Do you want to be an Amazon seller but don’t know what to sell on Amazon FBA? We’ll show you the 5 signs of a highly profitable Amazon product.
Amazon FBA can be a profitable business or a side hustle. But success on Amazon FBA is not guaranteed. One of the most crucial factors for success is product selection. Choosing the right products to sell can make or break your business on Amazon FBA.
Let’s explore the importance of product research and how to spot the signs of a promising product.
Product research is the foundation of finding a profitable product to sell on Amazon FBA.
It involves analyzing market trends, customer demand, and competition. Without proper product research, you may end up investing in products that have little demand and high competition. Those kinds of products are very hard to sell and you might lose your investment.
So, how can you avoid picking such a product? There are several methods for conducting product research. One common approach is to use Amazon’s own data to identify popular products.
You can use tools like Jungle Scout or Helium 10 to analyze sales data and other metrics to determine the demand and competition. Another method is keyword research using tools like Google Keyword Planner or SEMrush. These tools can help you identify popular keywords and product niches.
One of the signs of a profitable product on Amazon FBA is high demand and low competition. High demand indicates that there is a market for the product and that customers are searching for it. Low competition means that few sellers are offering the same or similar products. This is giving you a better chance of capturing a larger share of the market.
To determine demand and competition for a product, you can use tools like Jungle Scout or Helium 10. We usually recommend looking for a product that has a search volume between 20,000 and 25,000 per month. That’s a good metric to check if the demand is high enough.
To check how saturated and competitive your product is, you want to check how many reviews your competition has. The top ten sellers should have under 250 reviews. If they have more, the product is likely too competitive.
Profit margin and cost of goods are two important factors to consider when selecting a product. Profit margin refers to the difference between the selling price and the cost of goods sold. The cost of goods refers to the expenses incurred in producing or sourcing the product.
To calculate profit margin, subtract the cost of goods from the selling price and divide the result by the selling price. For example, if a product sells for $20 and the cost of goods is $5, the profit margin would be ($20 – $5) / $20 = 0.75 or 75%.
When selecting products, it is important to choose those with a high profit margin and low cost of goods. This will ensure that you have enough room to cover expenses and make a profit. Products with low profit margins or high costs of goods may not be sustainable in the long run.
Weight and shipping costs are important considerations for Amazon FBA sellers. Amazon charges fees based on the weight and dimensions of the products. So, choosing lightweight and easy-to-ship products can help reduce your expenses.
When selecting products, also consider any extra packaging materials that may be required. Avoid products that are bulky or heavy, as they can increase your shipping costs and eat into your profit margin. To find lightweight and easy-to-ship products, you can use tools like Jungle Scout or Helium 10 to filter products based on weight and dimensions.
If you want to build a stable business that sells well all year around, then avoid seasonal and trend products.
Seasonal products experience a surge in demand during specific times of the year, such as holiday decorations. Trending products are currently popular or in high demand due to a specific trend or fad.
The problem with these products is that sales will die down when the season or trend is over. Once the trend or season is over you may be left with excess inventory.
That’s why we recommend starting with an evergreen product that people will buy all year round.
Customer reviews and ratings play a crucial role in the success of your Amazon FBA business. Positive reviews and high ratings show customer satisfaction. They can help build trust and credibility for your products. However negative reviews and low ratings can deter potential customers and harm your sales.
When selecting products, it is important to choose those with positive customer reviews and ratings. This indicates that customers are satisfied with the product and are likely to make repeat purchases. You can use tools like Jungle Scout or Helium 10 to analyze customer reviews and ratings for a particular product.
There are several tools and resources available to help you conduct product research on Amazon FBA. These tools provide valuable data and insights that can help you make informed decisions about product selection. Some popular tools for product research on Amazon FBA include Jungle Scout, Helium 10, AMZScout, and Viral Launch.
These tools provide data on sales volume, competition, keyword research, and other metrics that can help you identify profitable products. Besides these tools, there are also online communities and forums where sellers share their experiences and insights. These communities can be a valuable source of information and can help you stay updated with the latest trends and strategies in the Amazon FBA space.
When using these tools and resources, it is important to consider their pros and cons. Some tools may have limitations or may not provide accurate data, so it is important to do your own research and cross-reference the information before making any decisions.
Selecting the right products and launching them on Amazon FBA requires careful planning and execution. Here are some tips to help you increase your chances of success:
1. Conduct thorough product research: Take the time to analyze market trends, customer demand, competition, and other factors that can impact the success of your product. Use tools and resources to gather data and make informed decisions.
2. Consider your target audience: Understand who your target audience is and what they are looking for. Choose products that align with their needs and preferences.
3. Test the market: Before investing in a large quantity of inventory, consider testing the market with a smaller batch. This will allow you to gauge customer demand and make adjustments if necessary.
4. Optimize your product listing: Create a compelling product listing that highlights the features and benefits of your product. Use high-quality images, clear and concise product descriptions, and relevant keywords to improve your visibility and conversion rates.
5. Monitor and optimize your performance: Continuously check your sales, customer reviews, and other metrics to identify areas for improvement. Make adjustments to your pricing, marketing strategies, or product offering as needed.
In conclusion, product selection is a critical factor for success on Amazon FBA. By choosing the right products, you can increase your chances of profitability and long-term success. Consider factors such as demand, competition, profit margin, cost of goods, weight, shipping costs, seasonal or trending nature, and customer reviews when selecting products for your Amazon FBA business.
Remember to conduct thorough product research using tools and resources available to you. Stay updated with market trends and consumer behavior to identify potential opportunities. And finally, follow best practices for product selection and launch to maximize your chances of success.
Choosing the right product for your Amazon FBA business requires careful consideration and analysis. By investing time and effort into product research and selection, you can set yourself up for success in the competitive world of Amazon FBA. If you want our insider strategies for product research and everything Amazon FBA, start with our FREE intro training here.