Amazon FBA Mistakes That Will Cost You Thousands!

Janson Week 33

Starting an Amazon FBA business requires a lot of hard work, and even the most experienced sellers can make mistakes that can be costly. In this article, we’ll be discussing some common mistakes that you should avoid to ensure the success of your Amazon FBA business.

Amazon FBA Mistake 1: Choosing The Wrong Account

One of the most common mistakes that people make ends up costing them their entire Amazon FBA business, because it’s so big that it can end up getting you suspended and banned from selling on the platform.. before you’ve even started.

When you first create your Amazon seller account, you’ll be asked what type of business you are – a private company, a sole trader, or an individual. Whilst it might seem like the best answer to choose is ‘individual  if it’s just going to be you selling on Amazon, this is actually wrong, and choosing this option will result in your account getting banned within weeks. And that’s because Amazon defines individual accounts as those that have been set up by people that are looking to sell a few products without making a profit… I know right, it’s not obvious at all is it?

Making this mistake will result in a ban as soon as Amazon figures that you’re here to make money, and in the example of a few people that I know, that ended up in them being unable to sell on Amazon at all.

So, the lesson here is, when creating you Amazon seller account, choose the limited company or sole trader options, and not individual.

If you’re not sure which one is right for you, consider booking a free call with Osome, an accountancy firm that specializes in Amazon FBA.

Amazon FBA Mistake 2: Not Doing Product Research Properly

Once your Amazon FBA account is setup and you’ve been verified, you’ll undoubtedly be thinking about what it is that you want to sell. Doing product research is time consuming and it can be pretty boring at times, but it’s one of the most crucial parts of your business to get right, so care need to be taken as much as possible.

As soon as you settle on a product that you want to sell, it is absolutely essential that you check that there are no restrictions or any other obstacles that may result in you being unable to sell the hundreds of units that you’re about to order.

This stage is something that I see Amazon FBA beginners skipping time and time again, and it’s a mistake that could cost you thousands if you later find out that you’re not allowed to sell your product on Amazon. So, the lesson here is – as soon as decide upon a product that you want to sell, before you order it with your supplier, you need to check that it’s not restricted or gated product on Amazon. And you can do that by either searching for the same of product in the catalogue menu and checking if there are restrictions, or by adding your version of the product to Amazon’s catalogue, waiting a few days, and then checking your account to see if there have been any  notifications about the product being removed.

In addition to that, you’ll also need to verify that the product that you want to sell isn’t protected by the inventor of the product, i.e. it has a patent on it. To check this, you can’t just ask your supplier and take their word for it, because the odds are that they don’t know themselves and they’ll just tell you what you want to hear. The best way to get an idea of whether a product is patent protected or not, is to search for it in Google Patents or hire an expert on Fiverr.

Generally speaking, if there’s more than one seller of your product on Amazon already, that indicates that it isn’t patent protected, but you should always do your diligence to verify this anyway. I’ve seen countless stories of people ordering hundreds of units of a product, only to later discover that it was patent protected, meaning they couldn’t recover a single penny of their investment back – so don’t skip this stage.

Amazon FBA Mistake 3: Not Changing Your Inventory Settings

Once you’ve decided on your Amazon FBA product and you’ve ordered it from a supplier, you can start to get excited because you’ll soon be selling. But before you crack open a beer in celebration, there’s one essential change to your account that you need to make, and if you don’t, you could find that Amazon destroys all of your inventory and there’s not a single thing you can do about it.

In order to reduce wasted space in their warehouses, Amazon quietly introduced a setting that either results in your stock being automatically removed or destroyed if it doesn’t sell after a certain amount of time. And in some cases that I’ve seen, the settings that were automatically applied resulted in unsold stock being destroyed after 45 days.

Whilst this setting isn’t the default for most people, it has happened to some accounts, so regardless of whether you’re currently selling or about to me, my advice is to check your automated fulfillment settings by logging in to your account, choosing fulfilment by amazon in the settings menu, and then amending your automated fulfillable settings to something more sensible.


Hopefully these mistakes aren’t ones that you’ve already made, so make sure that you write them down and remember them, so that you can avoid the risk of losing thousands. If you’ve made any mistakes of your own that you’d like others to learn from, let me know in the comments!

If you want to learn more about how you create your own Amazon FBA business, then check out my free training where I run through my exact 5 step strategy that I’ve repeatedly followed to continue launching successful products.

Or, if you’re ready to begin your journey and want to start with the best chances of success, check out the Smashers Academy.

P.s. if you want to learn more about my journey (highs and lows), check out my post on my progress here.

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