What are the Best Items to Sell on Amazon FBA?
There are loads of ways to do product research, but I have used my Helium 10 Tool to find the product I am using in the case study. In the post we will split up my Amazon Product Research Strategy into the following points:
1). Amazon Product Checklist
I have made a checklist of all the criteria I want a new product to have. This is simply the checklist I use. If you are an experienced seller you don’t have to follow this but if you are just starting out this is a great guideline.
1. Sales Price: $15 and above
I always look for products that have a sales price of at least $15. The reason for this is that you can take the general rule of thumb with private label products that:
33% goes to production & shipping.
33% goes to Amazon fees.
33% goes into your pocket as profit.
So if you have a $15 product you can expect a $5 profit per order, which is very healthy. Anything under $15 sales price and your margin will drop very quickly.
2. Healthy profit margin / Profitability
Previously we have discussed that you want to aim for a 33% production cost + shipping, 33% Amazon fees & 33% profit ratio. Of course the higher the profit margin the better but if you can find a product with this ratio it is fine. Based on this we can say that we want to spend a maximum of 25% on production cost, as this will still leave us with 8% to spend on shipping.
So let’s say we find a product with a sales price of $15. We want to produce this product for a maximum price of: $15 * 0,25 = $3,75. This still leaves us with $1,25 to transport the product, after which we will have our 33% / 33% / 33% ratio.
When doing product research I usually do a quick search on Alibaba.com to do a price check.
3. High demand
This very much depends on your goals and how much you want to make on your product. Personally, I want to make at least $1000 profit on a product per month. Based 33% ratio we discussed, I should look for products that have at least $3000 revenue per month. The demand of the product is checked with an estimator like Helium 10.
4. Low competition
This is an obvious one, but also the most important one. Judging if a niche has low or high competition actually is quite complex. I have set a couple of factors that I use to determine if a niche is competitive or not.
This is pretty straightforward. You want your competition to have the least amount of reviews so you can easily catch up with them and even surpass them in reviews. I always look for products that have a couple of sellers on the first page that have less than 50 reviews. As I can easily reach 50 reviews as well and reach page 1.
Product photos are super important for customers. However, I still see a lot of sellers with very bad pictures. If I am looking at a niche and see sellers who only have 2-3 low quality-images, I know I can easily beat them if I have 7 high-quality images including lifestyle shots & infographics.
Here I look at how well a seller describes the product and if it uses the right keywords to attract customers. For example, there is a big difference between a seller who describes his product as:
Compared to a seller who describes his product as:
White iPhone Charger: 6 feet Charging Cable for iPhone X, 8, 7 Plus, iPod, iPad Pro and more
Pretty straightforward as well: If I see a niche where there are a bunch of sellers on page 1 with an average rating of 4 stars or below, I know I can offer a better quality product. I simply read their 1-star reviews to see where their product lacks, and improve on this with my own product
There is a reason I picked these factors to determine if a niche is competitive: This is also what a customer looks at when deciding which product to buy! So I am simply asking myself: Can I beat my competition?
- Can a create a better quality listing?
- Can I offer a lower price?
- Can I deliver a better quality product?
- Can I gather more reviews?
If the answer to most of these questions is: YES! You will have a very good chance to reach page 1 as well, especially if you follow my case study on how to launch a new product.
5. Easy to manufacture
This is a very important one if this is the first time you are manufacturing a product from China! There is a lot that can go wrong in the manufacturing process and if you no experience with this, you probably won’t catch any potential errors. For this reason, I advice every new seller to find products that are very easy to manufacture. So stay away from any sort of electronics or products that require a lot of assembly. Try to look for simple products that are made from 1 piece, or at least from 1 type of material.
6. Is the product seasonal?
This isn’t a very strict requirement. As I have a lot of success with some seasonal products. However, I do want to point out that you should always find out if a product is seasonal. For example, if you are doing product research in July on Pool Toys you will probably find that there is a huge demand for it. But when you finally launch your product in November you will find that all the sudden the demand has dropped for this product. This is not a bad thing as you can still make a lot of money with seasonal products in the right period, but you should definitely be aware of this. You can check if a product is seasonal with Google Trends.
Importance of product research
I’d say that your product selection is the most important decision in your whole FBA process. It doesn’t matter how good your marketing or launching strategy is, if you picked a bad product you will have an extremely hard time to make it a success. Personally, I spend at least 1 month on product research when picking new products, and this is not something to be rushed. Below I will quickly go over some products I found using this checklist, but I strongly advice everyone to take their time for this!
2). Using Helium 10 to find Amazon product idea’s
Ok so now that we know what we are looking for it is time to actually put in the work and find that golden product! There are loads of ways to look for products but the beautiful thing is: Helium 10 has a database with Amazon products on which we can use these requirements!
- Categories: Stay away from categories that are difficult to manufacture, such as Watches & Electronics.
- Monthly Revenue: Minimum $3000 per month
- Price: Minumum $15.
- Review count: Maximum 50.
- Rating: Maximum 4.
So we enter these filters into their database and POOF! A huge list of potentially great product idea’s! I’ve been scrolling through the database for about 20 minutes and found a great product!
1. Sales Price: $19.98
2. Profit margin: $8,90 – PERFECT!
Sales Price: $19,98
Amazon fees: $6,59
Production cost: $3
Estimated shipping: $1
Profit Margin: $8,90
Quick Alibaba price check:
We check the Amazon fee’s with the FBA fee calculator:
3. Demand: $4000 revenue per month (GOOD)
This is above our target of at least $3000 revenue per month. We calculated that our profit margin on this product will be around 40% – 45%. So with $4000 revenue that will result in about $1,600 profit per month.
4. Low competition: Extremely low!
The seller only has 13 reviews. And even better, the average review rating is 4 stars! If you can improve on his product and get a couple of reviews you should be able to do much better than him.
5. Easy to manufacture
This product is made out of 1 piece, requires no assembly and very easy to make!
6. Not Seasonal
This is an amazing product with barely any competition. Very good profit margin. The only downside is that there no huge demand for this niche. You can easily make $1k – $2k profit a month with this product but there is not really room to grow bigger.
I think I have explained every aspect on what to look for when doing product research and even showed you how easy it is to find products with the Helium 10 Database. So there is not much more I can show you, now it is time for you to take action! I found these products in 20 minutes. Definitely not something I would recommend, but imagine what you can find when you spend a full month on product research!
So a lot of people have been asking me how to manufacture your own product. I wrote a step by step guide on this here. If you are serious about starting with FBA I’d say you should check it out.
More Amazon Product Research Methods
This is only 1 of the many methods of doing product research. I picked this method, because this was the exact way I found the product I used for the case study on how to launch new products on Amazon. However, there are way more methods, which I will go over in future posts!
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