Amazon risk analysis
4 min readOct 18, 2021

Amazon must consider risk control, because most of the Amazon sellers send fba, which is different from domestic e-commerce companies. Domestic e-commerce companies have been removed from the link and the loss is not large. And the goods are in the country, there is still a way to solve it. But there is a problem with the Amazon link, your goods are all overseas, and you are still preparing for one month or three months, and the loss may cause you to return to the pre-liberation overnight. Like the accounts that have been blocked recently, the loss of the account is not that big, and the biggest loss is hundreds of millions of dollars in inventory.

Then the most basic risk control is not to do illegal operations, such as manipulation of comments, illegal comments, placing small cards to drain traffic, and requesting and commenting software, etc., all cannot be used. In addition to these, there are the following risk content analysis:

1. Product quality issues

2. Return on investment (profit/investment)

3. Capital turnover problem (excessive cargo pressure caused by shipping)

4. Security hazards

5. Excessive competition

6. False demand problem

7. Design-driven/technology-driven/innovation-driven/capital-driven/trend hotspot/promotional resource-driven

8. Supply chain stability issues

9. Certification

10. Infringement issues

1. Product quality issues

There are some products whose quality requirements are not so high, such as potato mashers, wine corkscrews, etc. These products can be used if the quality is not bad. However, some products have high quality requirements, such as Bluetooth headsets, whether the customer receives a call, listens to music, whether the signal is smooth, whether there is noise, whether it is resistant to electricity, and so on. The same is true for small appliances. For these products with high quality requirements, we must do a good job of quality inspection. The quality must be controlled well. The cost of returning high-value small appliances is also high. You’d better find a repair point overseas, otherwise you can’t sell it if the customer returns it to Amazon, and the value of the product is tens of dollars, and the business may not be profitable.

2. Return on investment

How much gross profit is, how much investment each month, how much of the stock, how much profit these should be considered good. If it is not done well, it will easily lead to losses. Don’t hold on to the idea of ​​losing money in the early stage and making money in the later stage. This idea is not in line with business logic. You lose money in the early period, unless you make changes, it is impossible to become profitable in the later period.

Third, the problem of capital turnover

Before you make a product, you must calculate how much cash flow you have. Because you don’t do a good job, the capital chain will break in the later stage, and if you don’t have money to purchase goods, the company will go bankrupt. If you ship products by sea, the shipping cycle will take 30 to 40 days, which means that you have to float a batch of goods at sea for 30–40 days in addition to the products placed in overseas warehouses for 30–40 days, and Amazon pledges half of it. For monthly withdrawals, you need half a year’s funds to be calculated in it. For sellers who don’t have so much cash flow on hand, you need to pay attention to that the value of the products you make cannot be high, and the logistics cycle cannot be too long, otherwise you will face the risk of breaking the capital chain.

Four, safety hazards

Some products will bring security risks. At that time, it will not be a problem of removing Amazon. It may be a problem of huge claims or even a lawsuit. For example, a balance car. You can buy insurance products.

5. Excessive competition

For the homepage, there are tens of thousands of comments, and the thousands of comments are all over-competitive categories. As soon as you make this product, all kinds of gods will spoof you. Such as mobile phone case, tempered film, data cable, Bluetooth headset, aroma diffuser and so on.

Sixth, the problem of pseudo-demand

What you think is just demand is actually a pseudo demand. For example, some people thought it was troublesome to find remote control, so they developed an app to remotely control the TV air conditioner. This is basically a pseudo-need. The remote control is only five dollars or ten dollars per roadside, so why download the app.

7. Design-driven/technology-driven/innovation-driven/capital-driven/trend hotspot/promotional resource-driven

Understand that your product is driven by design/technology/innovation/capital/trends/promotional resources, which drive it depends on, and strengthen the advantages in that respect, and give up the advantages that you don’t have.

8. Supply chain stability issues

Nine, certification

X. Infringement

The certification and infringement must be checked clearly, otherwise the best sold may be off the shelf at any time, then the product will be meaningless.

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