What 100+ Marketplace Seller Audits Taught Us About Operations That Kill Growth

The 5 most common fulfillment mistakes that silently sabotage 7-figure brands

Most brands think scaling on Amazon, Target, and Walmart is all about ad spend, ranking hacks, or creative. But after auditing 100s of marketplace seller accounts (ranging from $0.5M to $82M in annual revenue), we’ve seen the real story: Growth doesn’t stall because of bad marketing. It stalls because of bad operations.

At Adverio, we work with brands that are scaling fast and leaking profit even faster. If there’s one hard truth we’ve learned, it’s this: you can’t outgrow operational inefficiencies. They compound over time, eating away your profits and momentum. This is also true for company’s growth trajectory.

Below are the top five recurring fulfillment and operations mistakes we see killing momentum in 7- and 8-figure marketplace brands — and how to fix each of them.

1. Treating Amazon Like a DTC Brand (Especially With Inventory)

Direct-to-consumer (DTC) brands thrive on speed, flexibility, and control. Amazon… doesn’t. What works in your Shopify store or retail channels can backfire on Amazon’s platform, especially when it comes to inventory planning and supply chain.

We see brands constantly falling into these inventory traps:

• Underestimating Amazon lead times (e.g. assuming you can restock as quickly as a DTC site, when Amazon’s fulfillment centers require longer prep and check-in time)
  
• Overcommitting to slow-moving SKUs (tying up cash in products that don’t turn over quickly)
  
• Running out of stock during peak sales windows (Prime Day, Black Friday, holiday season, etc.)
  

Why it matters: Amazon punishes stockouts with lower search ranking and algorithmic penalties. If your product goes out of stock, you not only lose sales — your organic rank can plummet and take weeks (and hefty ad spend) to recover. 

In fact, during the 2025 tariff crisis, 93% of Amazon third-party sellers reported losing revenue due to stockouts, and 75% of customers said they would switch to a competitor after experiencing two stockouts. On the flip side, overstocking eats into your margin through high FBA (Fulfillment by Amazon) storage fees and slowing sales velocity. Globally, mismanaged inventory (overstocks and stockouts) cost retailers an estimated $1.77 trillion in 2025, so the stakes are high.

Fix it: Use marketplace-specific inventory models and forecasts. Plan for longer inbound shipping and warehouse check-in lags. Buffer safety stock for each important SKU (stock keeping unit) to prevent stockouts, but also set clear sell-through targets to avoid overstock. 

Treat Amazon inventory like its own beast: build in extra lead time, and stagger new product launches to ensure you can keep each SKU in stock (protecting its rank). In short, be conservative with Amazon inventory — slow and steady beats running out or tying up cash in unsold goods.

2. Overcomplicating Fulfillment with Fragmented 3PLs

Many brands outgrow their first fulfillment partner but don’t execute a clean transition. Instead, they bolt on new regional 3PLs (third-party logistics providers) or separate warehouses for certain product lines. Before long, your fulfillment operation becomes a spaghetti mess of providers and processes.

Symptoms: We often find brands struggling with:

• Poor visibility into stock levels (inventory scattered across multiple 3PL systems, making it hard to know what’s actually available)
  
• High error rates (more touchpoints and handoffs mean more mistakes in picking, packing, and shipping)
  
• Inconsistent SLAs (service-level agreements on delivery times) (different warehouses have different shipping speed standards, hurting brand consistency)
  

All these issues lead to slower order processing, more customer complaints, and higher costs due to inefficiency.

Fix it: Simplify and consolidate fulfillment wherever possible. Ideally, use a primary fulfillment partner (or an integrated network) that can cover all your needs across regions and sales channels. For example, a provider like WAPI (which offers centrally coordinated 3PL services across multiple countries) can give you a unified tech platform and consistent performance standards. 

The goal is to have one source of truth for inventory and one playbook for fulfillment. Centralized fulfillment (or at least centrally integrated oversight) means fewer surprises and a smoother experience for both you and your customers. It also makes it easier to scale — you can handle spikes in demand or multi-channel expansion without dropping the ball.

3. Inflexible Packaging That Fails Retail and E-Commerce

Packaging designed solely for your DTC channel often doesn’t hold up in Amazon’s FBA (Fulfillment by Amazon) environment — or worse, fails in retail stores if you expand into brick-and-mortar. An inflexible packaging strategy can sabotage you in two ways: damaged products and poor retail readiness.

Common mistakes:

• Packaging that gets damaged in transit (boxes or materials that can’t withstand Amazon’s shipping process, resulting in crushed product boxes or leaking contents)
  
• Units too large/heavy for shelf economics (package dimensions or weight that make it impractical for retail shelf display or cost-prohibitive to ship/store)
  
• No UPC (Universal Product Code) alignment across retail and e-commerce (using different barcodes for the same product in retail vs. Amazon, leading to tracking and listing headaches)
  

If your packaging isn’t durable, customers will receive broken or defective items and send them right back. “Product arrived damaged” is a frequent cause of Amazon returns, often due to flimsy packaging or improper box sizing. Meanwhile, packaging that isn’t retail-optimized can ruin your chances with brick-and-mortar retailers – for instance, if your item doesn’t fit standard shelf layouts or lacks scannable barcodes, it creates extra hurdles and costs for them.

Fix it: Design packaging once to work for both online and offline channels. Invest in quality materials and test your packaging for durability under rough transit conditions (drop tests, vibration tests) to ensure it survives FBA handling. Make sure your package dimensions and weight are optimized for Amazon’s requirements (to avoid surcharge fees or prep issues) and meet retail distribution needs. Use a single universal barcode on the product packaging so that the same SKU can seamlessly go to Amazon FBA or to retail stores without re-labeling. In short, aim for packaging that is rugged enough for e-commerce fulfillment and still appealing and practical for retail shelves.

4. No Margin Visibility Across SKUs

Many 7-figure sellers scale up their sales and assume profits will follow. In reality, per-SKU profitability varies wildly — and you might be pouring resources into a product that’s barely breaking even (or actually losing money). One of the most common findings in our audits: Your best-selling SKU is often the one quietly killing your margin. High volume doesn’t always equal high profit.

Why does this happen? A few usual suspects:

• Hidden fulfillment costs: Some products incur unexpected fees (oversize item charges, long-term storage, special handling) that quietly erode margins.
  
• High return or defect rates: If one SKU is frequently returned or replaced, the refund and refurbishing costs can turn a profitable item into a loser.
  
• Promo-heavy sales: Your “hero” product might sell like hotcakes during promotions or via aggressive PPC ads, but once you factor in those ad costs or discounts, the net margin is razor-thin.
  

It’s shockingly common to discover high-revenue products that generate little to no profit once all expenses are tallied. In other words, your bestseller could be a hidden loss leader without you realizing it.

Fix it: Track gross margin by SKU religiously. Go beyond Amazon’s default reports — build a system (even if it’s just a detailed spreadsheet or a third-party analytics tool) to monitor the true profitability of each product. Include every cost: FBA fees, referral fees, storage fees, shipping, returns processing, advertising, packaging, etc. When you have accurate SKU-level profit data, make decisions accordingly. 

You might need to raise prices, cut back ad spend, optimize the product’s cost structure, or even discontinue a popular item that’s underwater. The bottom line is to scale profitably. Let data, not gut feel or top-line sales, drive your strategy. Double down on products that deliver healthy contribution margins, and remediate or drop the ones that don’t.

5. Ignoring Returns Data as an Ops Signal

Too many sellers treat returns as merely a customer service hassle, rather than an invaluable operations feedback loop. That’s a mistake. Recurring return reasons are like direct whispers from your customers about what’s wrong — and smart brands listen.

For example, your returns and reviews can reveal:

• “Item not as described” – This is the #1 return reason on Amazon, which tells you something in your product listing (photos, description, or expectations set) is misleading or unclear. If buyers feel the product received isn’t what they thought they ordered, you have a messaging or quality control problem to fix.
  
• Sizing or fit issues – If apparel or accessory customers keep saying the item “runs large” or “didn’t fit my space/device,” it flags that your sizing charts, product dimensions, or compatibility info might be inaccurate. This insight should prompt a correction in your listings or even a product redesign for true-to-ad specs.
  
• Packaging or damage complaints – If many returns cite broken parts or leaked liquids on arrival, it points to a packaging failure (as discussed above). Maybe the inner packaging isn’t protecting the product, or your items aren’t being prepped properly for FBA transit.
  

Fix it: Leverage return data as a continuous improvement tool. Use Amazon’s Voice of the Customer dashboard, return reason codes, and review comments to track patterns. Quantify how often each reason appears. 

Then close the loop: feed these insights to your operations and product teams. Improve your product descriptions and images if “not as described” keeps popping up. Work with your manufacturer if a certain component is prone to breaking. 

Update sizing info or include comparison images if customers are confused about fit. By treating returns analysis as a proactive audit, you’ll reduce future returns and improve customer satisfaction. Plus, lowering your return rate has side benefits; it preserves your ratings and can even boost your search rank (Amazon’s algorithm notices when products earn too many returns and negative reviews).

Final Thought: Operational Weakness Scales Faster Than Revenue

If you’re scaling fast and starting to feel the strain, don’t assume it’s a marketing or demand problem. In our audits, about 70% of growth stalls were caused by operational issues, not lack of demand. Operational weak points — whether in fulfillment, inventory, or product quality — will magnify as your sales grow.

The good news? Fulfillment and ops issues are fixable. Unlike chasing the latest marketing hack, improving your operations yields compounding benefits. Plugging a leak in your fulfillment process or optimizing your supply chain can free up cash flow, boost customer satisfaction, and give your growth a solid foundation. When you shore up these behind-the-scenes fundamentals, you’ll likely find that your ad spend and marketing efforts start to deliver much better ROI (because you’re not losing dollars to operational inefficiencies).

In short, you can’t scale your business on a shaky operations base. But if you fix the leaks, you’ll unlock smoother, more profitable growth and a lot less stress.

About Adverio

We help high-growth Amazon brands stop leaking profit by fixing the operational cracks that marketing can’t fill. From listing optimization to margin-focused supply chain audits, our team helps brands scale smarter, not just faster.👉 Book your Free Profit Leak Detector– We’ll uncover your top profit-killing ops in a 20-minute call. No pitch. Just clarity and actionable insights.