6 Tips on how to get started with good Amazon FBA product research
Anyone who wants to be successful on Amazon must also repeatedly deal with adding new products to their range. However, this poses the same questions for many sellers time and again: What should one pay attention to when researching products for FBA products? And why is the Amazon FBA product research so important at all? To find product ideas that do not become slow movers but rather long-term bestsellers, good Amazon FBA product research is essential. Therefore, you should pay attention to some criteria during the research, such as sales potential. But more on that later.
To assist you with your next research and product selection, we have researched the best tips for you and summarized them in this guide.
Tip 1: How to find inspiration
Actually, you can be inspired everywhere. What sounds so easy is, in reality, difficult to implement. Because finding product ideas at the push of a button is unfortunately not that simple. Therefore, you can give the whole thing a boost.
Go into the city and take a look at what the many knick-knack stores like Nanu Nana, Tedi, etc. are currently offering. And for those who prefer to search right at their own workplace: Look for inspiration on online platforms like Wish or Alibaba. The homepages are full of items that can inspire you during your product search or that you can immediately include in your product portfolio.
Attention: Inspiration is not everything! When selecting products, also ensure that the items you are interested in will be profitable in the long term. How to do this will be explained in the next tips! Additionally, you can also involve Amazon itself in the product research. The online giant automatically ranks offered products based on sales figures. Such rankings exist for every category.
Simply click on the “Bestsellers” field right below the search bar on the homepage. On the left, you will now find a list of all categories. By clicking on the corresponding category, you will reach the associated bestseller rank. In the “Drugstore & Personal Care” category, the hair clipper from Braun leads in March 2020, closely followed by Hakle toilet paper, which is not surprising given the COVID-19 pandemic.
Here you can see another advantage: Because based on the bestseller rank, you can already get a sense of the sales potential during the product search.
Tip 2: How to read the Amazon sales rank
The so-called Amazon Bestseller Rank (or BSR for short) describes how well a product sells compared to other items in the same category. If a product is listed in multiple categories, it has correspondingly many sales ranks. For example, the Braun hair clipper not only has rank 1 in the product category “Drugstore & Personal Care,” but also in the category “Hair Clippers.”
He is therefore sold more frequently than all other products in the two categories. You can find the sales rank in the product description under the designation Bestseller Rank:
But why should you be interested in the bestseller rank during Amazon FBA product research?
On the one hand, it helps to find inspiration as described above.
On the other hand, and this is much more important, you can estimate the sales potential and accordingly the demand for the product.
The Amazon sales rank is updated hourly according to Amazon’s information and is therefore always current. One can thus recognize trends and estimate demand from it. If a product has a good rank, ideally of course rank 1, it means that the product sells relatively well and the demand is correspondingly high.
If you have found a potential item for Amazon FBA during your product research that you would like to include in your portfolio, you can search for the same or a comparable product. If you are selling merchandise, you should search for the same product. This works, for example, via the ASIN. However, if you are selling products under your own private label, you need to search for similar ones. Now you can read the Amazon sales rank to get an idea of the sales situation.
However, there is one disadvantage when you read the Amazon sales rank: While you can see that a product has a comparably high or low sales volume, you need more precise numbers for your calculations, so you should also analyze the Amazon FBA sales figures. How to do this will be explained in the next tip:
Tip 3: How to Analyze Amazon Sales Figures
Unfortunately, hardly anyone will provide you with an analysis of their sales figures. But this is exactly what you need to find products on Amazon during FBA product research that will be profitable in the long term in terms of your margin.
The 999 Method – a simple trick
Click on the product and add it to your shopping cart. Then increase the order quantity to 999. Usually, it will then show you that the seller only has x pieces in stock.
You repeat this procedure daily for a while, for example, for a month. During this time, note the respective stocks. This way, you can estimate how many pieces are sold per day. Unfortunately, this method does not always work, as sellers can set a maximum order quantity, which will be displayed to you when you exceed it.
For those who find this too time-consuming or who would like to delegate this part of the Amazon FBA product research, they can also rely on smart tools. Essentially, they work in a similar way.
With the Sales Radar from ShopDoc, you can spy on other products based on their ASINs, keywords, or seller IDs. For this, sales figures, prices, and revenues are displayed to you. Additionally, you receive average values of all found products during the search, which help to calculate your own sales.
Tip 4: How to Analyze Your Competition
Since we are already on the topic of spying on the competition…
When you sell on Amazon, you will also be in competition with other sellers. Because you are not the only merchant in the entire area, as it was in our grandparents’ time when people only shopped at Aunt Emma’s.
When you introduce a new product, you first need to increase its visibility. This works through sales figures. If Braun and Philips are your competitors, you can calculate for yourself how often customers click on your product, which in doubt may not even have a rating yet.
Large brands should therefore not be among your competitors.
It is therefore important that you keep an eye on your competition for Amazon FBA items during product research and only enter markets where you have realistic chances of competing and achieving a profitable margin.
Tip 5: Serve a Niche
It makes sense if some of your products serve the same niche to choose new items that also fit into this niche. On the one hand, you can rely on cross-selling, offering customers additional products after they have purchased one from you. For example, if you sell wedding invitation cards, you can also offer thank-you cards. This is likely to lead to an improvement in your sales.
Customers will be pleased if both cards are in the same design. This way, you can not only offer product bundles that are unique but also rely on repeat purchases from them. In the case of wedding cards, customers can first buy the invitations from you. After the wedding, they will look for thank-you cards and will find them with you again. Since they had a good experience during their first purchase in your shop, they have built trust in you and will buy from you again.
Furthermore, you can become the expert in this niche.
Especially in the case of more specialized areas like aquaristics, it is advantageous if you have in-depth knowledge that you can apply in the product description and in customer communication. You can find a suitable niche through your own experiences. Perhaps you have previously worked in a pet store in the field of aquaristics. It makes sense that you can shine with your expertise in this niche with your online shop. This means for your Amazon product research that you should look for products from this category.
However, this does not mean that you should focus exclusively on a single niche during Amazon FBA product research. Because this also means that you are completely at the mercy of market fluctuations and cannot compensate for a potential drop in demand with products from another niche.
Tip 6: Adhere to Additional Criteria for Good Products
What actually makes a good product? Of course, it should be in demand and have sales potential. But that’s far from all.
A good product is small and light, as this minimizes shipping and storage fees. It makes sense to consider the fees for Amazon FBA during product research, as fees increase with weight and size. With the current price increase of FBA fees, this becomes even more relevant, as large and heavy products are more affected than small and light ones. Products weighing up to a maximum of one kilogram are recommended. So keep FBA regulations in mind during product research.
Since we are already on the topic of shipping: The products should preferably not be fragile or sensitive, as they are exposed to potential “dangers” during all delivery processes. A smartphone case is not greatly affected if the package falls. However, a porcelain vase is much more so. If products break on their way to the customer, there is no way around a return, which in turn adds to your costs, as you have to replace the product and invest in good customer support to make the rightly upset customer happy again.
In general, it is advisable to focus on goods that are returned less frequently during Amazon FBA product research, as this can save you costs. While a lot is returned in the fashion sector, your chances of a low return rate are better in the drugstore category.
Additionally, products should be inexpensive to purchase. After all, you also want to have a piece of the profit pie. The purchase price should be a maximum of ¼ of the selling price. Because in addition to the costs for the item itself, there are also costs for storage, packaging, and possibly customs. The more expensive your products are to purchase, the more likely it is that your margin will decrease. For your pricing calculation, you can also rely on smart Repricer for Amazon. Here you can simply enter the purchase price and a desired margin. The algorithm calculates the additional costs and thus determines a profitable final price for you.
With a low purchase price, you can also set a low selling price, which in turn encourages impulse purchases. Especially in the price range of €15 to €50, many purchases take place on Amazon.
To avoid being exposed to strong fluctuations in demand, you should focus on products that are not seasonal.
The hair clipper from Tip 1 is suitable for this, as hair is cut in every season. Flower seeds, on the other hand, have only a very short period during which they are exposed to high demand. Depending on the seeds, sales are influenced by the season, but most are primarily in demand in spring when the gardening season finally begins.
Lastly, one question: Why is good Amazon FBA product research important at all?
The answer is quite simple: You do not want to add products to your portfolio that simply do not yield a profit or may even lead to losses. This can have various reasons: Perhaps there is no demand for the product. Or maybe the competition or the costs for shipping and delivery are simply too high.
That is precisely why it is essential that you pay attention to all possible difficulties during Amazon FBA product research that could disrupt your sales later on.
Image credits in the order of the images: © WrightStudio – stock.adobe.com / Screenshots @ Amazon
