The is a first in a series of articles on Creating a Profitable Fulfillment by Amazon Business. If you have no idea on what a profitable product is, or what your first private label product will be, you can search Amazon to find what customers buy and what they want.
This article will talk about the manual tactics to do this market research. In a future article, we’ll go over some software tools that will scale this research saving you days of effort and time.
Believe In Your Product
I want to talk about belief in your product first. There are people on the Internet that will tell you to find anything and sell it for a profit. This is a viable method, but does not sustain over the long term. If you want to scale your business on Amazon and beyond you need to sell a product you believe in.
This means if you find a product to sell that looks like a winner, but you don’t believe in the product, or wouldn’t use it yourself, it will be much harder for you to sell it well.
It is easy to find a cheap Chinese sowing-machine and sell it for crazy markup, but if you’re not into sowing machines, your product pages and customer support will suck. You want to be the best and most affordable sow-machine brand around, great, but be the best at customer support as well.
Finding Profitable Products on Amazon
We’ll assume you have no idea what you want to manufacture and sell on Amazon. If that’s the case, this article is for you.
For each method described below, you will pick about 30-50 items to sell and then narrow down that list to about 5-10 potential items. In the end, you’ll lock in on one item to sell.
The core goal here is to find an item that sells well, has low competition, and with a slight modification and product logo, can make similar sales.
Unless you’re carrying the additional expense of business liability insurance, you want to start your business selling low-liability items. I would suggest you skip products that are for babies or any food or liquid that goes in or touches the body. These are a nightmare waiting to happen to a small start-up business like yours.
Additionally, your first product should be simple to make and not contain many moving parts. This will alleviate any headaches you may have from poor manufacturing quality control, shipping breaking or customer use.
You’ll want to keep in mind that you’re looking for products the market demands. Trying to be a pioneer and first to market is a gamble that rarely works out. Do your research and the data will determine what sells.
Look For a Profitable Product
You will start out by looking for a product that has a low barrier to entry. Aim to find a product that will make you approximately $10 in profit after expenses per unit, sell 300 units per month, and make $3000/mo.
Finally, you’ll want to keep a running spreadsheet in Microsoft Excel or Google Sheets that allows you to track the items you’re finding. You can use the complimentary spreadsheet template located at the bottom of this article.
Find What’s Selling using Amazon Best Sellers
You can sit for days browsing and searching Amazon for product ideas. To save time you’ll want to focus on what the market demands. To do this, use the Amazon Best Sellers page for product ideas.
The high-level categories are hard to penetrate. Find odd or niche items by drilling deep down (or what we call “niche-ing down”) into sub-categories, looking for potential product ideas.
You’re looking for an item with high sales and low competition. Amazon’s ranking system is secret sauce and proprietary, but reviews and sales will rank you on the first page. Amazon will not tell you sales history of a product, but you can estimate what these products do in sales by looking at the number of reviews and the product’s Best Seller rank.
An Amazon Best Seller rank is a number between 1-and-infinity that tells the buyer (and competition) how well that product sells ranked against all other products in that category. The lower the number, the more it sells. The highest selling items get the profitable first-page position on the Best Sellers page, which makes them sell even more.
When browsing through look for product competition you can put a twist on and outperform. High review counts on products with poor listing quality are a dead ringer for products you could outperform just by making a better listing.
Niche Keyword Searching
If you have a good idea of what the market demands, and you’ve pulled out 25-50 or so items that you think you would like to sell, your next step is to do keyword searching. Most buyers who come to Amazon will come through either a Google search or use the Amazon search feature to find what they’re looking for.
Amazon has a keyword searching algorithm that will use your listing content and features to determine how well your listing ranks for specific search terms buyers are using.
For each item you’ve found by browsing, enter in search words that match the product. For example, if you found a dog food bowl that sells well, you’d search for “dog food bowls”. If your twist on that product is to make it eco-friendly, you could search for “eco-friendly dog food bowls” or “BPA free dog food bowl”. The combinations are endless, but you want to narrow down to core keywords. You will use these in the future.
Analyze the Top 10 Listings in Search Results
To determine the level of competition you’re facing, of the top 10 listings in your keyword search results, 80% should have less than 100 reviews.
It’s ok if a couple have 100-300 reviews. Any items with closer to 1000 reviews and your competition is too established for that market niche. Move on.
We gauge competition by the number and quality of reviews a listing has, which is how customers make their purchasing decisions.
For each item, determine a product’s listing’s sales by doing the following:
- Click the listing’s details and scroll to “Additional Information” where Amazon reports the Best Sellers Rank for the product.
- Enter this rank number into a free calculator tool like https://www.junglescout.com/estimator/ to get a rough estimate of the number of sales per month for the item.
- Using the estimated sales calculator, look for items that make 300 or more sales per month.
Determine Depth of Market
Of the items you’ve found, sort the top 10 estimated sales in descending from most to least, and if the top 3 listings are top-heavy and take up approximately 80% of the sales, the sales aren’t spread out. Unless you’re in the top position, you won’t get many sales with this item.
Use Google Trends https://trends.google.com/ to determine if the product sells throughout the year. Type in the product and see graph for search volume. The timeline pattern should look steady. If it spikes each year, It’s seasonal. Verify this with search data all throughout the year.
Verify Sales Over Time
Do this process each day to calculate the average estimated monthly sales for all 5-10 items you’re considering over the course of 10 days. You’ll need This is because numbers change daily and what may have an estimate of 4000 sold units today may have an estimate of 2000 sold units the next day.