Mistakes are only natural – especially when you’re new to something. But when it comes to eCommerce, mistakes can cost a lot of money.
Some could even land you in legal trouble.
So here are 5 mistakes you should avoid when starting out in eCommerce:
1. Tax Trouble
When you’re new it’s easy to overlook taxes. And thus, you could be selling without collecting sales tax.
Amazon is not responsible for submitting your tax returns on the business name – you are. So make sure you have everything in order. Make sure to fill out your tax information on your seller account and let Amazon collect sales tax for you.
You’re liable for the tax payments, so if you end up not collecting sales tax you could lose a lot of money – and may even get into trouble with authorities.
Make sure your business is tax compliant. Hire an accountant if you can. It helps.
2. Poor Customer Service
You offer a product. Your customer buys the product. End of story, right?
In today’s competitive world, you better bring your A-game when it comes to customer service. Slow responses to customer inquiries, failure to follow up on orders, etc. won’t do you any favors.
A few tips to help you offer the best customer service possible are:
- Ensure you can respond to customer inquiries quickly and efficiently.
- Send follow-ups on orders. For example, send your clients something useful before they get their item (for example a few recipes if you’re selling cooking utensils). And follow up on whether the order has arrived on due date – and ask for the review (don’t offer an incentive for a review, this is against Amazon’s TOS)
- Keep your customers engaged over a longer-term with a drip-email follow up campaign
Luckily, there are some top eCommerce agencies out there that can help protect your reputation as a Seller, for example by resolving negative customer feedback.
3. Getting Your Fulfillment Wrong
Fulfilling orders can be tricky when you’re still learning. You’ll need to ensure you don’t accidentally cancel an order, or ship an order late, etc.
Shipping late can get your account locked up by Amazon – and you’ll need to follow a lengthy appeal process to get back up and running (if at all).
So consider making use of Amazon’s FBA program. Else make sure you get your fulfillment spot-on and avoid late deliveries at all costs.
In addition, you might also think about leveraging outsourced service providers and eCommerce seller tools that can help with your fulfillment.
4. Not Reading The TOS
Amazon’s terms of service (TOS) is a long document. And you’d be forgiven for reading it all the way through. Or not paying too much attention to it.
This is a mistake.
Transgressing any of the TOS can land you in trouble quickly – and cut your Amazon seller career short. No matter how difficult it is to read the TOS, do so – for your own good.
5. Miscalculating Profits
This is an easy and damaging trap to fall into.
You’ve bought items at $20 each. You can sell at $25 each to be competitive. That’s $5 profit, and you’re taking $500 home at the end of the day. Simple, right?
But what about shipping costs, taxes, packaging, etc.
Make sure you calculate ALL the costs when deciding on a supplier and a selling price.
Make use of an eCommerce product research tool like Algopix, that takes into account tax and shipping costs can be super helpful when you’re just starting out. Not only that, but Algopix also shows you in which markets and at what profit margin you can sell your inventory.
So if you’re new, definitely look at boosting your bottom line with helpful software.
There Are Many Pitfalls
These are just a few of the common errors we’ve seen happen to new sellers. To ensure your exciting new career isn’t cut short, don’t make any of these mistakes and think about leveraging eCommerce seller tools that will provide great support to your online business activities.
Software like Algopix can be tremendously helpful. And with friendly support staff who are cheering you on, your chances for success in your new career is heightened significantly.
Click here to get a first taste of Algopix.
Got additional tips or questions? Drop a comment below – we’d love to hear from you.