“Without data, you’re just another person with an opinion.” – W. Edwards Deming
In the vast landscape of Amazon, where millions of products and brands compete for attention, why do a select few achieve remarkable success? What sets them apart from the rest?
Have you ever thought about it?
The answer lies in their ability to effectively conduct Amazon product research.
In the ever-evolving world of e-commerce, where consumer preferences change in the blink of an eye, successful sellers understand the importance of staying ahead of the curve.
They recognize that product research for Amazon is the key differentiating factor that can make or break their business.
It goes way beyond simply finding a product you like, making a product listing on Amazon, and hoping for the best.
It involves delving deep into the needs and desires of your target audience, understanding the competitive landscape, and identifying lucrative opportunities that can propel your business to new heights.
So, we’ve put together this comprehensive guide to provide you with some definitive tips for your Amazon product analysis and research journey.
Let’s jump into it:
Here is a quick peek into the article:
Product research is the process of carefully analyzing different products or niches based on multiple metrics to determine which product to sell on Amazon.
When it comes to selling products online, you can’t just rely on your instincts or gut feelings. You need to gather information, look at multiple metrics, and use it to make smart choices.
Your unique “water bottle” idea may seem groundbreaking, but can it generate substantial profit for you?
Only data can tell that!
Even if it does, your product may not perform well in an already saturated market.
To avoid starting a business that fails, you need to be smart about picking a product. So, given below are the five factors that help you decide which product to sell on Amazon.
After you have shortlisted some products, how do you know if they’ll be profitable?
Product validation plays a crucial role in this scenario.
In this section, we’ll tell you the four cornerstones to validate your (next) product idea. They are
When researching potential products to sell, it’s essential to conduct a thorough Amazon product demand analysis. Without demand, no matter how brilliant your product is, nobody is going to purchase it.
Here are some factors to look at to identify demand for your product.
Find a product that has a higher average unit sales per day. For a baseline, you can keep it as 10 sales per day.
That means when the product generates at least 10 sales per day, it has a significant demand to start with.
This isn’t the entire story, though!
If the product generates only 10 sales/day with high operating costs, it is not a good product either.
Why?
The profitability of the product comes into the picture. A high average sales imply better profitability.
Let’s say you choose two products, both selling at $30.
Product A sells about 5 units per day, and Product B sells 10 units per day.
If you get a profit of $10 after the Amazon FBA fees, shipping, promotions, etc., the gross sale you make per month in Product A is $30* 5 units * 30 days = $4,500, and in Product B is $30* 10 units * 30 days = $9,000
And the profit you make for Product A is = $10 * 5 units/ day * 30 days/ month = $1,500 per month, and Product B is $10 * 10 units/ day * 30 days/ month = $3,000 per month.
Clearly, you can see that the type of products with higher average sales units per day have better profits.
Understanding the sales frequency of a product can be complicated, but looking at the best seller rank (BSR) can help you understand the sales performance of a product within its category.
A lower BSR suggests higher sales.
For instance, a product with a BSR of 20,000 sells significantly less than a product in the same category with a BSR of 2,000. Therefore, avoiding selecting a product with low sales potential is important even if it reaches the top spot.
To ensure high sales when you reach the top spot, it’s advisable to have 3-5 products in the main category with a BSR rank of around or below 5,000. The more products you have with a low BSR, the better your chances of success.
Note: When examining the BSR, focus on the main category rather than subcategories. And keep in mind a product with BSR #100 in the Electronics category wouldn’t generate similar sales as a product with BSR #100 in the Pet Supplies category.
Use the SellerApp Product Intelligence Tool to filter the right products that can actually sell on Amazon. You can use SellerApp’s unique “Opportunity Score” feature, which analyzes the product and gives a score based on the following criteria.
A high Opportunity Score indicates that the product can be highly profitable if you choose to sell, and vice versa.
One of the easiest ways to identify product demand is by looking at the keyword search volume.
If the product keyword already has a decent search volume, you don’t have to reinvent the wheel.
As a rule of thumb, see if the top 2-3 product keywords have at least 10,000+ search volume to understand the demand. However, it may vary based on your product type and niche.
Note: Stay away from a product with a very high search volume, as this niche might be too competitive to enter and make a profit.
We suggest you use the SellerApp Reverse ASIN tool to find the keyword search volume of relevant products on Amazon.
Log in to the SellerApp dashboard. Go to the Reverse ASIN tool, and add your competitor ASINs.
Here you can analyze the keywords based on search volume.
Find products that encourage repeat purchases, like cosmetics, beauty products, etc.
These products can help you create customer loyalty and brand retention, thereby improving customer lifetime value (CLV). Recurring items indicate that customers are satisfied with your product and trust your brand. They are also less likely to switch to competitors or substitutes.
On top of that, it reduces your acquisition and marketing costs. You don’t have to spend much money attracting new customers, as you already have a loyal customer base.
Seasonality represents how a product’s demand changes over time. If you take the example of products like raincoats or winterwear, then you can see the demand for these products increase drastically during monsoons and winter.
Some product demand also increases during holidays, for example, Halloween costumes or decorations.
You can use Google Trends to identify what times of the year some keywords are searched more.
If the search volume trend data is steady, it means the products sell around the year.
But if there’s a periodic spike in the search volume, it shows seasonality.
A business built around seasonal products may be profitable but wouldn’t be sustainable in the long run.
Not only demand, but you also should research the niches and look at customer sentiment to understand if it’s the right product to sell.
Reviews are a necessary part of selling any product successfully, but it also helps you understand the difficulty of entering the market.
Imagine a shopper sees two products in the search result, one with very few reviews and another product with 50+ reviews. Which one do you think the shopper will click?
Obviously, the product with a higher number of reviews.
As a new seller, without many reviews, it would be challenging to break into niches where the top products already have hundreds of reviews.
So, as a baseline, look at products where the top 2-3 listings have less than 50 products on the first page.
Analyze the product reviews and Q&A section to see what customers discuss. If the top products already have 4.5+ ratings, there’s a high chance that these products are already perfected, and it will be difficult to identify gaps in the product.
But for products with less than 4.5 ratings, you can identify some negative reviews and understand the gaps in the products. Use these gaps to improve your products and tailor your product messaging.
You can’t miss out on competition when you’re researching a new product.
Here are some factors to consider:
Don’t select a product that has a low entry barrier.
The more difficult to enter a new market, the fewer new sellers will pose a threat to your product.
So, look for products requiring high capital investment, unique features, or strong differentiations from other products.
These types of products can help you avoid direct competition and create a niche market for yourself.
When the product category you’re eyeing for selling is dominated by large brands, you will be at a disadvantage.
If you still want to compete against such dominant brands, ensure that a solid marketing strategy, good product, and exceptional customer service are in place.
Look at the number of sellers selling the product before selecting – it can indicate the level of competition and the demand for that product.
Generally, if there are too many sellers for a product, it means that the product is highly competitive, and you may have difficulty breaking into the market.
On the other hand, if fewer sellers exist in the category, it would mean less competition and niche products.
After evaluating a product’s demand, competition, and customers, you need to ensure that the product you sell will be profitable.
Here are some factors to gauge profitability for a product:
Products of $20-$50 lie in the impulse buying decision range. The higher the price tag, the more a consumer thinks about spending the amount.
They’ll do more research into whether or not they need the product, while with less expensive items, they won’t spend as much time comparing them to others.
However, if you go extreme on both ends, it also becomes a problem. For example, a costly product makes it difficult for a shopper to get started. And If the price is low, shoppers associate it with cheap quality.
On that note, it’s important to get your pricing right.
Sellers often get into a black hole when finding the right pricing strategy for their products.
Your product price should cover your costs, add profits, and address the customer’s perceived value.
Look for small and lightweight products, as these types of products can keep your shipping and storage fees down, which usually are based on the weights and dimensions of the product.
For example, it would be much cheaper to source and sell a small product, such as a necklace, versus wooden furniture. Wooden furniture might be in high demand, but the logistics cost will be humongous, which can eat up your profit margin.
Tip: Don’t go for too light or heavy fragile products, like glass or electronics. Pick something sturdy and easy to ship.
The ultimate goal of your business is profit. So, whenever you conduct product research, calculate the gross profit margin to understand the earning potential of the product.
Depending on the platform or marketplace, you need to factor in multiple costs such as subscription fees, selling fees, advertising fees, storage fees, shipping fees, etc.
There is no particular profit margin to aim for, as it’s subjective. But we recommend going for at least a 25-35% gross margin.
This will leave you with enough room for your advertising budget to stand out from the competition.
You can easily find the profit margin of a product by using the SellerApp FBA calculator.
Just go to the product listing on Amazon, open the SellerApp FBA Calculator tool, and provide the following information:
And the tool will automatically calculate the profit margin for you.
Here is a quick checklist to help you easily pick the right product to sell:
Now that you’ve learned the factors to look at when selecting a product let’s look at some ways to discover good product ideas for your e-commerce business.
Amazon is the first place you should research to identify good product ideas. Amazon has different categories like Bestseller lists, Movers and Shakers, Most Wished For, and Gift Ideas section, all of which can offer countless product ideas to you.
First, visit Amazon’s Best Sellers page. Here, you’ll find the best-selling products for each category. Don’t stop your research in the top category. Go deep into subcategories to identify unique product ideas.
You can also look at New Releases, Movers & Shakers, Most Wished For, and Gift Ideas tabs. These products will have high demand but less competition over the best-selling products.
Let’s say in the “New Releases” tab, you go for “Sports & Outdoors.” Now, this is way too broad a subcategory to identify product ideas. But you can go deep into subcategories to identify product ideas that you’ve never thought of.
For example, Sports & Outdoors > Exercise & Fitness > Cardio Training > Exercise Bikes.
Under the “Exercise Bikes” subcategory, you can look through many product types.
If you’re already an Amazon seller, the best and easy way to do product research is by simply asking your suppliers what products are trending and selling like hot cake now.
Your supplier should already have the information and might happily give it to you if you have a good relationship with them.
You can also make it worthwhile for the suppliers by giving them bulk orders for the new products.
Even if your target marketplace is Amazon, other marketplaces like Walmart, eBay, and AliExpress can still be valuable sources for identifying product ideas.
Usually, if one product sells well on other marketplaces, it’s more likely to sell well on Amazon too.
So, head over to other marketplaces like eBay or Walmart and view all the trending products in your favorite categories.
Not all products will fit your criteria, but you’ll get a rough idea of the product in demand and brainstorm from there to find a product that makes the perfect sense to you.
Visiting your local retail stores can also be a great way to discover new product ideas to sell on Amazon.
These local stores often sell unique products that are not available online. These shops also serve as a real-time platform for identifying current trends and conducting price comparisons, which can provide you an edge over the competition.
Additionally, physical retail stores allow you to do a detailed quality assessment and help you make more informed decisions about the products to sell.
If you’re already an Amazon seller, use the Amazo Product Opportunity Explorer tool on Seller Central to find new products.
Log in to your Seller Central account, and navigate to Growth → Product Opportunity Explorer.
Use the search box to enter a broad keyword related to the product or niche you’re interested in.
Alternatively, you can browse niches by category or use the example niche recommendations based on your current product offerings.
The tool will display relevant niches, associated search terms, and key metrics such as customer needs, top search terms, search volume, units sold, average price, and price range.
You can use these metrics to filter and narrow down your search to avoid low-quality products.
Not just that, utilize the Customer Review Insights section to identify improvement opportunities within a product and niche. It shows you all the positive and negative reviews for both niche and product levels.
With this Product Opportunity Explorer tool, you can narrow down profitable product ideas backed by data and are less likely to fail.
SellerApp also offers a comprehensive Product Research tool that helps you research products on Amazon.
Just log in to the SellerApp Dashboard, go to the Product Research tool, and search with a seed keyword. The tool then gives you a list of products based on your search query.
You can filter the keywords based on multiple metrics to narrow your search to the most relevant products.
There you have it, a comprehensive checklist for Amazon Product Research!
As you can see, there are many aspects to consider to conduct thorough FBA product research, Following the steps given in this post will definitely help you get started with your Amazon product analysis.
However, if you’re looking for an efficient way to accelerate progress, consider signing up on SellerApp Dashboard. It gives you free access to invaluable features such as product analysis and tracking to help you find the best-selling products for your next launch.
Leave a comment below and let us know what Amazon product research strategies you use in your business!
Victorial
January 26, 2019Thank you for explaining best ways of product research
Awesome post @Ankitha
Breann
February 4, 2019Thank you for explaining about product research
Greg
June 13, 2019i recommend this
Launa Dawn
October 28, 2020Thanks for giving your ideas.
john
May 16, 2021Very useful information for amazon sellers.
Fedurm
May 18, 2021I like this blog!! It’s a masterpiece for amazon sellers.
Dagonet
January 10, 2023SellerApp blogs are a wealth of knowledge for sellers. You cover everything from product research to marketing, and I’ve been able to improve my sales as a result.
Arishekar N
January 16, 2023Thank you.
Amado
January 11, 2023I’ve been able to improve my product research and sourcing thanks to the information provided in SellerApp blogs. They have really helped me find profitable products to sell.
Arishekar N
January 16, 2023Glad you liked.