How to sell on Amazon: Selecting a successful item
What products should you be selling on Amazon? What do you know about whether customers will buy it? How do you determine what price to set so you earn a profit? We’ll address all of these issues and more, and explain exactly how to look for the best ideas for products. Here are a few of the tips that will assist you greatly in your research:
- Let data guide your choices instead of picking an item to market because it’s what you’re interested in. We’re here to help you. (And If you do think you know what you would like to sell, you can prove this with data about the performance of similar products at Amazon.)
- Do not rush it. Research on products is a crucial part of the process that requires time and effort to be effective.
- Make use of a tool, such as Jungle Scout, that can analyze enormous quantities of Amazon information to discover products that meet the criteria of large demand, low competition, and positive profit. We’ll guide you through the process.
How do you find a lucrative product that is in high demand and low competition for sale on Amazon
If you’re looking at any products look them over for:
When you’re considering a product consider the: could I find and deliver this to Amazon at a cost that is substantially less than what it’s currently selling for?
It is generally possible to use generally the “rule of three’s” to calculate this. The sale of each product is divided into 1/3 for costs, 1/3 for the cost of landing, and 1/3 for you. (So that if the item is sold for $15, you can expect to make $5.)
Here are the methods to determine potential profits by evaluating the revenue and costs for each opportunity in your product.
The collective costs to produce and transport your product to Amazon’s warehouses:
Cost of inventory
Any preparation or inspection fees
Referral fee: Essentially Amazon’s “commission” for each item you sell on the platform, this is typically a flat 15% which you pay when a product sells
Selling plan fee: For professional Amazon sellers, a monthly fee of $39.99; for individual Amazon sellers (those who typically sell fewer than 40 units per month), a $0.99 per sales transaction (but no monthly fee)
Fulfillment fee: For FBA sellers, this per-product fee covers Amazon’s cost for packaging and shipping products, and it varies based on the weight and dimensions of your product and which marketplace you’re selling in
Storage fees: FBA sellers pay either a monthly storage fee or long-term storage fees.
Business costs may include advertising and packaging Revenue
Of course, your take on any sale will depend on how much you can buy the product for, and what fees come out along the way.
As a general rule, you want the product to sell for $20-$70 to allow for healthy profit margins. Below $20, profit margins are minimal and possibly not worth your effort. Above $70, some customers are often unwilling to spend higher amounts on a brand they don’t recognize.
Simply calculate your profits by subtracting fees and costs from your potential revenue.
We suggest using Extension to discover exactly how much you earn and what Amazon charges for a particular product. Use Extension to an item listing that is similar in terms of weight and size and click “Net Price.” Then you can input your selling price as well as your price for the product, and Extension will break down all charges for selling and display the profit.
The most important aspect of a product that is suitable for sale on Amazon is the demand. Are people interested in this product? Are they searching for it, or do they have an issue or need that this product can solve? Data is used to answer these queries.
The most important metric that lets us assess the level of demand for Amazon is sales.
The next step is to examine the competition by finding out how many similar products are available and whether there’s a gap within the marketplace for fresh products.
The primary metrics that determine the competition are the number of products they sell and the number of reviews and ratings they receive. Also, are the products that are already on Amazon are they of any quality?
Jungle Scout’s product research tools to study these parameters and demonstrate how to identify lucrative products to sell on Amazon
What kinds of products are sold the most on Amazon in the greatest amount?
The top 10 categories of products Amazon have Amazon are:
3. Toys and Games
4. Fashion, Shoes & Jewelry
5. Health, Household & Baby Care
6. Sports & Outdoors
7. Arts, Crafts & Sewing
9. Kitchen & Dining
These 10 categories are the most popular by the amount of FBA sellers. Learn more on Amazon and the categories of products available here.
Start to conduct your product research
Amz publication help you develop and narrow down the list of ideas for products by the primary requirements above: profitability demand and competition.
Browse Amazon’s product database
Utilizing the Jungle Scout Product Database, you can look through the entire Amazon inventory (hundreds of millions of items) and search for products by filtering them with specific criteria to narrow your search ideas.
If you are looking to investigate potential opportunities for your products within the Pet Supplies category. Choose that category, and then begin adding filters. (If you’re not sure of the category you’d like to dive into, try a variety of categories! Review our research on categories of products and other ways to improve your product research with our guide.)
- Price (for profit): Aim for $20-70.
- Sale (for Demand): Aim for a minimum of 300 units per month (~10 daily sales)
- Review count (for competitors): Of the top 10 items, we would like to have at least 500 reviews or fewer and, ideally, 3 to 5 are less than 50 reviews.
- Evaluation: Find products with poor ratings, and aim for a maximum rating of 4 stars (these can allow you to improve the product and surpass the competition)
- List Quality Score also known as LQS, Search for listings of products that could use improvements. Aim for an average of 5 – 7 LQS
These filters will narrow your options of products that have the potential to be explored further.
Here’s an example of a good idea for products that we could explore further:
Based on this it is recommended to conduct more research on this area.
Other aspects you’ll need to consider are:
- The weight and size of the item (for normal, inexpensive shipping)
- Ease of sourcing/manufacturing the product
- Seasonality (ideally your products are in high demand all year long)
- Uniqueness (the market isn’t dominated by a brand that is already established)
(Most Amazon sellers are probably following similar guidelines in their research on products. How can you beat your competition? We will go over each of these areas in greater depth inside our Amazon sales guide.)
Guide to Selling on Amazon
You can also conduct product research by browsing Amazon.com using Jungle Scout. Click the extension, and you’ll have the ability to see product information like the Best Seller’s Rank (BSR), Average price, monthly average sales, a customized Opportunity Score, and much more using Chrome as well as Firefox browsers. You can also follow products on this site this is an essential aspect in assessing the potential of a product.
Amz Publishing Profs suggest keeping track of as many results as you can from the very first result page results for a particular product keyword for at most two weeks to track the effectiveness over time.
It’s not a requirement to look for seasonality, but you can easily see by analyzing trends in search volume. Monitoring your product over some time helps you make certain that the sales of your product aren’t being inflated for a short period because of promotions that a seller might be operating or other unrelated circumstances.
Inside Jungle Scout’s Product Tracker, you’ll be able to view past sales and sales for all of the listings. It is possible to change the display to show the last 60 days, the number of units sold each day, the price reviews, inventory levels, and much more information.
Discover improvement opportunities
The goal is to locate an opportunity for your product that has established demand and profitability, however, one that you can be competitive. You’ll have to improve your product or be distinctive enough to be appealing to buyers who want unique attributes. It’s not necessary to create a new product Just make sure you distinguish yourself sufficiently to make your product stand out. (You’ll be working with a vendor who’ll take care of the changes on your behalf (more about that later.)
You can find ideas for improvement by looking through the reviews and “Customer Questions & Answers” section of product listings. What do customers appreciate or dislike about the product? Think about all the factors, including the color, material, size Usability, function packaging, etc.
If you’re seriously considering a purchase, consider purchasing the product’s competitors to get first-hand knowledge of any issues that you can improve on. Make notes (you can save your notes in the Products Tracker).
Selling your products on Amazon implies that you’re creating real business and without a doubt, there are boxes you need to examine and regulations to adhere to especially when it comes to Intellectual property (IP). Amazon is adamant about ” black hat” actions like counterfeit products as well as trademark infringement, therefore, you must ensure that you locate items that you’ve got the rights to manufacture and sell.
You can’t sell anything that is patent-pending because it implies that someone else has all rights to the idea, the method of operation, or another essential quality of it.
How can you tell whether a product has patents? Engaging a lawyer is one method of determining the validity of patents, however, there are other actions you can do by yourself:
- Google “patent” + [your product idea].
- Find listings on Amazon for the product and look for any patents.
- Find out if competitors are selling the same product. If they are, then it’s highly unlikely that the product is patent protected since patent holders usually apply for their patents.
Trademarks are any word, symbol, or series of words an organization legally registers or creates use of to showcase their product or brand. It is not possible to use the trademark of another company on your item. For instance, if you’re making a private label product it isn’t possible to utilize the brand name “Nike” and Nike’s brand.
Before you decide on a logo, brand name, or slogan to promote your Amazon company or product, make sure you do a trademark examination by contacting the United States Patent and Trademark Office (USPTO).
3. Other limitations and liabilities
Find out if Amazon has any restrictions or certifications that you must have for a particular product or category. For instance, there are subcategories of Toys & Games where you require a Children’s Product Certificate (CPC) to sell.
Consider if someone can easily become sick or injured with the product. Beware of products with a greater risk of liability, such as electronic devices and products for the body (cosmetics lotions, cosmetics, and nutritional supplements) as well as other hazardous products (like ones that can be ignited or have sharp edges).
Simply log into Seller Central and create the listing for the product. Once you have selected the subcategory level Amazon will notify you if the item is not available.
Take into consideration the ease and effectiveness of the source
For your very first product, you’ll need to choose something straightforward to create and ship. Take these aspects into consideration when deciding on your ideas for products:
Look at a solution that requires only minor changes This means that you’ll have fewer details to discuss with your supplier and have more options of suppliers to select from.
The smaller, light products are less difficult to ship. Additionally, you require a durable product that can withstand the process of shipping. You don’t want a piece that could break easily.
If you’re not producing or selling products in the same nation (not uncommon for FBA sellers in the present) it is necessary to import the product to the proper market. Every country has specific regulations on what you may and cannot import. You can consult an agent for freight forwarding (for no cost) to get information on how to import your goods (more on this in the following).
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