The 11 biggest Amazon seller challenges & how to solve them

Starting an Amazon business looks deceptively simple from the outside. Find a product, create a listing, watch the sales roll in. But reality hits hard once you’re knee-deep in FBA fees, inventory planning, and policy violations you never saw coming.

The truth is that Amazon selling comes with a steep learning curve packed with challenges that can make or break your business. New sellers often stumble through these obstacles without a roadmap, burning through cash and motivation before they figure out what went wrong.

This guide walks you through the 11 most common challenges that trip up new and even some experienced Amazon sellers. More importantly, you’ll get specific, actionable solutions for each one.

1. Poor product research and selection

Most new sellers dive headfirst into overcrowded markets without understanding what they’re up against. You see a product doing well and think, “I can sell that too,” only to discover 500 other sellers had the same brilliant idea.

The problem runs deeper than just competition. Sellers frequently pick products with low keyword demand, generic items that anyone can replicate, or products in niches they don’t understand. These choices doom businesses before the first sale.

Your product selection determines everything else—margins, competition level, marketing costs, and long-term viability. Get this wrong, and every other challenge on this list becomes ten times harder.

The solution:

Use tools like ScoutX to analyze any Amazon product’s ROI, sales rank, and fees instantly. The Chrome extension shows you competition levels, variation data, and real-time market intelligence right on the product page.

Other sourcing methods need different tools:

• Tactical Arbitrage for online arbitrage across 1,500+ websites
• ScoutIQ for book flipping with proprietary eScore™ data
• Scoutify for retail arbitrage with instant profit calculations

The key is understanding true customer needs and finding products that solve real problems. Look for long-tail niches with decent search volume but manageable competition.

2. Inventory management nightmares

Nothing kills momentum like running out of stock just as your product gains traction. Your sales rank plummets, your organic visibility disappears, and competitors swoop in to capture your customers.

On the flip side, overstocking ties up cash in slow-moving inventory while Amazon hits you with storage fees. Aged inventory penalties add insult to injury, making mistakes expensive lessons.

Amazon’s Inventory Performance Index (IPI) adds another layer of complexity. Fall below their requirements, and you face restock limits or lose Prime eligibility—death sentences for most Amazon businesses.

Then there’s the maze of packaging and labeling rules. One wrong label format or missing prep requirement sends your shipment back, costing you time and money while your competitors keep selling.

The solution:

InventoryLab streamlines the entire process from product setup to Amazon shipment creation. Smart boxing features eliminate manual work, while real-time fee tracking shows your true costs at every stage.

The zero-error workflow prevents costly mistakes by remembering each team member’s decisions and validating every label to Amazon’s exact specifications. Perfect documentation ensures your shipments reach Amazon warehouses without delays.

Track demand patterns, seasonal trends, and lead times to maintain optimal stock levels. Set up automated reorder points based on sales velocity rather than guessing when to restock.

3. Pricing wars and competitive pressure

Price wars are brutal, especially in saturated markets like electronics or clothing. Aggressive discounting becomes an arms race where everyone loses—margins evaporate and brand value tanks along with profits.

Amazon itself often enters as a competitor through Amazon Basics, making sustainable pricing even trickier. When the platform owner decides to compete in your space, traditional pricing strategies fall apart.

Many sellers default to the “lowest price wins” mentality, forgetting that Amazon customers often prioritize other factors like shipping speed, reviews, and product quality.

The solution:

SmartRepricer automates pricing across 22 Amazon marketplaces while protecting your bottom line. Real-time market intelligence tracks competitor moves and adjusts your prices strategically, not reactively.

Create custom pricing rules for different product groups. Set time-based strategies for promotional periods. Use cost-synced strategies that automatically factor in your true expenses to maintain target ROI levels.

Value-based pricing beats racing to the bottom. Bundle complementary products, create limited-time promotions, and differentiate on quality rather than price alone. Your goal is profitable sales, not just volume.

4. High Amazon fees eating into profits

Amazon’s fee structure catches new sellers off guard every time. Referral fees range from 8% to 45% depending on category, but that’s just the beginning.

FBA fees include fulfillment costs ($2-$6.80), storage fees ($0.75-$2.40 per cubic foot), aged inventory penalties, label services, and refund processing fees (20% or $5 minimum). These add up fast.

Storage fees surge during Q4, exactly when you need inventory most. Long-term storage penalties kick in after 365 days, turning stagnant inventory into expensive liabilities.

Most sellers fail to calculate the true cost of goods sold (COGS). They forget to include Amazon deductions, import tariffs, PPC spend, and other hidden costs that eat away at margins.

The solution:

FeedbackWhiz Profits provides complete financial visibility across Amazon and Walmart marketplaces. Track every cost, fee, and revenue stream in one unified dashboard that updates in real-time.

Custom expense tracking lets you build categories that match your business reality—marketing spend, product photography, sampling costs. See your true profitability by product, marketplace, and time period.

Calculate fees before you list products, not after you discover them on your settlement report. Factor in seasonal storage increases, return processing costs, and other variables that impact your bottom line.

5. PPC ad spend waste

Amazon PPC burns through budgets faster than almost any other advertising platform. Broad-match keywords pull in irrelevant clicks that never convert. Poor campaign structure spreads budgets too thin across too many keywords.

New sellers often misunderstand ACoS (Advertising Cost of Sales) and TACoS (Total Advertising Cost of Sales), leading to campaigns that look successful but actually lose money. Campaign segmentation mistakes compound the problem.

Starting with Sponsored Products makes the most sense for new sellers. Get your organic ranking foundation solid before expanding to other ad types.

The solution:

Start small and scale systematically. Begin with 10-15 highly relevant keywords per campaign. Test Auto Campaigns to discover new keyword opportunities from actual customer searches.

Use search query reports to find negative keywords and eliminate waste. Regularly audit campaigns for underperforming keywords that drain budget without delivering sales.

6. Cash flow problems

Amazon’s biweekly payout cycle creates immediate cash flow challenges. You invest in inventory, wait weeks for manufacturing and shipping, then wait another two weeks for your first payment.

The typical investment recovery timeline stretches 3-4 months from purchase order to cash in the bank. New sellers often undercapitalize, assuming they’ll see returns much sooner than reality allows.

Inventory planning requires significant upfront capital for successful products. Reorder quantities, safety stock, and seasonal inventory all demand cash before generating returns.

Multi-channel selling helps accelerate cash flow by diversifying revenue streams. Building cash reserves prevents desperate decisions during slow periods.

The solution:

InventoryLab Accounting integrates directly into your workflow to show true costs and profits in real-time. Track cash flow across products and channels automatically, with no manual spreadsheet updating required.

See exactly how your capital performs across different products. Make informed decisions about where to expand and where to cut back based on actual ROI data rather than guesswork.

Generate perfect reports for accountants, tax preparation, and business analysis. Export financial data in formats that save time and reduce errors during busy periods.

7. Listing optimization failures

Poor listings sabotage even great products. Incomplete titles, missing keywords, low-quality images, and weak bullet points reduce both search visibility and conversion rates.

Suppressed listings due to content violations or formatting issues stop sales completely. Amazon’s guidelines change frequently, and yesterday’s compliant listing might violate today’s rules.

Common optimization mistakes include:

• Keyword stuffing that hurts readability
• Generic product titles that don’t differentiate
• Missing backend search terms
• Images that don’t showcase product benefits

A+ Content, video demonstrations, and lifestyle images dramatically improve conversion rates. Alt text helps with accessibility and may provide additional ranking benefits.

The solution:

Start with comprehensive keyword research. Focus on terms customers actually search for, not just what sounds good to you.

Write titles that include your main keyword while remaining readable and informative. Use bullet points to highlight specific benefits and address common customer questions.

Professional photography matters more than most sellers realize. Show your product in use, compare sizes, and highlight unique features that justify your price point.

8. Struggling to get reviews

Reviews drive conversions, but new sellers face a chicken-and-egg problem. Without reviews, you can’t get sales. Without sales, you can’t get reviews. Amazon’s strict policies make the situation even trickier.

Fake reviews, competitor attacks, and negative feedback can derail progress just as you start gaining momentum. One bad review in your first ten can tank conversion rates for weeks.

Direct incentivization violates Amazon’s terms of service, leaving sellers with limited options for encouraging legitimate reviews. The platform’s buyer-first policies mean customers hold most of the power in review disputes.

Amazon’s “Request a Review” tool helps, but many sellers don’t use it systematically. Others send manual messages that accidentally cross policy lines and trigger account warnings.

The solution:

FeedbackWhiz Emails automates review requests while staying compliant with Amazon’s guidelines. Set it to trigger Amazon’s Request a Review button automatically for every order, or create custom buyer-seller messages using pre-approved templates.

Target satisfied repeat buyers who are most likely to leave positive feedback. Exclude orders that might lead to negative reviews—returns, refunds, or customer service issues.

Product quality improvements reduce negative reviews better than any messaging strategy. Track return reasons and customer complaints to identify recurring issues before they become recurring problems.

Use the global buyer blacklist to avoid sending requests to customers known for leaving unfair reviews. Focus your efforts on buyers who engage positively with sellers.

9. Account suspensions and policy violations

Amazon suspensions happen suddenly and often without clear explanations. Policy enforcement feels inconsistent—what gets one seller suspended might slide by for others.

Common violation triggers include:

• Product inserts requesting reviews
• Selling restricted products unknowingly
• Repeat ASIN infractions
• IP complaints (even false ones)
• Customer metric deterioration

Amazon Seller Support responses are frequently vague or unhelpful. Escalating cases takes time you don’t have when your account is suspended and sales have stopped.

The key is preventing violations rather than fighting them after the fact. Account health monitoring and quick responses to warnings prevent small issues from becoming business-ending problems.

The solution:

FeedbackWhiz Alerts monitors listing changes and account health issues 24/7, notifying you instantly when problems arise. Track policy violations, listing suppressions, and metric deteriorations before they trigger suspensions.

Review your Account Health dashboard weekly. Address any warnings immediately rather than hoping they’ll resolve themselves or disappear.

Stay updated with policy changes through Amazon’s official communications and seller forums. What was acceptable last month might be prohibited today.

Document all communications with Amazon and keep detailed records of your compliance efforts. If suspension does occur, having thorough documentation speeds the appeal process.

10. Intellectual property and hijacking issues

IP complaints can shut down listings instantly, even when filed incorrectly or maliciously. Competitors sometimes use false claims as a competitive weapon, knowing most sellers don’t have the resources to fight back.

Unauthorized sellers hijack successful listings, often selling counterfeit versions or legitimate products without permission. They damage your brand reputation while stealing your sales.

Amazon’s Brand Registry provides some protection, but you need a registered trademark to qualify. The registration process takes months, leaving new brands vulnerable during their launch phase.

The solution:

Amazon Brand Registry is crucial for serious sellers. Get a registered trademark as soon as possible—it’s an investment in your business’s future protection and growth potential.

FeedbackWhiz Alerts also detects hijackers and unauthorized listing changes automatically. Get notified when other sellers list on your ASIN or when someone modifies your product titles, descriptions, or images without permission.

Add logos and unique features to your products that make counterfeiting more difficult and expensive. Visual brand elements also help customers identify authentic products.

Monitor your listings regularly and report violations quickly. Amazon responds faster to prompt reports with clear evidence than to delayed complaints with vague details.

11. Managing returns and customer complaints

Amazon’s buyer-first policies create challenges for sellers dealing with unreasonable return requests or fraudulent claims. A-to-Z guarantee claims can result in account suspensions if metrics deteriorate.

FBA handles return logistics, but sellers still absorb the financial impact and review consequences. Damaged products returned as “defective” hurt your metrics even when the damage occurred after delivery.

Customer service burdens multiply with growth. Each marketplace has different return policies and communication requirements. Keeping up with inquiries across multiple channels becomes overwhelming.

Quality control issues discovered after launch create expensive recall situations. Prevention costs less than dealing with widespread problems after customers receive defective products.

The solution:

Use FBA to streamline return processing and reduce your customer service workload. Amazon handles the logistics while you focus on preventing returns through better product descriptions and quality control.

Track return reasons systematically and improve listings based on common complaints. If customers frequently return items for “not as described,” your listing probably oversells or under-explains the product.

Invest in quality control at every stage—product development, manufacturing, packaging, and shipping. Catching defects before they reach customers costs far less than dealing with returns and negative reviews.

Maintain professional post-sale communication. Follow up on potential issues proactively rather than waiting for complaints to escalate into returns or negative feedback.

How Seller 365 addresses multiple challenges simultaneously

Managing all these challenges individually requires juggling multiple subscriptions, learning different interfaces, and piecing together data from disconnected tools. That approach gets expensive and inefficient quickly.

Seller 365 includes all essential Amazon seller tools in one place for $69/month. Instead of paying for sourcing tools, inventory management, repricing, review automation, profit tracking, and accounting separately, you get everything in one subscription.

The integration creates workflows that solve multiple challenges at once:

• Source products with Tactical Arbitrage, then prep and ship with InventoryLab using the same product data
• Track true profitability with FeedbackWhiz Profits while monitoring listings with FeedbackWhiz Alerts
• Automate pricing with SmartRepricer based on costs tracked in InventoryLab Accounting

Single sign-on access, unified reporting, and consistent data across all tools eliminate the complexity of managing separate platforms. Your team learns one system instead of ten different interfaces.

Turn challenges into stepping stones

These challenges aren’t roadblocks. They’re the standard obstacles every successful Amazon seller learns to navigate. The difference between sellers who thrive and those who quit isn’t avoiding these problems, but developing systematic solutions for each one.

Most importantly, you don’t have to solve everything at once. Pick the challenge that’s causing your biggest headache right now and implement the solution. Build momentum with small wins before tackling the next obstacle on your list.

The sellers who build lasting, profitable Amazon businesses are those who prepare for these challenges instead of stumbling through them unprepared. They invest in the right tools, develop proper processes, and treat challenges as normal parts of business growth rather than existential threats.

Ready to tackle these challenges head-on? Try Seller 365 free for 14 days and get all the tools successful sellers use to turn Amazon’s toughest challenges into profitable opportunities.