Product research is vital to eCommerce success. Businesses that thoroughly research products are more likely to sell something that customers want and that can generate profit. When it comes to selling on Amazon, there are several important things to review before deciding to sell a product.
My name is Amy Hunt and I have 20 years of online selling experience and tons of useful insights to help you get off to a successful start. Below you will find my insights on product research for dropshipping and private label. Learning from someone with experience is a great way to see what works while learning and what mistakes to avoid.
How I Got Started With Amazon
Let’s start with a bit on my experience in eCommerce. I started selling online back in 2001. In the beginning, I found extra stuff lying around my house and listed on eBay. In 2003, I branched out into Amazon and began selling products for a friend that needed help learning how to use the platform.
Over time, I was able to find success in the jewelry niche and this was the main type of product I focused on. Today, I sell a mix of dropshipping and branded products on Amazon. I also sell through Shopify and eBay.
So while my business has expanded to cover a variety of sales channels and products, Amazon research remains the most important part of my business. Amazon is still the biggest revenue generator and research is key to long-term profitability. With many ups and downs, I’ve learned a great deal about how the marketplace works and I share this knowledge with new sellers through my YouTube channel and guides like this.
What is Amazon Product Research?
Amazon product research is the process of learning about products to determine if you can sell them successfully on Amazon. With it, you can see a particular item’s profitability, how competitive its market is, and whether or not it is easy to sell.
How you perform product research varies depending on your business model. Different products and sourcing methods rely on different criteria to be successful. Common Amazon business models include:
- Private label:You partner with a supplier that creates a unique product for your brand.
- Dropshipping:With dropshipping, you have suppliers ship your products directly to customers after they make an order on Amazon.
- Online and Retail arbitrage: Arbitrage is a selling strategy where you buy products from a physical or online store and resell it for a higher price on Amazon.
- Wholesale:With wholesaling, you buy products in bulk from a supplier or manufacturer and then list them on Amazon.
This guide will show you how to conduct product research for Amazon. It includes real-life examples and tips and techniques from my real experience.
My Product Research Technique
Researching products before selling them helps you understand a potential market and its profit potential. Below, I will share my strategy for Amazon product research so that you can learn to find winning products of your own.
Defining Your Product Criteria
The first step to Amazon product research is to know what to look for in a product. There are certain traits that important for any type of item. This includes:
High demand
You should start your product research by looking for items in high demand. These are products that have a lot of sales and people interested in them. If a product consistently generates a high number of sales, there is a good opportunity for you to turn it into a reliable source of income for your business. I typically look for products with at least 300 monthly sales on Amazon.
Competition
After validating a product’s demand I like to look at its competition. Competition is a big factor in a product’s potential as it directly impacts how much of the market you can gain. An item may have really high sales but if there are a lot of other businesses selling the product, the amount of profit you can make won’t be very high.
There are a couple of ways to analyze the competition. If you use dropshipping its helpful to look at the total number of other sellers for the product. If selling a private label item, you should check the number of competing products in the niche.
Profitability
As income is the main goal for selling any product, it is natural that profitability is a big part of product research. The simplest way to assess a product’s profitability is to check its profit margin. This metric shows what percentage of each sale you keep as profit. I generally like to look for products with margins over 50%.
These are important things to check for any Amazon product. Now, we’ll look at some of the other important traits to search for in a product for dropshipping, arbitrage, or wholesaling.
Product Criteria for Dropshipping, Arbitrage, and Wholesale
Not private label
When looking for good dropshipping products, it is essential to check to see if a product is a private label item. These products belong to specific brands so you can’t sell them unless you get direct permission from the owner. Many private label brands don’t make their products available to resellers and dropshippers.
Ungated products
Amazon has a mix of restricted and open categories. Restricted categories have selling requirements while open categories do not. I recommend new sellers stick exclusively to ungated products. This will help you get up and running faster as you won’t have to jump through extra hoops when getting started.
Non-Hazmat items
Some Amazon products have hazardous materials. For instance, a hairspray with flammable chemicals. Like gated categories, hazmat items have additional approval steps. Because of this, I recommend avoiding these products so as to not have extra complexity.
Prime delivery
Amazon Prime is an important piece of the eCommerce giant’s success. Prime customers can get free, two, and one-day shipping for eligible products. When you dropship products, they’ll take longer than two days to arrive. As such, you want to avoid competing with products with Prime shipping.
My Basic Method for Finding Products
With the key product criteria established, let’s go through a simple yet effective method I like to use for finding good products. When it comes to my Amazon product research, research software is crucial to my process. I have long relied on AMZScout as the tools are easy to use while providing high-quality data and analysis.
This is the process I use to find dropshipping products but it can also be modified to work with different business models. As my business has grown, I’ve adopted a similar methodology to discover great products for private label.
There are several helpful product research tools. The first is the Product Database. I like to use it to discover product ideas and uncover new trends. Here’s how to do it:
- Go to the AMZScout Product Database.
- Add filters for your product criteria. For example, I like to look for products that have over 300 sales and fewer than 30 reviews.
- Check the results and save interesting product ideas.
After I find good product ideas, I use the PRO extension to get more insights on a product before deciding to sell it. Here is a quick overview of how I do this.
- Go to Amazon and find one of the products you saved. Then, open the PRO Extension to review those items.
- Look at the Niche Score and Product Score to find opportunities with the best profit potential.
- I also like to check the Product sales history to ensure an item has steady sales.
When I perform this analysis, I tend to look for products with a rating of 7 or higher. The tool is quite handy as it provides unique scores for different selling methods. No matter how I plan to source an item, it’s also important that a product has good sales volume throughout the year. It’s harder to build a solid business around a seasonal item, so I look to avoid such in my research.
My Fastest Way to Find Products to Sell
When I want to get a fast understanding of a product I’m considering, I have this process to quickly assess products for reselling. Below, are the steps that I use:
- Go to Amazon and find a potential product.
- Open the AMZScout Amazon Dropshipping, Arbitrage, and Wholesale
- Check the results page and review the following metrics: margins, seller types, and FBA fees. Below we can see what this looks like on the results page.
- When you find a good product, click on the product page and analyze it further. Check to see if it is private label, ungated and if it has Prime shipping.
- Analyze the product’s Price and Buy Box histories. This will help you determine the best pricing strategy.
- Use the calculator to forecast your potential margins. The tool automatically populates the FBA fees and sales price to calculate Net profit per unit. This will show you how profitable an item is.
This process will give you a fast way to find products that will work well for dropshipping, online arbitrage or wholesale on Amazon. When I discover good ideas, I also like using the AMZScout Keyword Search tool to find the best keywords to use for optimizing my product listings.
Real Product Examples
Now that you know what to look for in products and how to find them, let’s check out some real-life products to see these concepts in practice. In this comparison, we’ll look at both good and bad products. All these were items that I considered selling at one point. On the surface, they all looked great. But then I used the AMZScout tools to see which ones had good potential and which did not.
Example of a Bad Product to Sell on Amazon
Below, you can see an image of the Amazon listing for an S.T. Dupont duffle bag. The product is a water-resistant bag that is used for carrying luggage for travel. It is an example of an item that you don’t want to sell on Amazon.
You want to avoid this product because Amazon also sells it. It’s very difficult to compete with Amazon as a seller. As a result, it would be hard to win the Buy Box for this listing, ultimately leading to a low number of sales.
Example of a Good Product to Sell on Amazon
Below we can see an example of a good Amazon product. The hidden camera connects to wifi to allow you to monitor your home from your smartphone or computer.
There are several reasons that this item would make a good product to dropship on Amazon:
- Only a few other sellers:This product only has two other FBA sellers so you won’t face much competition.
- Good profit margins:This product has a 75% profit margin, well over the 50% target I normally look for.
- Ungated product:This product is in an unrestricted category so you can sell it without approval.
- No hazmat:there aren’t any hazardous materials so you won’t face extra requirements.
- No private label:You can resell this product because it’s not private label.
Tips for Amazon Product Research
Below are some extra tips that have been key to my personal experience of finding great products to sell on Amazon:
Spy on Competitors’ New ideas and Follow Trends
An easy way to come up with new product ideas is to spy on your competitors. You still want to do your own research, but looking to see what the competition is doing can be a great starting point for finding new products.
Another simple way to get fresh ideas is to stay on top of the latest Amazon and eCommerce trends. The AMZScout Product Database can help with this as there is a filter for Trending Products. By enabling it in your research, you can quickly find items that are seeing positive trends in sales growth over recent months.
Track Price Changes and Forecast Potential Profits
Low prices is one of the biggest reasons consumers love to shop on Amazon. Because many buyers are looking for the best deal, it is common for sellers to try to price their products as low as possible. This leads to frequent shifts in price across the market.
When you’re considering selling an item, you want to be aware of price fluctuations. Doing so will help you predict future profits more accurately. For example, if you notice that prices across a niche decrease during the holiday season, you’ll know to forecast less revenue per sale during this time of the year.
Conclusion
The importance of product research can’t be overstated. Without it, you run the risk of selling something with low chances of success. By thoroughly researching many different products, I’ve been able to find unique ideas that I can sell for a profit. The process has become the foundation for the success of my business.
There’s a lot to consider when researching Amazon products. However, once you know what to look for, you can set up systemized processes to make finding new product ideas simple. Following the tips and methods laid out above will help you to also discover great products for your business.
Product research is vital to eCommerce success. Businesses that thoroughly research products are more likely to sell something that customers want and that can generate profit. When it comes to selling on Amazon, there are several important things to review before deciding to sell a product.
My name is Amy Hunt and I have 20 years of online selling experience and tons of useful insights to help you get off to a successful start. Below you will find my insights on product research for dropshipping and private label. Learning from someone with experience is a great way to see what works while learning and what mistakes to avoid.
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About the Author:
Amy Hunt is a home business expert with 20 years of online selling experience. She started selling on Amazon to be able to stay at home with her newborn. As a home business expert, she has many valuable insights that can help you transition from 9-5 jobs to earning income selling from home.