In a previous post, Spencer discussed how to make money on Amazon. In this post, I'll go in depth on what to sell on the platform through Amazon FBA.
Fulfillment by Amazon is an initiative by the world's largest online selling marketplace to help businesses store their products at fulfillment centers. Amazon is also be responsible for packing and shipping the products to buyers.
By signing up for an account, you place your delivery process and customer service support in the hands of Amazon. Doing so allows you to focus on your business instead of worrying about shipments and customer relations.
More importantly, you get to reach out to millions of users shopping on Amazon – 244 million active users and counting, to be exact. Making your products searchable on Amazon increases your chances of getting found by your audience and generating a sale.
Now, you might be thinking that Amazon FBA is not for you because you don't have any products to sell. However, you don't need to have a product on hand just yet. This post will help you determine what to sell on Amazon and the steps you need to take to bring your ideas to life and into your customer's hands.
That said, we won't be dealing with retail arbitrage in this post. We aren't looking for retail products to be sold on Amazon at marked-up prices. While people have found success with retail arbitrage on Amazon, there is a threshold in earning from this method. Not to mention, replenishing your product stock on Amazon is a time-consuming process.
The disadvantages of retail arbitrage are what makes Amazon FBA a better option. You will have a better earnings potential by developing the products from scratch.
WHAT TO SELL ON AMAZON
What you should do now is find a product that you can private label. China is the best place to search for products due to low production costs, which yields higher profit once sold.
More importantly, you need to figure out what to sell on Amazon, which is the most crucial component of your Amazon FBA strategy.
By choosing the right product, you can make a nice profit of up to $60,000 per month (or more). On the other hand, selecting the wrong product to sell won't let you earn enough money. It won't matter if you picked a high-quality product from a cheap supplier and optimized its listing on Amazon. What is important is whether or not people will buy it from you.
Therefore, this post is about the process of researching for a product that would sell through Amazon FBA. I will discuss the factors that you need to consider to determine the profitability of the product. I will also provide case studies that put the tips into actual practice so you can emulate them when you start conducting your product research.
1. CHOOSE A PRODUCT SOLD BETWEEN $10-100
This is not a hard set rule. However, if you are just getting started, the ideal price range of products to consider selling is under $100. Many sellers do well with higher priced products, and if you have the higher capital that is required (typically), then by all means go for it.
Ideally, choosing a more expensive product ($100 and higher) would be beneficial for you due to higher profit margins.
However, putting yourself in the shoes of customers, are you willing to pay $100 for a product immediately?
Unless you have all the necessary information about the product, you need to learn more about the product by reading reviews from other Amazon users. Paying for the $100 product with little information about it is not something all people are willing to do.
Therefore, you will probably have to search Google and Youtube to get a better understanding of how the product works. All this research should help you decide whether to buy the product or not.
However, imagine if you were to buy a product that ranges from $10-50. Would you spend the same effort researching it?
The cheaper the product is, the less likely customers will find more information about it. Moreover, consumers are more willing to purchase the product impulsively, given the low price point. As long as it addresses their needs, then there's a big chance they will buy the product then and there.
When choosing a product, look for a product that costs $10-50 to sell and focus on selling it in volume.
Also, since you will be buying the products from China, you need to consider the cost of each part required to assemble your product, especially if it's an intricate piece. Delivering items to be sold for more than $50 to your doorstep could get expensive. If you're still new to Amazon FBA, then it is best to settle with simple and cheaper items to private label for now.
2. CHOOSE A PRODUCT WITH A GOOD BESTSELLER RANK
The performance of your product on Amazon depends on the market. If people don't have any use for your product, then nobody will buy it. Competition, in this case, is good because it is an indication that there's money to be made with your product based on how well similar products are doing.
A metric that you can refer to in choosing a product to sell on Amazon is its bestsellers rank (BSR).
If similar products are ranking on top of the list, it means that there's demand for them. Choosing products identical to the ones found in the list allows you to position your business on par with these bestsellers. As a result, you can attract the target market of bestselling products and get them to buy from you instead.
There are varying opinions regarding the BSR of a product that you should use. It is best to choose a product with competitors that have a BSR of 5,000 or less. The more competitors with the same or higher BSR, the better.
Also, the BSR I am referring to here is the main category. In the image above, the main category (Pet Supplies) hosts the product (under Cats > Little & Housebreaking > Little category). While the subcategory BSR of the product is impressive, its performance on the main category is what matters more. Since it will be competing against other pet supplies products, a high BSR means that it is an in-demand product.
Want a shortcut? I recommend using Jungle Scout to automatically pull the Amazon bestseller ranks AND displaying the estimated monthly revenue for each product.
3. NO RECOGNIZABLE BRAND IN THE MARKET
The advantage that well-established brands have over non-brands is their track record. Assuming that the brand is known for selling high-quality products, the market will associate these qualities with the product they are selling on Amazon. Going up against Fujifilm for photography-related products, for example, is a bad idea.
Therefore, you need to sell a product without a distinct brand to compete against. You want to sell a product in a market that's on level playing field. Capitalizing on a market filled with no-name brands positions yourself as a premium and go-to brand for your niche product, if done correctly.
Even if you haven't heard of the competing brand, you should at least check to see if it has a website, social media followers, and other digital footprints. This gives you a better idea of what you are up against, should you decide on entering the market with your product.
4. PRODUCTS WITH LESS THAN 50 REVIEWS
Customer reviews play a critical role in determining which products appear on top of Amazon search queries. The higher the number of reviews (regardless of opinion) of a product, the greater its chances of appearing on the first page of search results.
If the keyword for your product returns results of products with over 50 reviews each, then you might want to consider a different product. As much as possible, you want your path to success to be as easy as possible. Products with lots of reviews will obstruct your path to making money through Amazon FBA.
You should target a product whose keyword phrase returns a result of at least two products with less than 50 reviews. Their lack of reviews give you a chance to take their spots on the first page. By positioning yourself in this spot on the search query for your keyword, you make your product page more visible to casual users, thus leading to higher number of clicks to view your page.
5. CHOOSE A LIGHTWEIGHT PRODUCT
Again, this is not a hard-set rule. However, when you are just starting out the logistics and shipping costs are much easier if you are not selling an oversized item. But again, this is an ideal situation. If you find what you think is a winning product that just happens to be oversized, don't let this rule stop you…go for it!
A lot of the shipping cost has to do with the weight of your product. The heavier it is, the more expensive the shipping will be.
Another factor that affects product weight is the dimensions. Amazon identifies a product into different tiers, each of which considers weight and dimensions.
For more information about product size tiers, click here.
Also, each tier uses specific packaging materials with weights different than the other. The heavier the product, the heavier the packaging weight will be to keep the product safe and secure.
Ideally, you want to sell a product on Amazon that meets the criteria of Small Standard-Size tier to keep shipping costs low. However, the important thing is that the weight of the product does not distract customers from purchasing it instead of the competition.
If you already have a product in mind, find similar items on Amazon and the compare all their weights. Doing so will give you a better idea of how your product will cost once the weight and packaging are factored into the price.
6. HIGHER MARGINS ARE BETTER
Once you have a product that passes all the requirements above, you can now find suppliers who will provide you the product that you will private label at low costs compared to what you can sell it for (margin).
As mentioned, China is the first thing that people search for when it comes to affordable suppliers. A quick check on Alibaba for the product you want to sell will reveal to you a slew of results to choose from.
Open the pages of products you're interested in purchasing and compare their prices with the ones on sale at Amazon. Ideally, you want to find a product that costs at least 75% less than the retail price on Amazon.
If not, choose the product that will provide you with the highest profit margin. Doing so allows you to have a cushion against the costs you will incur on shipping and miscellaneous fees from Amazon.
7. FINDING A HIGHLY SEARCHED AMAZON KEYWORD
Similar to SEO, you need to find the best keyword for your product to maximize your earnings potential. Finding a relevant keyword with a high search volume on Amazon is your top priority. Unless they know the exact name of what you're selling on Amazon, users can only see your product if they type in the keyword related to your product. By targeting the most searched keywords in the platform, you can increase your visibility to your target market in the hopes of getting them to buy your product.
There are a couple of tools that can unearth the monthly Amazon search volume for related keywords.
- Keyword Tool – The tool helps you find keyword suggestions that you should consider to use for optimizing your product page.
- Jungle Scout – The Amazon product research tool offers a comprehensive keyword feature that shows the different products which appear on search results. Each product also reveals the BSR, estimated sales, estimated revenues, and more.
- Merchant Words – The tool contains over 60 million keywords that Amazon users enter on the search bar to shop. It also shows the search volume for each keyword to help you decide which ones to optimize for.
Aside from these tools, Long Tail Pro allows you to find the average Amazon reviews for each keyword. As mentioned, you should choose a product with the least reviews as possible so you could get indexed on the first page of search results. By finding the least number of reviews for related keywords in conjunction with other data available from the tools mentioned above, you can determine which ones you should focus on.
8. COMPETITOR PAGES NOT OPTIMIZED
Aside from customer reviews, there are other factors considered in figuring out which pages that rank on the first page of Amazon search for a keyword. In short, the page should provide all the information necessary for users to make an informed decision about the product. Amazon has a page that details the best practices of developing your product pages to make them informative to users.
Frequently, the ones appearing on the first page of Amazon search have optimized product pages. However, there are pages whose elements still need improvement. Below are the most common mistakes that prevent product pages from performing well:
- Few or low-quality product images
- Non-descriptive product title
- Limited description
- Unhelpful bullet points
If you can find pages that commit these mistakes, then it is an opportunity for you to optimize your pages based on the weaknesses of the other ones ranking on the first page. For example, if one of the product pages have low-resolution images, then make your images high-quality.
CASE STUDIES
Now that we've discussed the things about what to sell on Amazon, it's time to see these practices in action from the different case studies featured below.
MANNY COATS – $75,762.35 IN FIRST MONTH
Manny shares his impressive run selling private label products on Amazon in just a month. He details in this post and podcast the process of researching and selling the three products. Manny mentions the work that was put in launching the products (12 to 16 hours of work from Monday to Sunday). Not to mention, he also ran into some problems such as losing stickers to close the boxes and Amazon losing one of his shipments. Nonetheless, the results more than compensate for the work he's put into this successful project.
Key takeaway: Manny chose a product in anticipation of the holiday season to maximize sales. He was selling a product under the toys category. The stock got sold out before Christmas, which is an encouraging sign. By choosing a product to sell based on trends and season, Manny was able to make the most out of his Amazon FBA campaign.
SPENCER HAWS – $60,000+/MONTH
Spencer has no experience selling physical products on Amazon less than 2 years ago. However, upon reading about the subject, he saw the potential of earning money from this strategy and had to try it himself. As documented in this post, Spencer was able to quickly ramp up his earnings to over $4,000 in just his first month.
Since then Spencer had launched several new products and has discovered that focusing on more unique products is the way to go. By focusing on more unique ideas, Spencer has been able to sell more than $60,000 per month for several months during 2016. (And of course, December was even more than that)
Key takeaway: Trying to figure out how you can be unique in the marketplace can be important. Don't just try to launch exact replicas of everyone elses products. Even a small tweak to a product can help you stand out and make more sales.
SCOTT VOELKER – $35,000+/MONTH
One person that has encouraged lots of people to pursue selling private label products on Amazon is Scott Voelker of The Amazing Seller. Spencer did a podcast interview with him to discuss his strategies.
Before venturing into the world of Amazon FBA, Scott owned a very profitable photography studio. He wanted to build a business that didn't take much of his time, so he turned to Amazon for help. On the first month of selling products on Amazon, he earned $4,000, which wasn't bad. However, after nine months of refining his processes, he made a solid five-figure income monthly and never looked back.
Key takeaway: Scott admits that there's no shortcut to finding that product that would sell like hotcakes on Amazon. However, he emphasizes the importance of depth when it comes to choosing your business. What Scott means is that you have to pick a product on Amazon in which you can still make a substantial amount of sales in the position you can get your product page within Amazon search. By approaching your product research in a strategic manner, you can unlock your true earnings potential in Amazon FBA.
DAVID BRYANT – $1 MILLION/YEAR
Another person that has done well selling physical products is David Bryant. Unlike other so-called private label product seller gurus, David is far ahead of the pack as he discusses in a podcast Spencer did with him about the practices of importing products from China to be sold on Amazon. Aside from the usual route of searching Alibaba for the supplier, he recommends getting a sourcing agent. This person is responsible for finding you the best products to be sold for you.
Key takeaway: Unlike others, David believes that researching can help unearth the best product that you should sell, but he is an advocate of going with your gut when making decisions. Also, he suggests that people should start selling a product that they are passionate about. Since they are fully informed about the product, it will be much easier for them to sell the product to their audience.
Another tip he shares is choosing a product that has lots of potential for add-ons. For example, if you are selling mountain climbing shoes, you can branch out to selling related products like harnesses, ropes, and others.
WRAPPING IT UP
Finding a type of product to sell is critical to your success for Amazon FBA. You not only need to be passionate about the product but need to put the work in to prove that the product will sell in the market.
The tips above should help guide you in choosing which product to go with. The research process is exhaustive and time-consuming, but it is a necessary step to make sure that you are doing everything correctly. At the same time, your research should provide you all the information you need to know to make it easier for you to succeed.
I also suggest that you read up on the case studies featured above to help you understand the level of commitment you should have to make the same amount of money, if not more!
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