The Amazon market is a potential gold mine. Almost everyone can sell on the platform, and it is simpler to source products than when it was five years ago. And finding products to sell is the very first step to start a business on Amazon.
This guide will tell you everything you should know about Amazon FBA product research, from the basic principles to an Amazon product research tool you can use to succeed.
What is Amazon FBA?
FBA is a short form of Fulfilled By Amazon. It means you send all of your items to the Amazon warehouse. Then, the Amazon workers will ship your goods to the customers.
Each product is assigned an ASIN (Amazon Standard Identification Number), which allows them to handle packaging, shipping, and customer service.
Sourcing products is the most laborious part of selling on Amazon. After you source your product and arrange to ship it to an Amazon warehouse, most of your work is done.
4 Ways to Sell With FBA
- Retail Arbitrage: This method is the model of "buy low, sell high." Retail arbitrage involves buying lower-priced clearance or merchandise, and then you sell them for more on Amazon.
- Reseller: You buy products in bulk at wholesale prices, then sell them for a profit.
- Private Label: You take an existing product and re-label it with your brand name. You can also make incremental changes or improvements to solve problems or add uniqueness.
- Proprietary Products: You design and develop a product from scratch.
Get Started with Amazon FBA Product Research: A Step-by-step Checklist
While there is no best way to be a successful Amazon FBA seller, we have some general rules that will increase your chances of making a profit.
As you do Amazon FBA product research, put them through this 10-point checklist to find the most suitable products for the best product launch possible.
- Price: The item price must be high enough to be profitable but not too expensive that you have to leverage your finances to execute an open order. The consensus is that item prices between $15 and $20 are an ideal place to start. You can go higher, but once you drop below $15, your profits start to erode.
- Profit margin: In addition to product costs, you will also need to consider shipping, taxes, fees, product returns, etc. Ideally, you should make about 25% to 30% of the cost of the product, or at least $5.
- Competition: You should know that you are competing in the biggest market in the world. And almost all sellers there already have a name. Avoid confronting Amazon itself. Before sourcing or buying anything, make sure Amazon is not sourcing and selling products either.
- Reviews: Amazon's algorithm relies heavily on reviews to choose what products are presented on the first page. If the best-selling vendors for products have thousands of reviews, your item will not likely be shown. Ideally, three out of the top ten sellers should have less than 50 reviews.
- Demand: Finding products with low bestselling rankings (BSR) is the tactic here. The lower it is, the more need the product has. A BSR of 1 means the item is the number one seller for that category. To get accurate data quickly, we recommend using a research tool, such as Jungle Scout.
6. Seasonality: It is best to have products that sell consistently all year round. Seasonal products only peaked for a few weeks each year, and then sales slowed significantly. You can use Google Trends to track this.
7. Weight: Lighter items are milder to transport and less expensive than heavy ones. There is no hard rule for this, but most sellers prefer to source items that weigh less than one pound.
8. Listing Quality: One of the best ways to differentiate yourself from your competitors is to create a well-written, high-quality listing. Look at your competitors. If they are doing a poor job with their list, there is a chance you will shine.
9. Image: When it comes to selling online, photos are more important than product descriptions. If shoppers cannot touch products with their hands, they will rely on images to make decisions. If your competitors have poor-quality photos, you can stand out by having high-quality ones.
10. The difference on the first page of search results: If you do a search on Amazon for a crayon, you will see a wall of bestsellers that look alike. They are dominated by big brands, that is why there is no difference. Imagine launching a brand of crayon on a page dominated by Crayola!
Find Potential Top Sellers When Doing Amazon FBA Product Research with Automated Tools
Both free and paid tools allow us to get accurate data on product demand, competition, and profitability without compromising.
We looked at the top Amazon product research tools in the market. In this article, we would like to recommend Amazon FBA Jungle Scout as the best Amazon product research tool. In addition to being astonishingly priced and known for the highest level of accuracy, they also offer several tools for free.
When you use a tool like FBA Jungle Scout, you get access to the entire Amazon catalog and can filter it based on your interests. There is even an opportunity score to help you predict success.
For example, you can create a filter with the following Amazon product research criteria:
- Sales of at least 200 per month
- Product price is as little as 15
- Review score below 4.0
- Products with at least five reviews
Here is an example of how the FBA Jungle Scout user interface looks like:
And here is what you see when taking a search:
From here, you can get a list of about 10,000 products that you can investigate. The next step in the process would be to open Amazon and use the FBA Jungle Scout Chrome extension for more details on the niche.
Doing Amazon FBA product research is an exciting process. You can uncover a product idea that could yield thousands of outcomes per year (or even more).
If you want to get ahead in the competition, we recommend using a tool like Jungle Scout. You will get real-time information about Amazon catalogs, sales data, and even a vendor database that will connect you with vendors based on your niche.
Disclosure: When you purchase a service or a product through our links, we sometimes earn a commission.