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Amazon FBA Product Research may sound like a simple task of finding the right products and selling them on Amazon. Most marketers realize that conducting product research is methodical, time-consuming, and can be a little more complicated than expected. There are a variety of tools, tips, and tricks that make the process much easier and help you avoid potential pitfalls.
To help guide you in the right direction, this resource looks at Amazon FBA product research in 2019 and what makes it a critical step for the success of your business. Read on to find out more!
First, he struggles to look at the bigger picture
As Amazon attracts millions of entrepreneurs and existing retailers to list their products on the platform, the tech giant is leveraging marketplace incentives to create a competitive environment that gives customers the best prices and a variety of options in every category they can choose.
That’s why Amazon is called “The Everything Store” – they are literally selling everything. To give consumers the best shopping experience, Amazon ranks sellers based on a number of factors that affect the level of service they provide (such as delivery times, damage rates, and return rates).
You could say that Amazon is quite popular – there are more than 5 million third-party sellers worldwide, and Amazon’s share of the US e-commerce market is now 49%, or 5% of all retail costs! Trends show that Amazon dominance will only become more visible in the coming years if everyone else stays the same.
Unlike eBay, Amazon also sells products on its own platform. For customers, this means great prices and plenty of choices. For third-party sellers, this means fierce competition.
Amazon gains “The upper edge over third-party sellers is controlling the flow of sales information, affecting which product buyers first see in any search term and have deep pockets that allow them to lower prices and lower margins.”
Note: If Amazon is selling a product similar to yours in the same category, or if you find a niche product where Amazon is currently competing, it’s a good idea to think before you enter that market.
Why is Amazon FBA product research important?
Amazon Product Research is your ticket to finding winning product ideas for sale on Amazon. In an ideal world, as a salesperson, you would choose products that are based on your interests or what you think would be the best seller.
While this may have been a viable approach 5-10 years ago, attending this course is a very risky strategy in today’s e-commerce environment. Sure, you might come up with the right idea when you first try and transform your Central Seller account into a highly profitable business. Or you may find that the selected products have a lot of competition, low demand and lots of alternatives.
Just because you love any particular item really means that it will sell well on Amazon. To get the guesswork out of product research, it’s best to create a set of criteria for your ideal product and use the data to test potential opportunities.
Amazon FBA Product Research provides you with the right knowledge by providing instant analysis of market trends through data collection. Accumulated data is best used to drive your decisions. By looking at the right information and adopting a data-driven research approach, you can enjoy the following benefits:
- Create more sales with better profit margins in return.
- Find the right suppliers.
- Original products that are easy to manufacture and with little competition.
- Find product development ideas.
- Check out not only seasonal products, but also products with constant market demand throughout the year.
- Evaluate the success of your competition.
Having said that, Amazon FBA product research is necessary because, unlike other markets, with Amazon FBA, each product can be listed only once.
“Car yards and fast food chains usually open shops side by side to benefit from the promotion and hard work of their competitors. In many ways, the same can be said for how Amazon sellers compete at the SKU level. Instead of digging a well in the desert, you feel more like competing for a spot on a watering hole.“source
Tip: As much as you can, avoid competing with Amazon. The fight comes as the company is essentially a giant retailer and its motivation is to keep an eye on Amazon. If they decide to sell the product, they are almost guaranteed to win the purchase box.
What type of FBA seller are you?
So where do you start?
Basically, you need to find the right products. The first step is to understand how you will bring your products to market. By getting a better understanding of the market mechanisms of your business, you can streamline the process of achieving your goals.
If you’ve been wondering about this question, are there three broad categories that FBA companies fall into:
- Retail Arbitration.
- Private label.
This type of Amazon business is primarily about finding opportunities where products can be bought in stores and sold on the platform for profit.
“To determine if arbitrage is possible, resellers use barcode scanning applications on their phones. When a barcode is scanned, the application analyzes a number of factors such as competition for that SKU, probability of product sales, sales volume and price movements to determine the best the selling price and the likelihood of profit from the item in question. “source
If the numbers add up, trade arbitrators will buy as much as they can and send them to FBA warehouses for profitable resale on Amazon.
Useful barcode scanning applications include:
To learn more about successfully finding the right products and selling them on Amazon, check out this guide from The Selling Family.
As online marketers, resellers fall into the same category as Amazon’s trading activities – in stores you can find at your local mall (unless they’re online).
The business model is simple: shop wholesale, retail.
Sellers add value by breaking large quantities and providing convenience to customers who now want a product without having to buy 100 units. To some, this type of seller does not seem to give much value to the scheme of things. However, they play probably the most important role in the Amazon ecosystem. Sellers bring competition to a platform that helps lower prices and gives buyers more choice.
Tip: The key to a reseller’s success is winning a shopping cart. Why? Because more than 90% of Amazon sales are through a shopping cart.
There are a wide variety of ways to succeed as a reseller. You can either sell products that are already available on the platform, or reach out to high-value companies that currently sell on Amazon and offer to bring their products to the world. Companies like Export-X support local brands by providing software and services to help them sell on Amazon markets worldwide (with Export-X being a reseller).
“Working with Amazon’s private label involves downloading existing products and adding your own brand to them. Many manufacturers offer white label products that can be re-branded to their own needs. “
Private label retailers add value by increasing their product offering. There is a wide range of sellers of this kind – from those who simply add their logo to an existing standard product – to companies developing innovative, world-class goods that solve specific problems or create new opportunities for customers.
By dealing directly with manufacturers, private label retailers have a high level of flexibility to tailor their supply based on feedback and market demand. By “cutting the middleman”, profit rates are usually higher.
To conduct product research as a private trader, it’s a good idea to look for categories that include:
- High demand / bad reviews.
- Strong sales / bad marketing.
- New markets / immature lists that are earning yet again attracted attention.
If you are still unsure about which type of FBA seller you are most comfortable with, check out this article from SamPriestly.com, which provides detailed benefits and disadvantages backed by hypothetical days in the life of each type of seller for which you have a better understanding of each category.
How to Do Amazon FBA Product Research – Step by Step:
Here is our favorite method of conducting Amazon FBA product research. While not the only way to decide which products to sell on Amazon, we recommend this method because our customers have found it to be the most effective way to narrow down exactly what to sell.
Step 1: Decide what kind of salesperson you will be (as mentioned)
When considering which way to go, it is important to keep in mind your final game. Where do you want to take the job? Do you plan to sell your business on Amazon FBA in the future? Do you maintain a small life organization that will support your passions? Or maybe you’re thinking about building an e-commerce empire.
Starting with a goal at the end, you can work backwards to reverse engineer the best course of action to make it happen. For more on the topic of selling your Amazon FBA business, check out this free A2X guide.
In general, retail arbitration is the easiest way
People often dip their toe into the water starting with retail and then switch to reselling or developing private label products after becoming more comfortable with Amazon’s sales process.
Step 2: Set the criteria for the product source
Before you understand what a good opportunity looks like, you need to establish a set of criteria that will define what you are looking for and filter the items that meet your needs.
Everyone has a different set of criteria and there is no right way to achieve it. Some sellers choose to distribute light, medium-value, niche products with low competition. Other sellers are looking for large and bulky items with fewer people participating in the business. Larger sellers, on the other hand, tend to compete in the field of large quantities, products of great competition, such as toiletries and linen.
Starting with your endemic aspect, you will have a better idea of the results you are looking for. This will guide you according to the source criteria.
Here are some factors to consider:
- Price – Private label retailers often advocate selling items in the $ 20- $ 150 range. It’s hard to convince people to buy from brands they’ve never heard of that cost more than $ 150.
- Competition – the lower, the better. You can estimate this by looking at the number of top-selling product reviews.
- Demand – how many units are ordered on average each month. You can evaluate this by using the sales appraisal tool to get a rough idea of how many units sell top-ranked products.
- Seasonality – is demand consistent throughout the year or do orders tend to increase at certain times such as Christmas? You can determine seasonality by searching for relevant keywords in Google Trends.
- Weight – The heavier and cumbersome the item, the more it will cost to deliver. Small and light products are the best, but they tend to attract the most competition.
- Profit margin – how much margin can you make from a product? Private label retailers tend to increase margins from resellers but attract unexpected costs such as product testing, photography, promotion and development.
StartupBros recommends the following criteria when selecting a private label product for sale:
Step 3: Use data to research products and find opportunities to sell items
The following tools are useful for product research:
- StartupBros FBA Product Scheduler – Provides a comprehensive set of metrics to compare each product. Available as part of the StartupBros FBA training program.
- Running the Amazon Product Finder Virus – This is just part of a comprehensive toolkit that recommends product ideas and helps you rank every opportunity.
- JungleScout Web Application and Chrome Extension – This helps Amazon sellers and affiliate marketers research, find hot products on Amazon, track and understand trends. Of all the tools available, we found the Jungle Scout to be the most up-to-date and cost effective. See this guide for more information on how to use their tools.
Trying to find product ideas? Here are some places to look for inspiration:
- Amazon bestseller list
- Amazon showcases.
- Physical Point of Sale Research.
- Amazon movements and shakes.
- Browse products on Pinterest.
- In Shopify trend.
- Looking at the trend list on eBay.
- Checking the section – “Customers have also bought” below the various items of interest.
- Browse the weekly AliExpress bestseller list.
- Amazon’s product layers.
Just remember to stick to the criteria you selected in the previous section.
Step 4: Contact potential suppliers
Once you have found an opportunity that meets your procurement criteria, it saves time to establish a procurement agreement. For private label products, it is most common to look for Alibaba. Some merchants also use other original sites, such as Global Sources.
If you want to become a reseller, you should first contact the manufacturer or brand that represents the products you want to sell. However, they were afraid to act creatively there. There are many different ways to get products – like talking to distributors and
working with local contract manufacturers
Useful tips for better exploring Amazon FBA products
Having listed the potential profitable products you want to sell that are current on Amazon helps you do a detailed analysis of the same items if they generate enough sales. You can then look at their reviews for good and perform a keyword search test.
Take the time as you research your products on Amazon FBA. Here is an interesting list for beginners of Amazon product research products. It talks about sales prices, profitability / healthy profit margins, high demand, low competition, and even questions to ask yourself about product quality.
While this is already there, here are some common products to avoid:
- Digital products such as cell phones, applications, cameras and other complex products such as pictures or jewelry. It takes them an insane amount of variation that will add complexity to your business. complicated deliveries and workmanship details.
- After all, you may want to avoid the products you eat or use on your body, such as foods, lotions, creams, dietary supplements, as they usually have potential obligations. For Amazon Restricted Categories, here’s a guide worth your time.
Take action today
The most common mistake of seeing a salesperson is not creating a measure. So many people are looking for that perfect opportunity, but they are ready to negotiate a good opportunity. The trick here is to learn through action. Put in a plan, determine a road map, and stick to it.
Start with a small amount of capital at first and focus on learning. Once you know what you are doing, the world is your oyster!
For a more detailed guide on becoming an Amazon FBA Reseller, see our complete guide on how to succeed with Amazon FBA in 2019!