Handling more than one seller accounts

As mentioned, Amazon is well-known for offering top-notch customer service to the audience, so make sure you follow all the guidelines if you want to keep selling on the marketplace.

  1.     Lack of guidance and learning

You can’t do everything on your own. Managing your business on Amazon is not easy, and without proper learning, you might not make it to the top. The majority of sellers fail due to a lack of knowledge, expertise, and a proper plan. They believe that they should just launch the item, complete their tasks and then leave it at that. As a consequence, the company’s growth becomes stagnant and, in some cases, declines.

Learning must never stop; it is essential for continued growth and a thriving Amazon business.


Next time, make sure you don’t believe anyone who claims that selling on Amazon is simple and requires no extra effort. However, you can undoubtedly make your journey easier by learning from others on how they have succeeded or failed. Come up with the right strategy, and use the right tools to help you kick start your business.

Click here to learn more about how you can boost sales and profitability both while selling on Amazon.



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Luciana joined our team as a mum blogger in 2020. A dedicated mum to a lively daughter and a dog, Luna, Luciana brings authenticity and passion to every post. Her expertise in parenting and lifestyle topics offers practical, relatable advice for real-life situations.

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