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5 Avoidable Mistakes Hurting Your Gross Profit Margin on Amazon [Guide]

By Catie Grasso August 7, 2018
5 Avoidable Mistakes Hurting Your Gross Profit Margin on Amazon [Guide]
Catie Grasso
About the Author

Catie Grasso is a marketing content writer for Feedvisor. She enjoys running, trying new restaurants, and exploring New York City.

In order to have a comprehensive handle on your assortment — both at a granular and big-picture level — you need to understand the high-impact variables that affect your profitability on Amazon. Today, one of the most commonly overlooked metrics by sellers, brands, and retailers alike is profitability and, in an ever-changing marketplace landscape, it is critical to understand how various facets of your business impact that core metric.

Given that no two Amazon businesses are alike, you should implement customized approaches to establishing operational efficiency, project priority, and a business model specific to both your short-term sales targets and long-term goals. In order to completely optimize your catalog, which will in turn naturally streamline other aspects of your business, you need to know how to keep your gross profit margins intact despite changes to your individual business or policy and fee updates across the Amazon marketplace.

Whether you are expanding into a new geographical market, adding a new product category or set of ASINs to your catalog, or solely focusing on fine-tuning your go-to-market strategy during a specific time of year, adopting a strategy to monitor, maintain, and measure your gross profit margins on Amazon will become business critical if it has not already. In order to grasp a true, 360-degree view into your profitability on Amazon, there are definite traps that you should avoid to prevent your business from moving backward and running out of capital, compromising your profit margins, or completely disregarding one facet of your business without even realizing it.

In our latest guide, “5 Business Mistakes Hurting Your Gross Profit Margin on Amazon,” we provide an in-depth focus on five business mistakes that can significantly risk and reduce your gross profit margins on Amazon if you either aren’t aware of them or aren’t managing them properly. It is possible for these errors, such as overlooking shipping fees, letting returns impact profitability, and not optimizing your pricing strategy, to be avoided in entirety while maintaining healthy profit margins.

Using the expert strategies provided in the guide, you will be able to negotiate stronger terms with logistics partners and suppliers, customize your pricing strategy based on variables such as seasonality and demand, and capitalize on your high-volume movers to secure a steady inventory position that is long-lasting. When you proactively gain control of these high-impact variables such as by implementing an inventory management system to combat inventory storage fees and regularly track sales conversions, you will be able to maximize positive results by knowing the performance of each item in your catalog without sacrificing profit margins.

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