It’s not surprising that many Amazon sellers have jumped on the private label bandwagon; it not only allows for greater profits, but also gives them the opportunity to build their own brands. However, it can be difficult for many sellers to get started, as the initial upfront investment typically falls between $500 to $2,000. If you want to succeed as a 2019 Amazon seller in this business model, the first and most crucial step is to pick the right product through Amazon product research. There are numerous ways of conducting product research. The commonly recommended criteria are as follows:
- Average selling price between $20-$50
- Existing demand with at least 3,000 units sold per month
- Less than 100 reviews
- Lightweight (Under 5 lbs.)
- Sourceable from suppliers such as Alibaba
- Year-round selling potential (not seasonal)
- No major brand-name competitors
Let’s break down each of these criteria in order to prepare you for conducting efficient and successful product research.
Average price between $20-$50
Price is the most important factor in determining the profitability and success of your product. $20-$50 is the ideal price range to start within because it is a low-risk investment for private label beginners. The $50 maximum keeps you from spending too much on your first unit orders. On the contrary, if you target a product that costs $100 to manufacture and order 100 units, you’ve already spent $10,000 on the products; this is before paying Amazon closing fees, FBA fulfillment fees, and so on. This investment would be tremendously more risky than spending on $20-$50 items.
Another reason to focus on lower-cost products is that most of the products within this range will be simpler to manufacture and easier to ship. Moreover, as these products are quite affordable, shoppers are more likely to consume them impulsively. That is to say, there is a greater chance for you to sell the units quickly.
Existing demand with at least 3,000 units sold per month
The next factor that you should consider when conducting product research is the demand for a product. Generally, a good product sells at least 3,000 units per month between the top 10 sellers. However, the actual demand could be tricky to assess due to two reasons. First, Amazon doesn’t provide accurate data for the quantity of products sold. Second, even with the product research data, it is difficult for sellers to determine whether the demand for this product will rise or fall in the future. Fortunately, there are Amazon product research tools on the market that provide estimated sales data and product trends. With these tools, you can easily identify the demand for a product.
Less than 100 reviews
Reviews can greatly influence consumers on their online shopping behavior. Since buyers tend to choose products with more product reviews, having more reviews means that buyers are more likely to purchase your product. Reviews are also factored into the ranking process, so more reviews will give your product a better page ranking over your competitors. Hence, reviews can be seen as the bellwether of sales. However, as a product with a vast review usually means it is already a hot seller, we’d not recommend finding this kind of product. Instead, it’s better to look for products with less than 100 reviews, because it will be easier for you to exceed that number and beat your competitors.
Lightweight (Under 5 lbs.)
When it comes to product weight, the lighter the better, as weight affects profitability in 3 ways. Assuming you are using Amazon FBA, the heavier the product, the more it will cost to ship, store, and fulfill at Amazon. The same holds true if you are using merchant fulfillment, as it will cost more for you to store and ship a heavier product. Choosing products under 5 lbs. will help keep costs down.
Sourceable from supplier
Now that you have some product ideas, it’s time to find a supplier who can make your product at an affordable cost to you. The most efficient way is to start searching on Alibaba for international suppliers. If the search returns a good number of suppliers, that will increase your chances of finding one that can meet your production, cost, and MOQ (minimum order quantity) requirements. If you can’t find any suppliers to make your product or who can do so at a reasonable price, this could be a sign that the product will be difficult to manufacture, which you would want to avoid.
Year-round selling (not seasonal)
For your first private label product, you should find something that would be able to sell year-round. Earning a consistent cash flow is less risky than banking all your revenue on holiday traffic. The quickest way to determine the product’s seasonality is to use Google Trends. Enter the main keyword for your product, and search. A high, consistent trend is a positive indicator that there will be year-round demand for your product. Below is an example of an obvious seasonal product that you should probably avoid as your first product, especially during Q1-Q3.
No major brand-name competitors
As a new brand that is just starting off, we strongly suggest choosing products that do not have many big brand names in the market. Having only a few big brand names or no big brand names indicates that the product’s competition isn’t fierce. Mild competition makes it easier for you to create improvements that can differentiate and add value to your products. For example, if you can provide better quality or bundles, then you will have a competitive advantage. In addition, it is more likely that your competitors have mediocre pictures and listing descriptions. You can easily optimize yours and surpass theirs.
A useful method is to search for the product keyword on Amazon and see if it pulls up any recognizable brand names. If it does, then this is a product that you will want to avoid.
Free And Paid Tools For Product Research
Now that we have established our product criteria, we will cover the various tools available for conducting research.
Manually searching on Amazon
This is the most common way to conduct private label product research, and it’s completely free. However, you will have to spend hours going through different products and categories to check data such as sales price and the number of reviews. It’s also extremely difficult to get an accurate sales prediction.
Paid research tools
There are paid online research tools like BigTracker, which will save you countless hours by allowing you to filter products by variables such as price and number of reviews, and can even provide real-time sales data.
If you already have some private label product ideas in mind, you can enter the keywords into the “Product Finder” feature and start evaluating its potential. Once the keyword is entered it will pull up product information such as average price, reviews, total sellers, and estimated sales for each individual item.
There are options to filter by the marketplace, brand, category, price, rank, reviews, ratings, seller, estimated sales, and revenue– just about everything you need to know in order to get the complete picture of a product. Below is a screenshot showing a search in BigTracker for the following criteria:
- Price: $20-$50
- Less than 100 reviews
- Est. sales: 3,000 units per month
- Standard size tier
- Fulfillment: FBA
Determining the type of product to sell when entering the Amazon marketplace is one of the biggest decisions you’ll make when building your brand. With the proper research, including on and off the Amazon platform, and with the right tools at your disposal, you can ensure you are well-informed and ready to navigate launching your product.
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Michael Zagare is a serial entrepreneur, a recovering physical therapist, and the founder of PPC Entourage.
Mike has an unquenchable thirst for knowledge in all things Amazon, and loves sharing that knowledge with other sellers to help them take steps towards personal and financial freedom.
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