No CommentsWe often talk about sellers’ success stories and see many new entrepreneurs giving selling on Amazon a shot. Still, we think it is important to see the other side of ecommerce – and that is those that didn’t succeed or stopped selling.
In the Jungle Scout State of the Seller Report, we surveyed over 2,000 sellers to gather important insights into how sellers think and run their businesses. We also asked, “Why did you stop selling online?”
In this article, we’ll explore the top reasons why sellers may have stopped selling on Amazon, solutions to their problems, and how new or established Amazon sellers can avoid the same problems.
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- “I did not have the necessary tools (including data) to help me be successful”
- “Too complicated/I got confused or overwhelmed with the process”
- “My ecommerce business was not successful”
- “I did not have enough time to commit to my business”
- “I could not afford / did not want to continue to pay for my business expenses”
Top reasons Amazon Sellers quit
Selling on Amazon isn’t all rainbows, butterflies, and easy conversions; sometimes, the obstacles are too great to overcome.
When starting a business, it’s important to know what’s at stake – an accurate prediction of how much money, time, and effort you’ll need to succeed will help you sidestep the common issues that lead sellers to quit.
Fortunately, Jungle Scout has tons of tools and resources to keep typical disruptions at bay, and our team of expert sellers stays on top of Amazon developments and other seller news to make sure we cover new concerns, too.
Here are a few reasons why people stopped selling.
1. “I did not have the necessary tools (including data) to help me be successful”
Makes sense. While not impossible, trying to find profitable, in-demand products to sell on Amazon without the help of research tools data will be difficult. Proper data helps sellers make informed decisions about the markets they want to sell in.
Without data such as sales volume, revenue, keyword search volume, and competition, choosing a product to sell will be even riskier.
According to active Amazon sellers, having the necessary tools and information to help is a top factor that leads to success in selling on Amazon.
Solution: The best Amazon seller tool
What’s the solution to this problem? Use an all-in-one platform, such as Jungle Scout, for any entrepreneur starting and scaling an Amazon business.
Jungle Scout has every tool you’ll need as a new or experienced Amazon seller to start, run, and scale your business —from product research, keyword research, supplier research, inventory management, AI listing builder, reviews, to much more.
To learn more about Jungle Scout and all of our tools, click the link below.
2. “Too complicated/I got confused or overwhelmed with the process”
20% of respondents who stopped selling on Amazon chose this as the reason. I totally understand this. It takes a lot of time and effort to learn the entire process of selling on Amazon – but if you have the right resources and the willingness to learn, it will be worth it.
That is the key, having the proper resources and information to ensure you are doing the right thing when it comes to product research, sourcing, optimizing listings, advertising, and so on.
The three most confusing aspects sellers faced were PPC, finding a supplier, and getting started.
Solution: Amazon seller guides.
One of the things that we pride ourselves on at Jungle Scout is the amount of free education we provide sellers, whether that’s through our blog, YouTube channel, or various webinars.
No matter if you are launching a new private label product, reselling items through arbitrage or wholesale, or even drop ship, we have in-depth content on each topic, along with everything in between.
If you want to learn step by step about how to sell on Amazon, check out these free resources below.
We go over everything from product research, keyword research, listing optimization, how to find suppliers, how to ship your product to Amazon, and how to advertise your product.
How to Sell on Amazon FBA for Beginners – 2023 Guide
Also, make sure to subscribe to our blog and YouTube channel so you are fully up to date with all things ecommerce and selling on Amazon.
3. “My ecommerce business was not successful”
This answer is a little broad, so we asked those who chose this why their business was unsuccessful.
Here are the reasons why:
- “My business was not profitable”
- “My product(s) were not selling”
- “I could not innovate/differentiate my product enough from competitors”
These are three understandable reasons why someone would stop selling online. Let’s start with the first reason:
“My business was not profitable”
When selling on Amazon or online in general, you need to understand all of the fees involved. If you don’t have a solid understanding of the fees charged as well as things like your product and shipping costs, it’ll be very difficult to run a profitable business.
READ MORE | Amazon FBA Fees: How They Work and How to Profit as a Seller
Yes, there are a lot of fees involved with selling on Amazon. Referral fees, FBA fees, subscription fees, shipping fees, refund fees, etc.
When deciding what to sell on Amazon, first ensure you understand the fees involved, then focus on your product costs when working with a supplier, and then determine your selling price.
Amazon also has a great revenue calculator to show you whether or not your product is profitable at whatever price point you set.
“My products were not selling”
If your products were not selling, it could mean a few things. You chose an overly competitive product, you did not market or advertise your product well enough, you had poor product images, priced too high, poor or little reviews, you get the idea.
That’s ok! I think nearly every Amazon seller has launched a product that did not do as well as they thought it would. But you use this as a learning tool to figure out what not to do with the next product.
READ MORE | Product Research 2023 Guide: How to Find Profitable Products
“I could not innovate/differentiate my product enough from competitors”
Another reason your products were not selling is that the product you launched did not have much or any differentiation from your competitors with sales history and reviews.
Differentiating your product is important in today’s world of ecommerce because it will be very hard to stand out from competitors that were there long before you.
When choosing a product to sell, figure out what you could improve on or change about a competitor’s product. Read the negative reviews and see if you can offer a solution to customers’ problems.
In other words, find your unique selling proposition.
Solution: Amazon business models
Another solution to this could be trying a different business model. Most Amazon sellers start off with private label, which is usually more capital intensive and more difficult to get sales as it is a brand new product.
READ MORE | Amazon Business Models
If you start with a model such as retail arbitrage or wholesale, you will resell other brands’ products with a sales history and can start with much less money.
12% of those doing arbitrage were able to launch Amazon businesses for less than $500, and about 32% did so for less than $1,000. Compared to 80% of private label sellers spent $1,000 or more to launch.
4. “I did not have enough time to commit to my business”
Everyone’s situation is different, and not all sellers have time to grow an FBA business alongside their other responsibilities. But for those struggling to find a balance, it may help to understand the average seller’s time commitment, startup costs, and time-to-profit, as well as utilizing some strategies for working smarter —not harder.
Time-strapped sellers, take heart: You don’t have to make FBA your full-time job to be successful. Many profitable sellers don’t even devote part-time hours to it.
In fact, only 12% of sellers spend 40 hours or more tending their businesses. Most sellers (64%) spend fewer than 20 hours per week working on their Amazon businesses, while working a full- or part-time job.
A solid 16% spend fewer than four hours per week on their Amazon work. This flexibility is what makes selling on Amazon a great outlet for people looking to switch careers or make money while running a household.
Though keep in mind that it does take a lot of work up front to get to the point of working fewer hours on your business.
5. “I could not afford / did not want to continue to pay for my business expenses”
Like any new business, starting out on Amazon requires an up-front investment of time and money, but this varies.
65% of sellers spend less than $5,000 in startup costs, which includes the cost of inventory, fees, and promotion. Over a quarter (29%) spend $1,000 or less.
No matter how many hours or dollars you devote to launching your business, you should expect some time to pass before you turn a profit.
|
Time to Profit |
Percent of Sellers |
|
Fewer than 3 months |
15% |
|
3-6 months |
25% |
|
6 months-1 year |
28% |
| 1-2 years |
14% |
| More 2 years |
4% |
| I don’t know |
3% |
| I’m not profitable |
12% |
While 40% of sellers see profits within six months of starting their business, it’s likely to take up to a year or two to begin making a return on your initial investment.
So don’t worry if you’re not raking in revenue a few months into selling – that’s normal!
Since some sellers stopped because of money, we asked a follow up question: “What sort of financial challenges did you experience?”
“I did not have enough money to buy new inventory”
68% of sellers who stopped because of money stated they stopped because they didn’t have enough money to buy new inventory. Now this could be because of a few things.
They either invested in a product that did not sell as expected, the product ended up being unprofitable after all expenses, poor inventory management skills, or didn’t use the profits to reinvest into the business.
If your product was not profitable or did not sell as well as you expected, that’s ok. It happens to most Amazon sellers at some point. Use it as a learning experience for the next product you launch.
“PPC was too costly”
Another money issue sellers ran into was PPC being too costly. This is a legitimate concern as rising advertising costs eat into sellers profits. Amazon PPC can be difficult to get a handle on if you do not have experience – it is easy to overspend or to bid on poor performing keywords.
Of course, there is usually more to it than that. You must also be sure that your listing is the best it can be. Optimized with the proper keywords, stellar product images and video, competitive price, A+ Content, good reviews, and so on.
If you send traffic to a bad listing, it will not convert as you expect. Fix the issues with your listing before paying for advertising.
If you have a good Amazon listing but your ads are still not performing well, check out our guide on Amazon Advertising and on the Jungle Scout YouTube channel for tips and running profitable ads.
What would make sellers interested in selling online again?
We went over the top reasons why sellers stopped, but let’s explore what would make sellers interested in selling online again. If sellers can overcome some of the common pitfalls, they’ll likely be successful the next go around.
The top five answers were:
- More training and education about how to succeed in ecommerce. As mentioned above, Jungle Scout has tons of free education on how to get started selling on Amazon. We also have tons of content to help grow your business.
Jungle Scout users will also have access to the Academy, which is a comprehensive and actionable training program for selling on Amazon, built right into your Jungle Scout account.
- More accurate data to help me find product opportunities. Did you know that Jungle Scout has the most accurate Amazon sales data out of any other selling tool? Our powerful product research tools will help you find high-demand, low-competition products to launch on Amazon.
- More money to spend on my ecommerce business. Not having enough money to start is definitely a common issue but you can actually get started selling on Amazon with $500 or less.
Doing retail arbitrage or reselling used books allows you to start small and build up capital to eventually invest in a private label product, or into more inventory to resell on Amazon.
- Lower seller fees. Unfortunately, fees are just a part of selling on Amazon, or any other online marketplace. The key is to fully understand what you’re getting into to be sure you are profitable.
Want to learn some ways to reduce your Amazon selling fees? Check out this guide: How to Reduce Amazon FBA Fees: 13 Tips for 2023
- Having an expert review my product choice. Working with an expert 1-on-1 is a great way to jumpstart your Amazon business into profitable growth. If you have some more money to invest, look for a reputable online coach that you trust to start working with you.
If you don’t want to hire a coach or pay for an expensive course, Jungle Scout also has a great Facebook group called Amazon FBA Competitive Edge. This group is filled with beginners and experts who are willing to help answer any questions you may have getting started.
Why did you stop selling on Amazon?
There are many reasons why sellers stop selling on Amazon but this is what we found were the most common reasons. We hope this article will help you understand these reasons and how to overcome them.
Why did you stop selling on Amazon? And would you start selling again? Let us know in the comments below.
