Why I Stopped Selling on Amazon: Should You Quit Amazon?

With around 9 million sellers on Amazon, 2 million of which are active, selling through Amazon is (to put it lightly) a challenge. It’s not surprising that many people that started selling on Amazon have quit due to many good reasons. Frankly, navigating the Amazon marketplace, and being successful at it, is tough stuff, so many third party sellers and small businesses have thrown in the towel. Why I stopped selling on Amazon – this week, let’s take a look at the top reasons why people have made the decision to stop selling, and whether you have what it takes to be successful on Amazon.

Keep in mind, even the most experienced Amazon seller understands how competitive – and difficult – Amazon has become. To many people, Amazon is no longer the key to billionaire status, and there’s absolutely no shame there. Though we’ll be providing some of the common reasons why sellers quit, our goal isn’t to encourage you to stop selling; it’s to provide you with the top reasons why people have stopped selling on Amazon, so you can make informed decisions on your own…

And hopefully avoid some of the big mistakes that keep people from being successful on the platform.

Recommended reading: How to Launch and Rank a Product on Amazon in 2024

Section 1: Stop Selling on Amazon Due to Market Saturation and High Competition

There’s no doubt about it – with more than 9 million third-party sellers offering more than 600 million physical products on Amazon, the competition is fierce. There are so many similar products to yours, that differentiating a unique product is incredibly difficult. Add the complexity of Amazon basics and how Amazon is teaching Chinese sellers to bypass middlemen and sell directly (more on this on our Temu vs. Shein blog) – sellers that have superior cost advantages due to their manufacturing capabilities. The result is a highly competitive environment, where third party sellers on Amazon have a very difficult time maintaining visibility and profitability.

So, what’s the solution here? A lot of successful products have found that middle ground between market demand and product differentiation. Some sellers choose a product with no competition whatsoever – which isn’t a good idea, because that means that customers aren’t looking for these products. Other sellers make the mistake of entering a saturated category, thinking the numbers justify their investment, only to be disappointed because differentiation is virtually impossible. The best product is something in the middle – customer awareness and demand, with enough sales potential to justify investment. Product research is key. Market research is crucial. (Read this blog on Where to Get Products to Sell on Amazon to give you more tips.)

Other sellers employ creative marketing efforts to drive sales. First, they optimize their listings for organic search, then employ Amazon PPC to boost their Amazon sales. They might engage in omnichannel marketing to drive external traffic to their Amazon listing, increasing their rank on the platform.

The best solution is a combination of both: a differentiated product with creative marketing efforts. Frankly, the answer to why I stopped selling on Amazon could be entry into an over-saturated category, where it’s virtually impossible to get seen by your target audience.

There’s also the possibility that your product faces less competition in foreign markets. Many sellers head to the US marketplace to sell because it’s the largest, but this isn’t a one-size-fits-all rule. Many new sellers have failed in the US, only to excel in Germany, the UK, or even the UAE and Japan.

Bottom line? Research and feasibility are important components of launching any business, even an online business.

Section 2: Top Reasons Amazon Sellers Quit: Amazon’s Control and Policy Changes

Amazon’s terms of service change as often as your teenage daughter changes her outfits. Your sales on Amazon are badly affected by the unpredictable policy shifts, which create uncertainty and disrupt business operations. Why I stopped selling on Amazon – constantly adapting to new changes can be stressful and time-consuming, impacting seller performance, overall business efficiency, and profitability.

Frankly, the only way to run a successful business on Amazon is staying on top of these unpredictable policy changes. It’s good practice to subscribe to Amazon seller forums and newsletters, and attend conferences regularly. Experts and fellow sellers can provide timely updates and insights into policy changes and best practices. That way, you can adjust your strategies and ensure compliance.

Additionally, diversifying sales channels is a good way to keep your new business afloat. Diversify to other Amazon marketplaces through global expansion, and consider selling on eBay, Shopify, social media, and so forth. It should be easier for you to create a more stable and resilient business model this way. Expansion helps you achieve diversification, which in turns helps to spread risk and ensure that sudden policy changes don’t severely impact the performance of the business as a whole.

Why I stopped selling on Amazon – because Amazon’s policy shifts disrupted the stability of my business. No doubt about it, there’s no way to control Amazon, so the best thing you can do is ensure that your business minimizes risk through diversification and expansion, and by staying on top of changes.

Section 3: Why I Quit Amazon: Financial Strains and High Fees

Why I stopped selling on Amazon – many sellers didn’t make money, no matter how healthy their profit margins were, because of the fees associated with Amazon selling. We’re talking about things like referral fees, FBA fees, and storage fees. Referral fees are a percentage of each sale that Amazon charges, while FBA fees cover the storage, packing, and shipping of products. Storage fees, particularly for long-term storage, can add up quickly if inventory is not managed efficiently. Together, these fees can erode profits and make it challenging to compete, especially in a highly saturated market.

What’s a seller to do? There has to be a balance between providing competitive pricing to appeal to your customer base, while still maneuvering around Amazon fees, so you don’t wind up losing money while trying your hardest to sell online. It’s definitely a tightrope.

One useful tool is Amazon’s revenue calculator, which helps every seller plan pricing strategies by providing a detailed breakdown of all associated costs. By using this calculator, sellers can better understand their expenses and set prices that ensure profitability – while keeping prices at an even level to appeal to customers.

Furthermore, it’s important to keep listings optimized to increase the possibility of organic sales without relying heavily on PPC. Many brands selling on Amazon don’t give much thought to their SEO, images, and customer reviews, and this will hurt the brand in the long run. Selling great products is just one part of the puzzle of a successful Amazon business. Considering Amazon takes a percentage of everything you earn, you might as well invest time and resources into earning the best sales you can – through marketing and optimization.

Section 4: People Quit Amazon FBA Due To Long Payout Schedules and Cash Flow Issues

Amazon will take a referral fee – and on top of that, payout schedules affect cash flow issues.

Payments are typically disbursed to bank accounts on the next scheduled settlement date, typically taking 3-5 days to arrive after being sent, but there are other factors that can affect this schedule:

• 7-Day Holding Period: Payments are held until orders have been delivered for at least seven days, allowing time for buyers to inspect their orders or initiate returns.
• Deductions: Payments are adjusted for any returns, chargebacks, or A-to-Z guarantee claims, with the costs deducted from your account balance.
• Amazon Fees: Various fees, including referral fees, FBA fees, and shipping fees, are subtracted from your payments before they are disbursed.

Put it this way. Amazon is supposed to pay sellers every 2 weeks. But Amazon can hold your money for any number of reasons. In fact, the platform can even hold part of your money as part of the “account level reserve.” Check out this great blog from SellerApp on this issue. Bottom line, sometimes you don’t get paid for 3 weeks.

Why I stopped selling on Amazon – the lack of predictability on the release of funds puts a dent on cash flow. When you’re planning to take those profits and reinvest them into your FBA business, such as funneling the money to the development or shipment of more products, the lack of cash flow can severely impact operations. Imagine not being able to pay suppliers on time, or having your shipments held at the port because you can’t pay for shipping, all because Amazon hasn’t released your cash yet.

What to do?

Amazon recommends Express Payout for sellers who are already using Amazon Pay. Allegedly, this new feature eliminates the usual 5-day wait for payments. You can access the feature through Seller Central. Perhaps it’s worth a shot, to see if it alleviates some of the cash flow concerns.

Section 5: Why I Stopped Selling on Amazon: Customer Service and Returns

Why I stopped selling on Amazon – negative reviews and returns. This issue is common for many Amazon sellers; in fact, the majority of sellers don’t pay attention to customer service, which means the relationship between sellers and customers can get strained. It will be very difficult to sell your products on Amazon for the long haul if you don’t pay attention to your customers.

Here’s how this goes. Sellers sell a product that’s well optimized, well developed, and well marketed. Customers are convinced by well-written product descriptions, and add to cart accordingly. They like your product.

Then, once they receive the product, their expectations are shot. Either the product doesn’t work like it’s supposed to, or the item doesn’t fit, or it’s a different color altogether. They write negative Amazon reviews, which brings down your performance, and affects your ranking. Soon, you’ll find that your products aren’t selling at all.

Customer service gets more complex when you’re selling on a global scale, especially in countries where you don’t speak the language. Developing multilingual teams to address customer concerns can be costly, so what should sellers do when they want to sell their products on a global scale, while still providing the customer service that identifies good business models from ones doomed to fail?

Here’s a step-by-step process for addressing customer inquiries and complaints on Amazon:

Step 1: Set Up Amazon’s Buyer-Seller Messaging Service

1. Activate Messaging Service: Go to Seller Central and ensure the Buyer-Seller Messaging Service is activated.
2. Customize Templates: Customize the pre-made message templates provided by Amazon to fit your brand’s tone and frequently asked questions.
3. Response Time: Aim to respond to customer inquiries within 24 hours to maintain good seller performance metrics.

Step 2: Develop a Comprehensive FAQ Section

1. Identify Common Questions: Review past customer inquiries to identify common questions and concerns.
2. Create FAQ Content: Write clear and concise answers to these common questions.
3. Update Regularly: Keep the FAQ section updated with new information and any changes to policies or products.

Step 3: Implement a ChatBot for Instant Customer Support

1. Choose a ChatBot Platform: Select a ChatBot service that integrates well with Amazon’s platform.
2. Program Common Queries: Program the ChatBot to handle common customer queries, such as order status, return policies, and product information.
3. Human Escalation: Ensure the ChatBot can escalate complex issues to a human representative.

Step 4: Translate ChatBot for International Markets

1. Select a Translation Service: Use professional translation services like YLT Translations to translate ChatBot responses into the languages of your target markets.
2. Localize Responses: Beyond translation, localize responses to consider cultural differences and local regulations.
3. Test Translations: Test the translated ChatBot responses with native speakers to ensure accuracy and cultural appropriateness.

Step 5: Manage Returns and Refunds Efficiently

1. Create a Clear Return Policy: Clearly state your return and refund policies on your Amazon store page.
2. Automate Return Approvals: Use Amazon’s Return Manager to automate return approvals and streamline the process.
3. Monitor Return Reasons: Regularly review the reasons for returns to identify and address any recurring issues with your products.

Step 6: Handle Negative Reviews and Feedback

1. Monitor Reviews: Regularly monitor product reviews and feedback on your Amazon store.
2. Respond Promptly: Address negative reviews promptly and professionally, offering solutions or refunds where appropriate.
3. Improve Based on Feedback: Use the feedback to make necessary improvements to your products or services.

Step 7: Train Your Customer Service Team

1. Product Knowledge: Ensure your customer service team has in-depth knowledge of your products.
2. Cultural Sensitivity: Train the team in cultural sensitivity, especially if you are selling internationally.
3. Customer Service Skills: Provide training in customer service best practices, including patience, empathy, and effective communication.

You might want to hire a multilingual Amazon virtual assistant to handle this.

Step 8: Monitor Performance Metrics

1. Use Amazon’s Tools: Utilize Amazon’s performance metrics tools to monitor response times, customer satisfaction, and other key indicators.
2. Regular Reviews: Conduct regular reviews of your customer service performance and identify areas for improvement.
3. Adjust Strategies: Adjust your customer service strategies based on performance data to continuously improve the customer experience.

Step 9: Utilize Customer Feedback for Improvement

1. Gather Feedback: Actively seek customer feedback through surveys and follow-up emails.
2. Analyze Feedback: Analyze the feedback to identify trends and areas that need improvement.
3. Implement Changes: Implement changes based on the feedback to enhance your products and customer service.

From an optimization standpoint, it’s crucial to provide as much information as possible. When customers buy on Amazon, they need to be spoken to, educated, with as much product information as you can give – even for a simple product that seems intuitive to use. If a customer can’t figure your product out, you can expect them to leave a negative review.

Label products accurately. Provide product inserts with accurately translated instructions for use. Use your social media accounts to provide videos and infographics on how to install, use, or maximize the product. Even if the customer base figures out how to use the product on their own without any trouble, it never hurts to over-communicate.

Section 6: How YLT Translations Can Help Alleviate the Dangers of Selling on Amazon

Frankly, many sellers fail because they give up. Sure, it’s not easy selling on Amazon at all; there are so many balls that sellers have to juggle at the same time, whether they’re selling private label items, pursuing drop shipping, retail arbitrage or wholesale. It’s the same banana every time; selling on Amazon isn’t for the weak at heart.

It takes a whole lot of determination and will to succeed, and many sellers have given up for incredibly valid reasons. Not every product, no matter how beautifully made or perfectly sourced, will succeed, and there are a dozen reasons why a seller might fail.

In fact, many people who’ve stopped selling on Amazon haven’t even failed, per se; they just took a good look at their businesses and decided that Amazon just wasn’t it for them. And that’s fine.

But we honestly think that if you don’t even try to succeed, then failure is imminent. As Michael Jordan said, “I can accept failure, everyone fails at something. But I can’t accept not trying.”

One way to mitigate these risks is to expand your business globally. Naturally, international expansion isn’t for everyone, so it’s crucial to do your due diligence before thinking about expanding your business. But it’s quite possible that you stopped selling on Amazon because you weren’t selling in the right market.

That’s where YLT Translations can help. Through the Amazon Product Opportunity Report, and targeted localization performed by native speakers, you can identify the markets that would be interested in your product, and market your product listings accurately to the right market.

Check out our list of services to find out how we can be of assistance, and reach out to us for a free listing audit; maybe we can help you alleviate some of the challenges you’ve faced so you can stop asking yourself, why I stopped selling on Amazon, and ask yourself instead, should I sell on Amazon again?

Conclusion: Why I Stopped Selling on Amazon – Should You Quit, Too?

So, we’ve answered the question of many sellers: why I stopped selling on Amazon. Many of these reasons are common in e-Commerce businesses; the fact is, selling online isn’t for the weak of heart. Just remember, Amazon doesn’t function if not for its sellers; what is Amazon without people like you, trying to bring the right products to Amazon customers?

So, take heart. If you’re one of the sellers that’s seriously considering shutting down their Amazon business, we have one piece of advice to give…

Try everything first.

The right product, the right keyword research, the right shipping conditions, the right marketplace, and the right approach to Amazon’s rules and regulations, may very well spell success for you.

And think about expanding to other countries. Just because Amazon USA is the largest marketplace doesn’t mean it’s the best one for you.

Follow experts like Jana on social media; they drop tips and tricks to help you do better on Amazon. Reach out if there’s anything we can do to help.

Share with us your stories by commenting below or engaging with us on social media – have you ever thought about quitting? We’d love to hear about your experiences!