Common FBA (Fulfillment by Amazon) Mistakes and Best Practices

Using FBA (Fulfillment by Amazon) brings many advantages, but new sellers often make avoidable mistakes that cost time and money. This article highlights common missteps and offers friendly, practical best practices to help beginners run FBA effectively and sustainably.

Common mistakes

• Underestimating total costs — Sellers sometimes look only at product cost and sale price, forgetting fulfillment fees, monthly storage, long-term storage, inbound shipping, and possible prep or labeling charges. Result: razor-thin margins or losses despite good sales.
• Poor inventory forecasting — Running out of stock loses buy box eligibility and ranking, while overstocking invites long-term storage fees. Both harm profitability.
• Ignoring Amazon prep requirements — Incorrect labeling or missing prep (e.g., poly-bagging or bubble wrap for certain items) can cause receiving delays, unexpected prep fees, or rejection of shipments.
• Relying on a single product or supplier — Heavy dependence on one SKU or one supplier creates risk from demand shifts, supply chain disruptions, or quality issues.
• Weak product listings — Low-quality images, poor titles, and missing keywords reduce discoverability and conversion, making ads expensive and acquisition inefficient.
• Neglecting performance metrics — Not monitoring order defect rate, late shipment rate (for non-FBA channels), and customer feedback can lead to account issues or suppressed listings.
• Overusing removals instead of optimization — Frequently removing inventory to avoid fees without adjusting pricing, promotions, or bundles can drain capital and lead to repeated losses.

Best practices

• Calculate all costs up front — Use Amazon’s FBA fee calculator and include inbound freight, prep, and potential return costs. Build a margin buffer for promotions or advertising.
• Test with small runs — Validate demand with limited inventory before larger purchases. A small test shipment reduces risk and gives real-world performance data.
• Follow Amazon’s packaging and labeling rules strictly — Review Seller Central’s prep guides for your category. Consider paying Amazon to label items if volume justifies the cost and you want to avoid labeling mistakes.
• Monitor and optimize listings — Use keyword research to refine titles and bullets, invest in high-quality photos, and keep product descriptions accurate to reduce returns and negative reviews.
• Plan inventory using lead times and forecasts — Maintain safety stock based on supplier lead times and sales velocity. Use simple spreadsheets or inventory software to generate reorder alerts.
• Diversify SKUs and suppliers — Reduce risk by offering multiple related products and having alternative suppliers to mitigate disruptions.
• Leverage Amazon tools thoughtfully — Sponsored Ads can accelerate visibility, but track ACOS (Advertising Cost of Sales) and profitability. Use automated repricers to stay competitive while protecting margins.
• Manage slow-moving inventory proactively — If a SKU slows, consider promotions, bundling, or removal for liquidation rather than waiting for long-term storage fees to mount.
• Keep excellent customer service — Even though Amazon handles most customer interactions, monitor messages and feedback. Promptly address claims, and maintain compliant return policies.

Practical examples and tactics

• If you find a SKU approaching long-term storage thresholds, run a time-limited coupon or lightning deal to accelerate sales rather than paying removal fees.
• Use an initial small order (e.g., 100 units) to test product-market fit. If it sells well, increase reorder size and negotiate better pricing with the supplier.
• For fragile items, add a short SOP for packing that includes double-boxing or foam inserts. This reduces damage rates and costly reimbursements.

Tools and services that help

• Fee calculators to estimate margin after all Amazon fees.
• Inventory management software for reorder alerts, forecasting, and multi-channel syncing.
• Labeling and prep services either through Amazon or 3PLs if you want to offload physical prep steps.
• Advertising analytics tools to track campaign performance and profitability.

Final guidance for beginners

• Start deliberately: small tests, close tracking, and steady learning beats rushing into large inventory buys.
• Focus on unit economics: ensure each SKU remains profitable after fees and marketing.
• Document your processes: create simple SOPs for labeling, packing, and shipment creation to reduce human errors.
• Be proactive: monitor inventory and performance metrics weekly so small issues don’t become large problems.

With attention to fee structures, disciplined inventory management, and adherence to Amazon’s operational requirements, FBA can be a powerful growth engine. Avoid the common rookie mistakes above and follow the best practices to build a resilient, scalable presence on Amazon.