Whether you are a seller on Amazon or looking to start out in the business, there are quite a few things you must learn about the marketplace in order to be successful. Otherwise you are just going to flounder around and not be able to make a profit. The best thing you can do to ensure success as an Amazon seller is product research; it is something you must do to discover what products are going to give you the most revenue.
Amazon product research is a time-consuming process. It may take you a month of research to hone in on a product that is going to make you profit, but it is well worth the effort. You will need to be methodical in your product research, but there are many tools available to help you along with some tips and tricks you can follow to ensure you succeed at finding the right products to sell on Amazon.
Amazon: “The Everything Store”
Amazon is a giant with a massive marketplace of items; you can find almost anything on Amazon these days. In the US, Amazon has 49% of the eCommerce market as of 2018, and 5% of all retail spend, which gives it a huge dominance within the US, and large parts of the world.
To keep everything in order, Amazon has implemented massive systems to ensure that products can be searched for effectively, and places them in order on search results based on product and seller rankings to ensure the best possible experience for the consumers. This means, you need to put in the proper Amazon product research to ensure you not only sell a good quality product, but also be able to garner enough reviews to show up in the first page of results.
Of course, not only do you have to compete with other third-party sellers on Amazon, but depending on the category of product, you may have to compete with Amazon’s own products as well. Product research is key to ensure you know what categories are high sellers, what type of competition is in that category, and if there are niche categories you can take advantage of.
Amazon Product Research – What Type of Seller Do You Want to Be?
When you are looking to sell through Amazon, particularly as a fulfilled by Amazon (FBA) seller, before you can get to the product research you must know what kind of seller you are on Amazon: retail arbitrage, reseller, or private label. Depending on the type of seller, you will need to focus your Amazon product research at different priorities.
As a retail arbitrage seller, you will have the least amount of initial investment required. You will be purchasing products from retail stores in bulk, shipping them to an FBA warehouse, then reselling them on Amazon for a profit.
Similarly, resellers will buy items in bulk and resell them on Amazon, but they will often use sellers that will sell products in bulk, often specifically for people and businesses to resell. Resellers are one of the biggest forms of competition on the Amazon marketplace and are important to keeping prices down and offering shoppers more buying options.
Finally, private labelers work directly with manufacturers and put their own company label on the products. Private labelers can range from just applying their own logo to a product, to using product research to work with the manufacturers to improve a product. This gives the most flexibility out of all the seller types, but also involves the most Amazon product research, and the highest barrier of entry into the marketplace.
Choosing the Type of Product You Want to Sell
Once you have chosen the type of seller you want to be, you can move onto the next step of product research: deciding what type of product you want to sell.
As an Amazon FBA seller, you most likely want to focus on impulse buy items, which often will range from $15 – $200. Above that amount, people are less likely to buy a product from a relatively unknown brand. When selling or reselling products, the more simple the product the better it is as well; an item that is made of a single material is much easier to deal with in terms of customer service and product quality than an electronic product, and a heavy product will be more costly for shipping and cut into your profit margins.
Once you have decided on a price range and product type, you must search through Amazon, either through the website or an Amazon product research tool, and check on the competition and demand. You may want to avoid products that have a lot of competition.
Low demand niche products may not get you enough monthly revenue to make it worth investing in when compared to a product in high demand. Seasonality can influence demand heavily as well; summer pool toys won’t sell well at Christmas and Christmas items don’t sell well in June.
If you are deciding to be a private labeler, you may end up with extra costs that are going to cut into your profit margins, so you need to research what it’s going to cost for product testing, photography, promotion and development.
Data Is Key to Making the Right Choice
The data you gain from your product research is key to give you the edge in picking the right product to sell to make your profit. There are many tools available to help you with your Amazon product research, and it would be in your best interest to use them to give you the most advantage. If you are still unsure about the type of product you want to purchase, there are a few places you can look to jump start your inspiration:
● Physical retail locations
● Amazon best sellers lists
● Amazon frontpage
● Pinterest or similar sites
● Trends on other eCommerce sites
● “Customers Also Bought” recommendations.
Finding a Supplier
Once you have completed your product research and have decided what you want to sell, then you can reach out to manufacturers and suppliers to get the ball rolling. By this point you should know what product you want, and even what kind of changes you want to make to the product if you are going the private label route. Take advantage of any opportunities you have, source from China, or sourced locally, whichever is best for you.
Knowledge is Power
Through Amazon product research, you gain the advantage of understanding how products are currently performing and which markets you can get yourself into easily for making a profit. Take your time with the Amazon product research. If it takes a month to find the right product, then that is a month well spent. However, don’t skip a good opportunity when it comes along in your search for the perfect product.