Product Launch
February 6, 2022

How to Use Amazon Product Research for Your Business

Table of content

Amazon has become an important tool for many entrepreneurs and small businesses. With over 300 million customers, Amazon is a great way to find the best products and make sales. But, with so many options on Amazon, it can be hard to decide which products are worth your time. This detailed guide will show you how to use Amazon product research to help you decide which products you want to sell and scale your business. We'll teach you everything you need to know, from finding out who the competitors are and conducting research on reviews and pricing.

What is Amazon Product Research?

It is tough to find the right product and understand if it's a good fit for your business. Sure, you could just try and guess and hope for the best, but wouldn't it be better to know what you're getting into? The more information you have before buying/selling that product, the better. That's where Amazon Product Research comes into play. It's a system that allows sellers on Amazon to explore the Amazon market and analyze potential products.

This product research keeps you abreast with upcoming trends in the market, and it is best that you understand what trends can affect your business niche.

What are the Benefits of Doing Proper Product Research On Amazon?

As you now know, you need to find a high-quality, low-competition, and high-demand product that you can sell at a high price to succeed on Amazon. To find this product, you need to use the best product research tool for the following benefits.

  1. It helps you understand the size of the market for a product you would like to start selling.
  2. It helps you observe what other Amazon sellers are doing that makes them succeed when selling the product.
  3. It gives you insights into the product's sales trends over time, so you will know how much interest it has garnered and predict how much money you can make monthly.
  4. Product research helps you source the product affordably to make good profits.
  5. Amazon FBA product research also helps you discover new product ideas that you can sell alongside your main product.

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Factors to Consider Before Doing Your Amazon Product Research

Before you source for a product, you need to observe these factors as they will help you understand you much money your product can fetch from your sales.

a) Price

A good Amazon product strikes the perfect balance between buying and selling prices. So, when looking for one, ensure you can get it at a reasonably low price and resell it at a higher price to make enough profits. Most of the time, products you can sell between $15 and $45 can make you good monthly sales, and they will also attract a lot of customers as they are categorized as budget or impulse buys. In addition, these need to be lightweight products you can ship affordably.

b) Sales

Your product research will give you insights into how your preferred product performs on Amazon. When you look at how many sales your competition is making over a certain period, it is the best indication of how it will also perform when you start selling it.

It is best to look for products that generate high sales. With such data, you can source the best-quality version of the product and list it with the best prices to attract the most customers.

c) Margins

You want your Amazon business to be profitable. Sales margins help you understand how profitable a product will be before selling on Amazon.

While there are different types of profit margins, your aim as an Amazon seller is a high gross profit margin. It is calculated by subtracting the cost of the products from your net sales, then dividing the difference by the net sales. The result, expressed in percentage (%), determines how profitable the product is. The higher the margin, the better profits you make.

Since margins will help you define your estimated monthly sales from a product, aim for a margin higher than 35% so your business can be sustainable. When you pick the best, high-demand products, you can estimate even higher (+60%) margins.

d) Seasonality

While we have talked about the price, sales, and margins, the next best feature to look for is the seasonality of the product you want to sell. Generally, you do not want to invest in a product that does not attract repeat buyers enough for your sales to improve.

Product seasonality is the product's ability to remain in demand throughout a year. This demand can come from new and old customers. Here are two examples of how relevant two products remain throughout the year.

  1. Halloween products. Any Halloween product or costume you choose to sell will probably make you a lot of money, but only during the Halloween celebrations. In terms of seasonality, these are not products you will want to build your business around as a new Amazon seller, as their demand will drastically reduce before and after Halloween.
  2. Baby products. Are you looking to sell baby balms/oils, diapers, bottles, or pacifiers? These are products you know will attract customers throughout the year. So, if you were to build your Amazon business around this niche, you would only need to source baby-safe, top-selling products and know your business will soar through the seasons.

When looking at seasonality, you want to avoid building your business around a product that won't sell as much during some seasons. That said, you can still sell these products during their pick season together with the all-year products you sell.

e) Amazon reviews

One of the best ways to understand what consumers want is by reading reviews left on your competitors listings. You need to understand the comments the same way your potential buyer will interpret them if you are to meet their expectations. Some expectations you can meet here include better packaging, pricing, faster shipping, and more.

On the other hand, you might need to avoid selling products with thousands of good reviews as a new seller. The understanding here is that most buyers will gravitate to the most-reviewed products to guarantee quality before they buy. So, you will struggle to introduce the same product with a new account even when you can satisfy the consumer's grievances.

f) Competition

It is best to understand what competition you would face if you sell a certain product. Even when you have potentially profitable products, when the market is saturated with successful sellers, it will be harder for you to attract buyers.

For example, when you find a good facial wash you think can make you good money, you will need to compete with big brands and seasoned Amazon sellers on Amazon, affecting the number of sales you can make.

g) Size and weight

As a new seller, the more Amazon fees you can avoid, the better your chances at making good money. As such, you can choose smaller and lightweight high-demand products that will cost you less for storage and shipping costs.

h) Gated and ungated Amazon categories

Before you source your best products to sell on Amazon, you need to understand the two product categories your products will belong to in the marketplace. While you can sell most products on Amazon, some categories such as jewelry, music and DVD, collectibles, and more require special approval from Amazon. These products belong to the gated category. The approval will often require special certifications and brick and mortar structures from where you run a certified business.

Therefore, if you want to start an Amazon business from home, you need to source products that don't belong to the gated category.

i) Best Sellers Rank (BSR)

The BSR is a number that ranks most products once they start selling. Therefore, when doing your Amazon product research, you need to look for products with a lower BSR as it indicates high demand. However, you also need to understand the difference between BSR and the product's organic ranking.

The organic ranking places the best products on the front page of Amazon's search engine results pages (SERP), while BSR is a monthly sale indicator.

In addition, also understand that a product can have more than one BSR depending on which category it is mostly sold. For example, you can find a skateboard ranking #1 on the Standard Skateboard category, but #400 or the Sports & Outdoors category. In such a case, it could be best to list your product in the better-ranking category as that makes it more visible to potential customers.

Best Amazon Product Research Methods

Now that you know what factors you need to look for when doing your Amazon product research, you need a proper research approach to check all the boxes. There are three main approaches you can take.

a) Do manual product research

Have a great product you want to start selling? You can start your research by manually searching it in different categories on Amazon. For best results, you can start on the best-seller list that displays top-selling products with good reviews.

Alternatively, if you want to generate the best product ideas, you can start your product search on other e-commerce platforms and observe google trends to see the most in-demand products.

b) Use your best Amazon product research tool

You can find many paid and free product research tools that will display detailed historical sales data you can use to build your business. Even free tools will inform you of your prospective products' demand, how to price them, and how long the demand is sustained according to Amazon and Google trends.

c) Hire professionals

If you can't seem to gather enough data to inform your Amazon business launch, the best idea would be to hire a freelancer or company to do the product research for you. Though more expensive than the other two approaches, professionals will use all the tools to research for you, thus taking less time and providing more data that you will need to succeed.

Amazon Product Research Step-By-Step Guide

Whether you intend to search product data manually, use paid or free tools, or hire a professional; the following steps will provide the best data to launch a successful Amazon selling experience.

Step 1: Generate product ideas

Your ecommerce business needs a proper strategy, which includes meticulously choosing which products to sell and under different categories. So, if you are just starting to research products, it is best to scroll through all Amazon databases to find which products perform best. Then, from the best-performing products, you will come up with the best ideas on which products you can start selling on Amazon.

This research process will need you to define your ideas through different criteria such as price, gated or ungated category, monthly sales, 5-star reviews, and BSR rankings. For more accurate data, you can also consider the seasonality of each product idea you generate.

Step 2: Perform keyword research

Product keyword research helps you also find related terms consumers are using to search for the same product. With a comprehensive list of product ideas and all related product names, you will enjoy more data that will prove vital to your decision-making before sourcing any item to sell. The data will include demand and viability.

When doing keyword research, spend more time discovering products with more related terms as this widens the demand scale across different categories.

Step 3: Search for the product niche

This step may require most Amazon sellers to use a research tool that will display more data needed to launch a business. After you have your prospective product and a list of related terms consumers use to look for it, you will need to search the niche performance to understand how well the product can perform in different categories.

Niche performance research gives insights into how a certain Amazon category or subcategory that targets certain people, demographics, problems, or interests meets consumer demands. As a result, the niche you choose for your business will have great demand and less competition for you to succeed. For example, if you were looking to sell smartphone products, one niche to consider can be portable mobile chargers; the subcategory is not seasonal, and there is a high demand for chargers. Dividing the section further to portable narrows down your industry so you can target buyers looking for lightweight chargers they can use on the go.

Niche metrics to consider

When you understand how niche categories work, you can define the data you collect into two parts for a clearer picture;

  1. Look at the niche history. The data here tells you about the demand for the niche products over a long period, when and how demand changes, the price range of different products, and the average number of niche products sales made daily or monthly. With the data, you can tell the most profitable products to sell and how much you can sell them at.
  2. Niche score. The data here assigns a score of one to ten (1-10) for each niche. A higher (10) score indicates the niche performs well with high demand and fast-moving products. With a good research tool, you will also understand how many Amazon sellers you will go against and also how easy it is to make good profits selling the products.

Step 4: Calculate your possible monthly revenue

When you have a working sales price, the next thing to do is use an Amazon revenue calculator to calculate the product's potential profit margin. The calculator accounts for the size, weight, estimated monthly sales, product costs and more editable fields to give you a profit margin range to work with. Remember, a profitable business will have high margins of at least 35% to be sustainable.

Step 5: Understand the product trends

When you have the best products you want to sell on Amazon, you also need to understand how the product trends change across certain seasons and other demographics. When you understand how demand changes over time, it will be easier to plan your business launch when the demand will be at its peak.

Step 6: Verify product demand

When you have covered all the metrics that indicate the best product you can start selling on Amazon, it is prudent to verify great demand using the following criteria.

  1. The product's sale price is affordable to consumers. While you may be tempted to get expensive products that can fetch the most dollars with each sale, it might be better to sell more affordable products ( $15-$50) that also fall into the impulse decision buying range.
  2. The product sells daily. A sales price between $15-$50 does not demand a lot of research from buyers, and since the product demand overcomes certain demographics and seasons, you will be sure to make good sales every month. Luckily, this is also a product you can source cheaply from manufactures.
  3. The product has a low BSR ranking to guarantee better visibility and demand.
  4. The product keywords generate at least 100 000 monthly searches. When more people are searching for the products you want to sell, it is clear that there is a demand to be met to make good monthly income selling.
  5. You will not be going up against big brands. Look for products with friendlier competition because trying to outdo popular brands can crumble your business.
  6. The products are lightweight. Lightweight products cost less FBA fees, and thus, are better when you look to make more money. Also, these are products most people are okay buying online since they require less supervision and are easy and affordable to return if any challenges arise.

Step 7: Plan to source your products

Now that you have all the success-guaranteeing data to start your Amazon business, the next proactive thing to do is source your products affordably so you can make the best profits. Not sure where to start? Let's discover four sales models you can apply after thorough product research.

Best Sales Models to Consider When Sourcing Profitable Products

While a good product research tool will help you make more sales on Amazon, it is only effective when you have good product criteria to follow. Defining your sourcing criteria is important since it helps you get the high-demand product with better sale margins.

If you consider the dynamics involved from sourcing the product to shipping it after you sell it, you need the best sales models commonly used in the Amazon marketplace. Here are some methods you can use.

a) Dropshipping

Dropshipping is a clever method to make money even when you don't have the product inventory capital upfront. So, when you admit you want to sell a particular product, you can list it and then source it from your supplier after a customer orders the product. Dropshipping saves you FBA fees as you don't need to worry about storage. As a result, you also don't need to worry about the size of the product.

On the downside, dropshipping will exclude your products from the Amazon Prime platform, and you may also disillusion your customers with longer delivery times. In addition, you also need to work with very reliable manufacturers to mitigate the risk of delaying your customers after they have already paid.

b) Private Label

This sales model requires you to partner with a manufacturer from whom you buy generic products and then brand them. It is one of the best models for new and experienced Amazon sellers since you can start making money while also growing your brand.

When looking to venture into private label selling, you need to find a reliable manufacturer and ask for easy-to-make products so you can fulfill orders faster.

c) Wholesale

If you have some capital, you can buy wholesale products then fulfill them at a higher sales price when your customers start ordering. You can order these products directly from manufacturers who send you a larger batch to start your Amazon selling journey.

With wholesale selling, it is wise to avoid buying wholesale products from well-known brands as the brands sell directly to consumers through their websites and shops. So, you will need to find high-quality, low-competition, and high-demand products that consumers will not hesitate to try out as alternatives. It is also best that your products are priced lower than designer brands to create a better market.

d) Retail arbitrage

Ever found a shop that often sells legit products at lower prices compared to other shops? If you desire to sell one of these products, you can buy them affordably at the shop, then list them on Amazon to sell at the market price.

While this sales model relies on you finding the best products at lower prices, it is vital to also look at the product's quality, expiration date where applicable, and brand restrictions.

Conclusion

A successful Amazon business requires you to sell profitable products. The only way to ensure you get best-selling products is by doing the proper Amazon product research and using the most affordable product criteria so you can leave good margins after selling.

The product research criteria we have shared above will guide you to the best items you can sell under different categories to enjoy the highest sales volume.

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How To Do Amazon FBA Product Research

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