A Costly Mistake I Did as a New Amazon Seller

In one of the companies I worked for, I was approached by a colleague who asked if I wanted to collaborate with her and start selling on Amazon. Since I have the experience with Amazon and she has experience with sourcing products, I thought it was a good idea. 4 months in and I can say that it was a wrong decision.

I didn’t have any problems with this colleague, we got along pretty well. The two main problems were product-related:

1. I wasn’t fully convinced with the first product we launched. It was due to peer pressure that made me say yes.
2. We launched a product that was similar to what the company was selling. We thought that since there’s demand already, selling a similar product would have the same demand. But that wasn’t the case apparently.

And worse, I was the one who paid for everything. My colleague put in the work–talked to suppliers and all that but it was my own money that paid for the initial inventory, design fee, shipping from China to US, advertising, etc. I invested around $3000 for 900 units (with 3 SKUs).

As of the moment, we’ve only sold less than 10 units and it has been close to 4 months since we launched this product. And today I got an email from Amazon that I have excess inventory for this product.

When you get emails like this from Amazon, it’s time to do something. Here’s my plan of action–

• set up sale prices for the upcoming Prime Big Deal Day
• sell everything at breakeven price during Black Friday/Cyber Monday sale event until end of the year

Fingers crossed I will sell through all units by end of this year, otherwise, I will have to liquidate or dispose of these units.

Why wasn’t I fully convinced?

This product was under fashion accessories category–a highly competitive category with comeptitors driving the price down to the point where it’s no longer profitable. Personally, this category doesn’t interest me at all. I don’t wear any accessories and I don’t keep any jewelry except for one matching set of pearl earrings, a necklace and a ring which I use only on special occasions. I also believe that there’s so much fashion accessories already available in the market, why add to it? Also, the subcategory has high demand but also high competition making it difficult and expensive to compete.

Another red flag is the quality of the products. When we were checking the samples, I’ve seen some quality issues which I raised to my colleague. She said she already talked to the supplier and that the final product will be better. I believed her and went on paying for the inventory. Unfortunately, the first review we got was a 1-star review and it was quality-related. Sigh, I really should have known better.

What’s the moral of this story?

Don’t let someone pressure you from saying yes to a decision when you’re not fully convinced. If you have to back out at the last minute because your gut is telling you to do so, don’t be afraid to do it especially if it’s your money on the line.

Don’t launch products that doesn’t interest you because somewhere along the way, you will lose interest. If you’re launching a product because you see that there’s a lot of demand–be careful because this type of products can be a fad which means after a while, the demand will die down and you’re stuck having a helluva lot of slow-moving inventory. If you can, avoid trendy or hyped products because it might cost you more than you think.

Never launch products if there’s an issue with the quality–no matter how small it is. Find a new supplier and start from the beginning if necessary. Do your research and take your time.

Got questions? Drop a comment or send me an email.