What you will learn:
1). My Product Research Criteria.
2). How to Find Amazon Product Idea’s.
3). Three Real Examples of PROFITABLE NICHES!
Following my latest case study on how to launch new products on Amazon.com, I have had a bunch of questions on how I found that product. So in this post I will tell you exactly how I find my Amazon niches!
You need 2 things!
When doing product research, 2 things are essential:
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. Profit Margin
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 tools like Jungle Scout or Helium 10.
Having a product research tool is absolutely essential. Else you will have no idea how much demand there is for your product.
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, and Helium 10 also offers Historical Monthly Sales.
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). Finding 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!
So this is the field where you can enter the filters. Below I will explain the filters I use:
- Categories: Based on if a product is easy to manufacture I have selected these categories. You can experiment with this, but I would stay away from the Watches & Electronics categories as there are extremely hard to manufacture!
- Price: Minimum $15
- Revenue: Minimum $3000 per month
- Reviews: Max 100
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 noted the 2 best products I have found below.
Idea 1: Dog Planter
This is the first product that caught my attention. A cute little planter in the form of a dog. Lets quickly check if this product fits our criteria:
Sales Price: $23
FBA Fee’s: $9.14
Production cost: $3.30
Shipping Cost: $2
Estimate Profit: $8,56
Profit Margin: 37%
Estimated Monthly Sales: 176
Estimated Monthly Profit: $1506
So all the stats looks good. We can even drop our price down to $19,99 to undercut the competition and still make $5 per unit. This is looking very promising.
We did a quick price check on Alibaba to see what our manufacturing cost would be like.
As you can see we can manufacture this product for $3,30. With a minimum order quantity at a 1000 units. Now we can also estimate our initial investment. Since we estimate that the shipping will be $2 per product and we are ordering a 1,000 units. We can calculate our initial investment:
$3,30 + $2 = $5,30 Landing cost
$5,30 * 1000 = $5300 Initial investment.
I get asked about this a lot? What should my initial investment be? Well as you can see you can start with this product for $5k. You can find manufacturer that have a lower MOQ. However, their pricing will be a bit higher.
Now lets take a look at our competition. For this we like to look at the reviews. This product only has 58 reviews. It’s pretty new in the market and it shouldn’t be too hard for us launch our product and get this many reviews as well.
One of the main things to note though is that it has a lot of bad reviews and an average rating of only 3,7.
If we look even further we can see that customers complain that is not easy to assemble the planter and it is not sturdy. We can improve this on our own product, but including a very detailed instruction. And we can even negotiate with the manufacturer about using a sturdier material.
Should I go for this product?
Yes, this is a very easy product for beginners. The estimated monthly profit isn’t huge. But it is very easy to outcompete this product as we can easily beat them on price & by creating a superior product.
Idea 2: Soft Dog Cone
Yes, another dog product lol.
This product is more for advanced sellers. But I just wanted to show that you can also find more valuable products with Helium 10.
Sales Price: $28
FBA Fee’s: $10.19
Production cost: $2.6
Shipping Cost: $1.5
Estimate Profit: $13,17
Profit Margin: 47%
Estimated Monthly Sales: 716
Estimated Monthly Profit: $9,429
As you can see there is a lot more demand for this product & the profit margin is also a lot higher. This product is raking in almost $10k in profit each month with a very simple product that only has 42 reviews.
Now competing with this product will be a bit harder. As all their reviews are great. It looks like this is just a very well made product & their listing is looking top notch as well.
However, with 42 reviews they are still pretty new in the space. And if you know what you doing & go hard on your advertising campaign you can definitely out compete them.
Should I go for this product?
If you have never sold on Amazon before and don’t want to take a risk I would start with an easier product, like idea #1. However, if you have a bit of experience i’d say you definitely need to go for these type of products. There is so much more money to be made in the bigger niches!
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 Black Box. 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!
I typically only use their service for 1 month where I do very extensive product research. After this month I have found my product and can cancel my membership, which makes it very affordable.
Are You Ready For The Advanced Level?
Because of this, I focussed on developing new product research strategies! I ended up sticking with 3 methods that helped me find awesome niches every time I used them! I have been using these methods non-stop lately and never run in the problem anymore that I see the competition increasing by the time I am ready to launch!