Today i’m going to show you how to do Amazon FBA product research.
For any of you that haven’t been here before, my name is Nick (that’s me above) and I’ve been a full time amazon seller for some time now.
Amazon product research is arguably the most important part of the process…
Ultimately your success on the Amazon platform will rest in the hands of your product choices.
So… Let’s get into it.
What Are The Best Items To Sell on Amazon FBA?
There are lots of different ways to do your amazon product research…
Over the years our methods have changed drastically.
There are lots of different tools you can use to improve the process dramatically.
Now, i’m not saying you can’t find golden product ideas using the good old fashioned manual scan….
Of course you can! You’ll just need a little more time on your hands.
To find the product i’m using in this case study, i used my Helium 10 Tool.
I’ve put together the following Amazon product research checklist to help you with the process.
The Amazon FBA Product Research Checklist
This is the easiest way to demonstrate how i think when i’m looking at potential products ideas.
If you’re an amazon seller with experience you may decide to adjust this criteria (depending on your skill set).
I’d recommend you use this checklist as a guideline for your research process.
Sales Price: A Rule Of Thirds
I usually will only look at products that i can sell for a minimum of $15.
I do this to protect the longevity of my business.
For my business i like to use a rule of thirds.
1/3 – Is going to go into product manufacturing and freight
1/3 – Will be taken by Amazon Fees (The Amount Category dependent)
1/3 – Will be left for me (Profit)
With this in mind a $15 product should return a $5 per order profit…
Look at it like this…
If i make $5 profit per order, selling 1000 units a month will make me $5000 in profit…
If i make $3 profit per order, i’d need to sell 1,666 units to make the same $5000 in profit…
Anyway… I’ve found that this is a good rule of thumb to work with.
If you are starting out with a limited amount of capital… sticking nearer to the $15 mark may be a sensible idea.
Generally speaking, the more expensive your product is, the higher your associated costs will be.
Product Quality/Production Cost
As mentioned above, i don’t want my production and freight cost to surpass 1/3 (33%) of the sale price.
At $15 this means we will have roughly $5 to spend on production and freight.
Spending less than $5 will of course mean that we have more profit… BUT
This isn’t always the best rule to follow.
If your product quality suffers you will not last on the Amazon platform.
The customer experience is THE most important aspect for Amazon’s search engine.
If the quality is poor, the customer will be unhappy and your review level will suffer as a result.
Look for a happy medium, ALWAYS request samples and have the supplier mock up final versions of your product…
Put yourself in the customers shoes, would you be happy with the product?
This will vary from person to person, it depends on your business goals.
Typically we aim to make at least $1500 profit a month on any individual product…
Based on the third rule i discussed in the previous section this means we need to make sure we are finding products that are doing at least $4500 in revenue.
So… how do you find these products?
Don’t worry… I’m going to walk you through the entire process i use shortly.
This is a really obvious one i know but it’s worth mentioning…
The aim of the game is to find a niche with a limited level of quality competition.
Before i jump into any niche i will take the time to analyze the competition…
With the right tools you can work out exactly where competitors are getting their sales from.
Again, i’m going to show you how to do this… For us this is THE most important part of any product launch / rank boost.
So how do you know if a niche is too competitive?
I analyze the competing lists with these rules…
Product Review Levels
When looking at a potential product, we will look at the top three best selling competitors.
For us the top three competing listings should have less than 100 reviews…
Honestly, there is so much opportunity on amazon, you don’t have to sell in saturated niches.
So.. Why do we use the 100 review rule?
Put yourself in the shoes of your customer, think about your own behavior when you’re shopping on amazon…
What do you look for?
We are all looking for the best indication of trust and quality..
Let’s say you search for a product and find two options…
One with 500+ five star reviews and one with 10 five star reviews, which one are you naturally drawn too?
Probably the one with more reviews right?
Yer, me too…
So give yourself the best chance and if you are only just starting out look for lower barriers to entry.
If you offer a good product with great customer service, it won’t take you long to surpass 50 reviews.
Amazon Listing Images
Your listing images should be considered as prime real estate…
I know a savvy amazon seller when i see one 😉
I’ll feel encouraged if the best sellers have poor quality listings…
Some sellers only include 2 or 3 rubbish looking images.
I know that i can immediately offer more than sellers like this, poor images are a big plus in my books.
Your product images give you a chance to TELL your customer why they should purchase from you… and not your competitor.
We follow a strict formula when it comes to our images (Watch the video below – It’s not too long i promise)
Listing Optimization – Do they understand keyword data?
If a competitor has a very basic title along with bullet points.. this is another plus.
Amazon is a very sophisticated search engine…
The quality of your listing will usually determine the success of your keyword ranking performance.
Before you create your listing, i’d encourage you to carry out in depth keyword research.
We do this for every single product we sell…
Watch the video below if you’d like to learn to do this for yourself.
These are the three main area’s i will analyze when i’m measuring the competition levels of any niche.
Product Quality – Can You Offer Something Better?
This is an obvious point, but i think about product quality in a particular way.
If you are thinking about selling a particular product, i’d encourage you to analyze the reviews of your competitors.
You can do this manually if you like but to save time i use helium 10’s review downloader.
Let’s say you find a niche and the best sellers have an average rating of 4 stars and below…
This can provide a real opportunity for you as a seller.
If you’ve read a lot of my content you’ll have heard me talk about this before…
If the average rating is 4 stars and below you have the opportunity to provide a better product solution.
All you need to do is analyze the negative reviews and look to see what people DON’T like about the product.
If you can then find a creative way to solve this reoccurring issue, you may have found a home-run of a product.
Ask yourself the following:
- Can you offer more in terms of product quantity (Two pack etc)?
- Could you improve on the product quality?
- Can you solve the issues your competitors customers are facing?
- Could you offer a lower price?
- Can you create a better listing?
- Would it take you long to gain more reviews?
If the answer to the majority of these questions is a Yes, you might have found a golden product opportunity.
Manufacturing – Is It Going To Be Straight Forward?
If you have limited experience with manufacturing i’d encourage you to find a product that’s easy to make.
Without the experience i’d avoid electronics and products with moving parts.
I’d also avoid products that have fragile or delicate parts, if you are buying from the far east your products have a LONG way to travel.
Look for products that are simple and easy to make, this will limit your risk.
Certification – Can You Afford To Ignore This Step?
This is an area i think a lot of sellers have left themselves vulnerable…
If you are building a long term business this should be an important part of your amazon fba product research!
It is quite a complicated subject but with the right advice it doesn’t have to be difficult.
Think of it this way…
If Amazon decide to request your product certification and you don’t have the correct documents…
Your listing is going to be closed pretty quickly.
Certification requirements will depend entirely on the product you wish to sell AND the marketplace you want to sell within.
Don’t let product certification overwhelm you, just take the time to do your research online.
Here is a website I’ve used as a useful learning resource over the years: China Importal
Their blog is especially useful, the site is run by a couple of very knowledgeable people, it’s worth bookmarking.
Anyway, let me give you some actionable tips…
The aim of this article is to help you understand how to do Amazon FBA product research for yourself.
Let me know below if I’ve achieved this 😉
Tools to help with Amazon Product Research
Ok, so now i hope you are thinking about Amazon FBA product research in the same way i do.
You should use the above checklist as a reference point for any new product idea.
Let me show you how you can put all of this into practice…
Now, i will say that you don’t have to use software BUT if you want to build a full time amazon business my guess is you’ll need to at some point.
When it comes to product research i normally put aside 4 – 6 weeks, this way you are taking your time and not jumping into an EMOTIONAL decision.
You need to remove all emotion from the research process.
So, as you may already know i currently use Helium 10 for the majority of my product research.
Helium 10 has a direct line into Amazon, their database actually has more Amazon products than you can find on the amazon site itself…
I know this sounds crazy but…
It’s because they continue to display products that have been made unavailable on Amazon.
- Categories: As mentioned Helium 10 holds A LOT of data, focus in on one category per search so you can really drill down on your results.
- Monthly Rev: I’ve stuck with our minimum of $4500
- Price Point: Between $15 – $18
- Reviews: As mentioned earlier I’ve stuck to the 100 review rule.
These filters returned a couple of pages of results.
It’s then up to you to sift through the data to find products that feel right.
**Additional Tip: Before you decide on a product, google the brand name to make sure you aren’t competing with a large brand with a HUGE external marketing budget
After a little bit of scrolling… I seem to have found an interesting product…
Magnetic Board Markers
This could be a very good product.
1. Profit Margin – $7.13 Per Unit
Let’s look at our potential profit margin.
- Price on Amazon – $16.98
- Amazon fees: $5.85
- Est Production cost (Inc Shipping): $4.00
- Profit Margin: $7.13 per unit
In order for me to estimate the production costs i have gone onto Alibaba to find a supplier that offers this product.
As you will see, our product example is a 24 pack – I’ve assumed we will pay $0.10 per Eraser so 24 x $0.10 = $2.40
For shipping I’ve assumed $1.00 per unit, I’ve also added on $0.60 per unit to account for a custom packaging design…
Total production cost: $4.00 per unit (These are rough figures to give you an idea! Don’t quote me on this)
To calculate the Amazon fee’s we used Amazons free fee calculator…
If you need help understanding Amazon’s fee’s i have written another article explaining it all in detail (link below)
Read here: Amazon Fees For Sellers
2. What Does The Demand Look Like? (VERY GOOD)
As mentioned earlier our target revenue has to be $4500 minimum based on our $1500 Monthly profit expectations.
Your’s doesn’t need to be this high! It’s just how we roll and bare in mind we have a lot of experience.
Anyway…. This surpasses that figure with a current level of $8405.10 per month.
3. Competition Levels – (GOOD)
This particular seller only has 43 reviews + Their review rating is 3.8 Stars (This is very good).
If i was to go further with this product, i’d dive into the negative reviews of this and similar products to see if i could come up with a better product solution for any reoccurring issues.
4. Manufacturing & Certification
I think this product would be pretty easy to private label – It isn’t electric or too complicated.
Certification and product safety is another matter…
I’d have to make sure that i included all relevant safety labels on the packaging, whilst also ensuring i had the relevant documentation from the supplier.
I’d also request an MSDS from the supplier so i could double check that all of the ingredients were safe for that marketplace.
5. Is This A Good Product?
My initial research would say: Yes
I’d definitely add it to my product shortlist…
Before i decide on any product, i like to find out which keywords my competitors are getting their sales from…
Using Helium 10 you can find out exactly which search terms are driving the traffic and therefore the sales.
Watch the video below if you’d like to learn how to do this yourself!
Pretty Easy Isn’t It! Now It’s Your Turn!
Like i said earlier, i’d encourage you to use this checklist as a reference for your amazon fba product research…
It really doesn’t have to be difficult you just need to learn how to read the data.
Now, you can of course follow the manual method and use the above criteria to sort through products….
HOWEVER if you are serious about building an amazon business, why wouldn’t you take every possible advantage available to you?
I’d encourage you to try out Helium 10 – They offer a real advantage for amazon sellers.
If you’d like to give it a go why not try it out for a month half price?
To get 50% off your first month use: EBOSS50 with the link below.
*If you decide to use this i will make a small commission, this doesn’t make it more expensive for you, it actually makes it cheaper!
If you are at this point… well done!
BUT the real work starts now…
If you decide to try this method out, let me know how you get on in the comments below.
I really hope this helps you with your amazon fba product research!
More from me soon,