When I first got into eCommerce and got introduced to private labeling and dropshipping, everything seemed so easy. Well, in reality it is NOTHING but easy, and it is a lot of hurdles to go through before you can create a successful and rewarding eCommerce business.
Watch Out For Free Webinars On How To Sell On Amazon
I am not telling you to not participate in these webinars that so often are advertised on Facebook. Some do give a good overview on how to find a product to private label, source it from China, and start selling on Amazon and eBay.
However, do not listen to their sales pitch that they can teach you how to start a successful eCommerce business selling on Amazon in less than a month.
These are examples of sales pitches I so often see from advertisers on Facebook:
“Learn how to start your own eCommerce business and be able to quit your job in less than a month!”,
“Learn how to make $20.000 per month selling on Amazon using my simple steps. Follow my training and become successful in eCommerce you too!”
Sounds good right? They know how to manipulate and create false hope in order to sell their expensive training that always follow. Who could get a $20.000 (revenue) business going in 4 weeks? It is just not possible!
I started sourcing my first private label product in early June 2017, and also started dropshipping about a month ago, and I cannot by far live off my earnings yet. And I work full-time, almost day and night.
The people giving these webinars all say you only have to dedicate one hour a day to be able to run and grow your eCommerce business. That is NOT the case. It takes hard work and dedication. Nothing is selling by itself.
First you have to find good profitable products to sell and then you have to market them. If you use dropshipping as eCommerce method, you also have to handle the whole ordering process and customer service, which takes a lot of time.
At least on eBay, where customers tend to ask a lot of questions, and always what is already mentioned in the listing. You can take for granted that no one is practically going to read your listing.
Amazon And PayPal Are Holding Your Money
If you are a dropshipper there are other issues no one tells you about. Find out more about dropshipping in blog post:
I watched a number of video tutorials on how dropshipping works on YouTube, and all of them simplified the process for some reason.
This is the scenario that was displayed in the tutorials:
- You list a product for sale on your eCommerce site
(for example a Shopify or WooCommerce store), Amazon, or eBay.
- A customer purchases the product and you get paid for the sale.
- You then order the product from the company you are dropshipping from, using the customer’s payment, and then ship it straight to the customer.
- You take the in-between difference – the profit.
This sounded perfectly fine and an easy process to implement. They all mentioned that you do NOT need any startup funds to dropship.
You do need startup funds. What they do not tell you is that Amazon only pays out every 14th days, and is holding your money for all sorts of things. This month for example, Amazon is withholding $1700 in my seller account for possible customer returns, and other fees.
You May Think eBay Is Better?
eBay is cooperating with PayPal, so all transactions go through them. PayPal is often withholding the money until the customer has received the item. In some cases, I have noticed, that PayPal releases the money after adding a tracking number for the shipping, but far from on all orders. I had PayPal still withholding the money even after my customer received the delivery.
You can probably figure out by now that you will need at least a couple of thousands to get started, even as a dropshipper. It takes a while before you will receive the funds you paid up.
If you are not into dropshipping and choose to private label your products instead, you will need a start up capital to manufacture your products in China (which often is the cheapest option) and then ship them over to the Amazon warehouse.
Find everything you need to know about private labeling here;
Amazon Puts Your Account At Risk Of Suspending For Every Minor Issue There Is
Late Shipment Rate
Like you may have read in prior blog post:
we were not aware of setting a handling time for our product listings on Amazon, and therefore got a late shipment suspension warning. When you do not manually add a proper handling time for each product, Amazon by default, counts on you to ship out the product the day after.
As you understand, it is most unlikely you will receive a tracking number of your order that fast when dropshipping. If you are using the Amazon FBA Program this is not an issue, but if you are using other sources to dropship from, it often takes 1 to 2 days to get a tracking number to add to your Amazon seller account, and with that, confirm the shipping.
Amazon is all about the customer shopping experience, so they want you to ship as soon as possible, which is understandable.
Damaged Products Rate
Next issue that put our seller account at risk of suspending again was a customer refund that we did not reject. First of all, we never received the notification about this A to Z claim and could not explain the situation, so Amazon granted the refund from not hearing back from us.
Second, we had the misfortune not knowing how terrible long it takes for China Post to deliver an item. Our customer ran out of patience, hence why she demanded the refund. I do not blame her.
However, this lead to the customer not only getting a refund, but also receiving the actual product later on. How could we stop the shipping when the item was almost at the customer’s door? There was no way. We just had to bite the sour apple from being beginners in eCommerce, and take this as a learning experience.
Again, this put our account at risk because a refund is counted as, or equal with, a damaged product according to Amazon. When this happens and you are a new seller, this strikes your overall rating hard!
One Bad Review And The Ship Is Sinking
This is almost the case. At least it feels like the ship is sinking right now. We were unlucky to get hit by a hater – one of those customers that just want to write that bad review although you are trying EVERYTHING to make things right, even before the review happens, and afterwards.
In this case we even gave him an extra item despite the fact that he did not provide us with picture proof that his phone case arrived broken. Note, that it was a soft TPU gel case, which doubtfully can break in the first place.
We wanted him to be happy, so we sent him a new case even that he refused to send us the picture proof. He promised he would remove his bad review, which he EVEN WORSE wrote in the seller feedback section, and not in the product section as supposed.
Ask For A Strike Through To Remove Bad Customer Feedback
A “strike through” is our hope as I write this post. I want to inform you about this option if you ever find yourself in our shoes. After trying to submit an automatic request to remove the negative review and got it back declined as fast as submitting it, my partner called Amazon’s support to speak with a customer service representative, a real person instead of all their Q&A’s.
This person was very helpful and actually agreed on that we had done everything in our power to make things right with this customer. The fact that the customer had promised to remove the review in exchange for another phone case, but never lived up to his promise, made the Amazon representative offer us an option to email a special support team on Amazon and ask for a “strike thru”.
A “strike through” means the review gets deleted from Amazon’s site. Of course, this has to be decided on by Amazon’s support team. We are still awaiting their judgment. If you get hit by one of the “hater” customers, you can try and email: email@example.com and ask for a “strike through”.
The review score makes a mayor difference in the number of sales. Amazon prioritize sellers partly based on their review score, and since we did not have many reviews, one bad review hit our overall score very hard. Now, when we are back at 100% 5 star reviews, we see a big increase in sales.
I hope today’s post helped or helps someone to either avoid making a mistake having unrealistic expectations on the start up process of an eCommerce business, or to avoid getting their Amazon account suspended because of a bad review that was not deserved.
If you have any advice to an eCommerce beginner like myself, or own experience of other eCommerce problems that can arise, please leave a comment below. I would love to hear from you.
About the Author
My name is Stina Pettersson. I am the founder of Make A Living From Home and Get Happy e-Deals. I am the author of the articles on this site. Originally from Sweden, but love the warm weather in Florida where I now reside.
I help people to start their own online business and make a living from home. I am especially fond of helping people interested in eCommerce – Amazon FBA, Dropshipping and Online Retail to get started and make a good living from home.
I hope I will get the honor to help YOU achieving your online success.
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