Thursday, June 20, 2024

How to look a product to Sell on Amazon 2024

Running a profitable Amazon Fulfilled by Amazon business primarily involves finding excellent products to sell. It will either make or break your company. It will decide whether you can turn a profit right away or if you have to sell your goods for a loss.

With several multi-million dollar brand launches on Amazon past few years, I’ll share with you what has and hasn’t worked for some sellers as well as what might work for you.

The Quickest Way to Identify a Profitable Product to List on Amazon

99% of readers of this post are looking for the quickest and least expensive way to locate a profitable product on Amazon. The simplest way to have a successful product on Amazon is as follows:

  1. Look for a product where the best-selling item brings in between $5,000 and $25,000 a month (you can calculate the sales with an app like VOC.AI). The product faces too much competition if it continues to sell.
  2. Choose a boring category and exclude anything that isn’t necessary for babies, pets, electronics, or supplements (these categories are too competitive).
  3. Combine the product with an additional add-on. For instance, if you are importing fishing rods, you should give free fishing line along with it.
  4. Locate a reliable supplier on Alibaba (to identify the precise supplier your rivals are using, utilize VOC.AI blog about Alibaba Supplier for your reference).
  5. To obtain the lowest landed cost, import the product straight into Amazon warehouses using Amazon Global Logistics.

That’s the simplest way to locate a popular product on Amazon, there you have it. It has the best chance of making you some money, but it won’t make you millions unless you rinse and repeat for a lot of products (I’m not saying it’s probable you will make money – Amazon sellers have a high rate of failure).

Continue reading below for more information on where to find these products.

Step 1: Use These Tools to Come Up with Product Ideas

Selecting a product to sell on Amazon is the first step towards beginning an Amazon business. How do you come up with concepts for goods to sell on Amazon? I use the following tools:

  1. VOC.AI Product Research. This tool will help you to find winning-products, maximize sales and opportunity. This helps sellers understand what customers are looking for and what features they value in a product.
  2. Explorer of Amazon Product Opportunities. For coming up with product ideas, Amazon’s Product Opportunity Explorer is great and it’s free. The issue lies in the fact that: a) you require a paid Amazon Seller Central account; and b) it’s best suited for identifying competitive and already-selling products rather than necessarily coming up with new ones.
  3. Jungle Scout. Once you have an idea, Jungle Scout is the best tool for estimating a product’s sales volume. Nonetheless, you can still obtain some good suggestions by entering a broad search term (such as sporting goods).
  4. Helium 10. similar to Jungle Scout in most respects (see above).

Try to choose a product around which you can create a catalog containing five or ten other products; we’ll go into more detail about what makes a good product below. The majority of successful Amazon sellers possess extensive product catalogs.

Step 2: Check the Profit Margin of Products on Amazon

You will spend the majority of your time researching products on Amazon, where you can find low-competition items that you can profitably modify with a few minor tweaks.

However, how can one ascertain the revenue generated by a product on Amazon? You will, more or less, require software of some kind. The most well-known are Helium 10 and Jungle Scout (by far). Although these products have affiliate links, Helium 10 and Jungle Scout are the Amazon software equivalent of Pepsi and Coke.

These two programs are essentially Chrome extensions. I can see that this Scan Disk SD card is selling for roughly $53,000 a month using the Jungle Scout Chrome extension. You can use this method to determine how much any product is selling for on Amazon.

It’s important to locate a product that sells for between $5,000 and $25,000 per month, as was previously mentioned. More than that is just too competitive. The largest error made by novice Amazon sellers is attempting to sell a product that is too large at first. Larger product categories offer very little opportunity compared to smaller product categories.

If you’re not interested in purchasing any software, you can determine a product’s level of competition by looking at its Best Selling Rank. Products with a Best Seller Rank of 5,000 or lower are generally considered excessively competitive; the lower the number, the more competitive the market.

Step 3: Look for a Product That You Can Improve Just a Little Bit

To succeed in the crowded e-commerce market of today, you must differentiate yourself from the competition. You should alter and modify those products slightly. It is not enough to simply search Alibaba for a product to import, add your logo, and then plan to retire in a few years.

As you can see, I stated to make a product distinct rather than necessarily better.

Not that I’m trying to make a product worse, but it’s different to make oven mitts in neon green with polka dots rather than the standard grey. Better? Not always. However, it’s not the same.

Product switching doesn’t have to be difficult. Here are a few simple methods for altering your products:

  1. Make it with various hues and patterns.
  2. Make it in various dimensions.
  3. Add accessories to it, such as pumps, stands, etc.
  4. Offer it as part of a multipack.
  5. Make it from a different material (such as a rubber that is thicker).
  6. Significantly enhance the packaging

My preferred method of differentiating my products is bundling since it’s simple and still very effective. Bundling is the practice of taking one primary product and giving it a free accessory or two. Look through the top garlic press listings on Amazon.com

Here’s another instance of how sellers are effectively differentiating their products using yoga balls: bundling, better packaging, and a range of colors and sizes.

Step 4: Use Alibaba to Locate a Supplier

Finding a Chinese supplier for your product idea is the first step in developing a winning product idea. Most products on Amazon are imported from China, and the majority of them can also be found on Alibaba. In case you are unfamiliar with Alibaba, it essentially functions as a directory of Chinese suppliers and factories.

The great majority of Amazon sellers get their products from Alibaba.

We have a fantastic free guide on how to use Alibaba, so I won’t go into too much detail here, but in general, you want to do the following on Alibaba:

  1. Look up your item on Alibaba.com.
  2. Get quotes from three to five different providers.
  3. Obtain samples from the most alluring vendor.
  4. Place a purchase order for your goods.

Your first order from Alibaba should cost you between $2500 and $5000 (yes, that’s a significant financial commitment).

Step 5: Use Amazon Global Logistics to Import Your Products

It’s time to arrange for your products to be shipped to Amazon warehouses after placing your order with a supplier you discovered on Alibaba.

There are essentially two ways that you can go about doing this:

  1. All of your products can be shipped straight to Amazon.
  2. Small batches of your products can be “dripped” into Amazon from your house or a third-party warehouse.

It will be most economical to ship all of your products into Amazon at once, so that is the ideal scenario. The greatest way to ship your products is going to be through Amazon Global Logistics (or AGL), however there are a few reasons why you might not be able to do this (like Amazon inventory limits on how much you can into Amazon at once). I won’t delve into the specifics of shipping with Amazon Global Logistics once more because we have an excellent free guide available.

How to Increase Your Income on Amazon

Now that you have a plan in place, you can identify one profitable product to sell on Amazon. If you execute this properly, you will definitely make some money, but probably not enough to retire on (or even to leave your day job, if you have one). How then do you increase your income? Here are several methods.

  1. Try to Compile a Catalog with Five to Ten Items.

The majority of successful Amazon sellers don’t become “rich” from selling just one item. Here’s their secret. They frequently sell dozens or more different products in addition to a variety of different ones. Every seven-figure brand I’ve managed has a catalog with more than ten items. Say that again: to earn a living full-time.

This represents the total annual revenue for a brand with sales of about $1 million. It is evident that no single product generates sales of more than $175,000 or so annually.

How can one locate a fantastic niche? Ideally, you have a few suggestions for excellent niches to enter into sales. Hobbies that pique your interest are natural places to start.

If you’re like the majority of people who are just starting out in online sales, you most likely don’t know where to begin.

Here are two effective methods for locating niches:

  1. Download the Excel worksheet for the Amazon 5th Level Category, which lists all of the company’s categories. Search for categories ranked fifth or sixth; they are neither excessively broad nor narrow.
  2. Consumer Hobby Magazines [Google Doc]: All of the major consumer hobby magazines published in North America have been listed by our good friend Andrew Youderian. These niche ideas are AMAZING.

You have to delve further below this to find the First Level Amazon Category Hierarchy.

The goal is to identify a niche that has a wide range of possible products. Long-distance running, for instance, would be an example of a poor niche because there are very few possible products in this market. Conversely, there would be an almost infinite supply of goods available for hiking (such as sleeping bags, tents, hiking poles, etc.).

Here are some actual instances of too broad, too narrow, and just-right niches:

Which products are the best sellers on Amazon?

Are you curious about the best-selling items on Amazon? You are, of course.

These are the top searches made on Amazon during the fourth quarter of 2023, straight from the company’s Brand Analytics search engine. As you can see, a lot of these products are in line with current fads, seasonal trends, and, of course, COVID.

  1. Airpods
  2. Christmas movies
  3. Stanley 40 oz tumbler
  4. Christmas Tree
  5. iPad
  6. PS5
  7. Toilet Paper
  8. Gaming Chair
  9. Lego
  10. Crocs

Additional Positive and Negative Features of Items to Sell on Amazon

When looking for goods to import and sell on Amazon, consider the following additional characteristics:

  1. Larger & Heavier Products: Due in large part to the difficulties associated with shipping goods by sea, smaller, lighter products that can be transported by air face far greater competition.
  2. Products That Retail for $25 or More: Generally speaking, higher-priced goods have larger margins, allowing for greater expenditure on sponsored advertising.
  3. Low-Risk Products: You bear responsibility for any damage or harm caused by products you import from China. Products with inherent dangers should be avoided (e.g. baby products, hoverboards, etc).
  4. Labor-intensive Products: When a product requires a lot of manual labor and little machine labor, China offers the largest cost advantages. It will be relatively inexpensive to source anything that needs a lot of cutting, sewing, screwing, packaging, etc. from China. Other products with high machine labor requirements—electronics being one obvious example—typically don’t offer a substantial cost advantage when produced in China.
  5. Products Not Covered by Intellectual Property: Products covered by intellectual property, or IP, typically have patents and/or trademarks. If your product infringes upon someone else’s intellectual property, Amazon may suspend it and/or file a lawsuit against you.

How to Maintain Product Profitability

The saying “Profits are sanity, revenues are vanity” is one of my favorite quotes.

Comparing revenue figures is a common issue in the e-commerce industry. How often do you hear someone declare their success as a seven-figure seller with pride? The issue is that you can generate a lot of revenue but not profit (I know I have done it!).

Good net margins for an e-commerce company typically range from 20 to 30 percent, but they can frequently be closer to 10%, particularly for larger companies with higher overhead.

You can increase your profit by increasing the selling price or decreasing the costs. Optimizing the selling price of your products can be achieved through differentiation. There are many ways to cut expenses, but reducing the cost of your landed product is one of the best strategies. See our Importing from China Mega Guide for more information on how to reduce your landed costs.

Conclusion

This post ought to provide you with a solid foundation for identifying a market niche around which to establish your online store and then identifying potential product lines. It can take a very long time to complete this process. Before I started creating and promoting my newest brand, I took months to simply choose a niche and find potential products. Finding high-quality products and niches is ultimately what builds an effective e-commerce business.

Do you have any inquiries about identifying a product or niche? If so, please feel free to enquire in the section below.