How To Choose the Right Product to Sell on Amazon
How to do it the hard way…and the easy way (hint: use Jungle Scout)
Last week, I wrote about 6 tips for selling on Amazon. I also promised that I'd share how to have a great product and do market research for the ultimate success on Amazon.
Selling on Amazon is not about being an e-commerce expert. Thankfully, Amazon does all the heavy lifting for you in terms of web development, payments, search, and more. There are millions of people coming to Amazon each day looking for products-products you could be selling to them. The key is to provide a product that stands out and gives you the best opportunity for success.
I'll share the 11 ways to choose the right product for success on Amazon, but first a note on a product that will put you lightyears ahead of other Amazon merchants-Jungle Scout.
Jungle Scout is an amazing Chrome browser plug-in that helps you save time by researching products with just one click. It gives you a competitive advantage in seconds with smart filters, exclusive to Jungle Scout.
With Jungle Scout, you can:
- Have the right data at your fingertips: Jungle Scout's Extension will help you make decisions based on actual data, not intuition. With the click of a button, see a product's estimated monthly sales, Best Seller Rank, revenue, or other criteria that is critical in identifying profitable opportunities. Filter, organize, and export to CSV to aggregate and organize key data points to accelerate and inform your Amazon product research.
- Find product ideas galore: Jungle Scout's Product Database found inside the Web App will help you find profitable products in seconds. Stop wasting time browsing a site built for consumers. They've rebuilt Amazon's catalog specifically to help sellers find profitable products: filter by Monthly Sales, product size, number of reviews, and more to find thousands of product opportunities with one click.
- Know and smoke the competition: Jungle Scout's Product Tracker found inside the Web App will monitor your competitors' pricing, inventory, profit margins, and more. In the competitive Amazon marketplace, knowing what your competitors are doing is the difference between success and failure. The Product Tracker shows you the data you need to ensure a profitable product opportunity.
- Find riches in the niches: The Niche Hunter feature of the Web App is the easiest way to find niches of opportunity on Amazon. Filter results by level of demand, competition, even use a proprietary "Opportunity Score" setting to uncover your next private label brand. The Niche Hunter is the only way to uncover the riches in the niches in an efficient and scalable way!
If you're interested in having huge success on Amazon, head on over and get Jungle Scout for a free 30-day trial now.
Now the 11 ways to choose the right product on Amazon.
1 Choose the right category
Do yourself a favor and for your first product, only look at categories that are well suited for private label products. Yes, of course you could sell in lots of different categories, but don't make it hard on yourself; just choose one of these beginner-friendly categories. These categories are:
- Sports and Outdoors
- Home and Kitchen
- Patio, Lawn, and Garden
- Pet Supplies
Categories that I don't recommend for any private label beginner (or at all, for that matter):
- Appliances (have you tried shipping a refrigerator?)
- Camera and Photo (too complicated and big brands own the category)
- Electronics (more on this in later)
- Jewelry (quality control issues)
- Music (maybe OK for retail arbitrage, not good for private labels)
- Watches (brands are big here)
There are literally thousands upon thousands of possible products in the remaining categories. It is up to you to go digging to find the opportunities. Here are nine more steps to help you in the process.
2 Choose a small and lightweight product.
For your first product, you do not want to mess with anything classified by Amazon as oversized. That means nothing that weighs over 20lbs (ideally less than 5lbs), or is longer than 18".
This is called the "shoebox test". You don't want anything that won't fit in a shoebox and can't be easily carried with one hand.
There are multiple reasons for this: the most important is that Amazon charges higher fees for oversized items. Additionally, Amazon will only allow new sellers a limited amount of oversized items to be stored in their warehouse. Lastly, oversized items are more expensive to get from China via air shipping. Large items are a hassle and expensive for your first product.
3 Choose a simple product, not easily breakable.
Chances are, the more complex and the more moving parts your product has, the more problems you will come across. Think of a yoga mat vs. a cuckoo clock. Which is more likely to have problem? I've never seen a broken yoga mat. The simpler the item the better. You also want to stay away from anything that has complex electronics or glass. There is just too big of an opportunity for it to break in shipping.
4 Find a product that sells at a "moderate" price range.
You want your product to sell to the customer for a retail price between $15 and $50. Less than $15 and you're not left with enough profit after Amazon takes their cut. Greater than $50 poses a few different inconveniences. First, the sales volume of these items is often lower because there are less impulse purchases. Second, in general, people want to know more about a brand that they are spending more money on. Not exactly helpful for a private label product, especially your first product.
5 Avoid patented products.
The reason for this doesn't need too much explanation. I would highly recommend building your Amazon business with a long-term outlook. Knowing that, you need to do things by the books: don't infringe on patents!
How do you know if a product is patented? Usually it is listed in the Amazon product description or the product description on the website. Always use your common sense. Is it a very unique design that does not have any direct competitors?
Then, more than likely, it is patented. I also recommend doing a Google search for the product name with "Patent" on the end, or just visiting the US Patent and Trademark Office website.
6 Create a long list of ideas.
From the first five tips, you know what type of item you would be willing to sell. Now, let's start brainstorming some possible ideas.
HELPFUL TIP: Since the advent of Jungle Scout's Web App, this step is now super easy. We would highly recommend checking it out at this point if you're having any trouble with this step.
Try to create a list of 30-50 products. Need to get the creative juices flowing? My favorite two sources are directly on Amazon:
- Amazon best sellers - Drill down into the categories by clicking the sub categories on the left. Keep clicking sub categories to drill deeper and deeper.
- Spying on other Amazon Sellers
To find a seller you think is selling a private label, go to their storefront by clicking on the seller name, shown below by the red arrow. Now search through their products for ideas. (Jungle Scout Owner Hint: Extract all their products then sort by sales to find their best sellers).
7 List them all on an Excel sheet.
Go straight to the source, Amazon, and check how well this item is selling. For instance, if you're thinking about selling Grill Gloves, simply search "grill gloves" in the search bar and see which results pull up. If you have Jungle Scout, great, this part is really easy for you. Just click the JS button and you're done.
Now, say you would like to see the top 10 results having a cumulative number of monthly sales of 3,000 or more. How do you know this? The free (and more time consuming) option is to get the BSR (best sellers rank) from each of the top 10 products, or research them on Jungle Scout.
If the item does not pass this test, delete it from your spreadsheet. Trying to sell something that is already not selling well is risky. This step will probably cut your list in half.
8 Assess the competition.
Is this market completely saturated, or is there room for you to enter? Here, you want to look at the overall number of sellers, the number of reviews and the quality of their listings.
If you have Jungle Scout, the first two steps are super quick. This area leaves a little open to interpretation. You want to see someone in the top five with less than 50-100 reviews and/or poor quality listings. The way you're going to organically get sales is by climbing to the top of the rankings by creating a superb listing and getting reviews. If the entire first page of Amazon is saturated with competition that all have 100+ reviews and high quality listings, it's going to be tough competition.
What makes a high quality BSR listing? As a quick check, look for numerous high quality pictures, good descriptions on all five bullet points, and a well written product description. As a rule of thumb, you can usually jump anyone in ranking that has a poorer quality listing than you and less than 50-100 reviews. If you use this rule of thumb, can you get into the top 3 listings? What about top 5? In your spreadsheet, write the number you think you would rank if you had 100 reviews and a very high quality listing. Congratulations, you just ranked your products from best to worst, obviously, with 1 as the highest.
9 Find something that needs simple improvements.
While making small changes to an item is certainly not necessary for your first product, it's icing on the cake if you can find a product that needs a simple tweak to make it perfect. How do you know what an item needs to be perfected? Read the existing reviews on Amazon. If the item has a bunch of two star reviews saying that they love the item, but the straps just aren't thick enough, you've hit the jackpot. Ask the factory for thicker straps.
10 Get factory pricing.
Only now will you contact the factories and get estimated pricing for your products. It is a waste of time to do it any earlier. What does your spreadsheet look like now?
Use conservative numbers and figure out which products you can source for about a third of the sales price on Amazon. This will probably cut your list down to just a couple products. At this point, is your gut telling you which product you like better? If not, contacting the factories will. You'll find most of them don't reply or aren't easy to work with. Throw them out.
11 Take action.
Step 10 is where 90% or more people won't follow through. Those of you who do, congratulations! Proper product selection will likely make or break your business, so it is worth investing a serious amount of effort here.