Whatsup guys! My last product launch case study was very well received. So I have decided to do another one. Only this time I will cover the full process! So I will show you exactly how I:
- Find a new product.
- Manufacture & ship it.
- Launch & promote it.
Just like the last case study, I will not reveal my product. But I will show you everything else. Hopefully this will be a great learning experience for new & established sellers.
So let’s get started right away. What I have done so far:
I have found a great product with the Jungle Scout Web App! I spend about a week doing product research and I am very happy with this product I found. Here are the stats:
If you have never used Jungle Scout before this might be a bit overwhelming. So let me break it down for you. When I do my product research I want a potential product to fulfil these requirements:
- Minimum price: minimum $15.
- High demand: minimum $3,000 per month.
- Low competition
- Healthy profit margin
- Easy to manufacture
- Not seasonal.
So right away I can see in the Jungle Scout screen that this product fulfils the first 3 requirements:
The average price is around $29,99.
Very high. Most competitors have more than $10k revenue per month. Average is around $20k per month.
About half of the competitors have less than 50 reviews! The #1 only has 25 reviews, and #2 only 14!So yeah, everything looks very good so far. Now lets check out the other requirements:
4). Profit margin
I did a quick price check on Alibaba and the product can be purchased for around $5. I roughly estimate that the shipping will be around a $1. So my landed cost will be around $6. I will then use the FBA fee calculator to see how much profit I can make on this product:
If I would price this product around my competitors ( $29,99 ) I would make a net profit of $12,79!!! So around a 200% ROI on my $6 investment. So far everything is looking good!
5). Easy to manufacture
Not really. This might be the only problem with this product. It consists of 2 parts. And 1 part is made from a material that is kinda hard to manufacture. I have never manufactured a product from this material and I know nothing about it. I can imagine I can easily get scammed, where I would pay for the premium quality material and end up receiving low-end material. This happened to me before.
So I already did a bunch of research on this. I spend some time reading about the different type of materials I can use for this. What materials my competitors are using. Checking the reviews and finding out what customers have to say about the different types of material. I feel a little bit better prepared right now, but this is still an issue that I should focus on when I’m in the manufacturing phase.
This product is not seasonal. Of course I still like to look at the statistics and find out if there is actually a trend in the market. So I pulled up the Historical Sales with Jungle Scout:
So this is the history of sales for the #1 seller in this niche. The guy that does $87k a month. As you can see there is a clear upwards trend here. Very good to see this!
All the competitors are selling the product in the same color: Black. So a very easy method I can use to differentiate myself can be to start selling the product in a different color. This way my product will definitely stand out in the search results. I will have to discuss with suppliers if this is possible and how much the extra cost will be. But this is definitely a nice little bonus!
So let’s sum it up:
|Requirement||My product||Fits requirement|
|Profit Margin||+ $5||$12||Yes!|
|Easy to manufacture||Yes||No||No!|
I am very happy I found this product. Like I said, the major issue might be a quality control issue. Since it is not very easy to manufacture the product. And I don’t want to receive a low-quality product, as this will result in a low review rating. But yeah, I am willing to take the gamble on this product.
Next up I will contact different supplier, request samples, negotiate with them.
Keep me updated!
Leave your email below and I will let you know when I post part 2 of this case study!