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What Do Experts Have to Say About Amazon Marketplace Merchant Challenges?

Posted by Ron Matheson in Resources

The market for Amazon FBA has become even more competitive in light of the corona virus pandemic. The major reason for this is because sellers on Amazon have been impacted through limitations that the online merchant has in terms of what could be sold so that the primary goods could be distributed to health care workers and other industries greatly in need.

For many years, eBay was the only online selling platform and millions of sellers have entered the world of online drop shipping and selling as a result of it. But in the early 2000s this began to shift over to Amazon and people only sold things like CDs, DVDs and books.

But Amazon has expanded exponentially in the years since then, selling millions of different products and allowing third party sellers to use the Amazon FBA platform. There are both challenges and opportunities with selling on Amazon. Some of the opportunities include allowing Amazon specific paid advertising within the platform, dedicated account executives to work with large sellers, available coaching and tutorials from Amazon staff, explicit rules making it easier for Amazon sellers to navigate certain situations, creating wide level of private products that could increase your exposure to thousands or to millions of potential buyers and improved offerings, such as free repricing tools.

However, the marketplace is competitive to begin with but there are also some restrictions that can limit your success on the site. These challenges include:

  • Barriers to entry.
  • Increasing fees.
  • Complicated procedures.
  • Risk of inventory being classified as unsellable or restricted.
  • Difficulty to get significant positive feedback.
  • Highly competitive selling environment that is only increasing in nature.
  • Payouts that are limited in most cases to every two weeks.
  • Could require the assistance of third-party software tools to stay competitive with other sellers.

If you are thinking about getting involved on Amazon, you should know that most sellers in FBA don’t sell their own one-of-a-kind items. Rather they resell items that they purchased in bulk or from wholesalers. This means that there’s a large degree of competition for the same items and a seller who sees that you’ve been successful with one item could prompt them to dive into your marketplace and you have little to no opportunity to adapt or pivot.