Conquering the Amazon marketplace is no small feat. With millions of products vying for attention, finding your niche and ensuring profitability can feel like searching for a needle in a haystack. But there’s a strategic path to discover products with high demand and less competition.
In this guide to Amazon product research, we’ll discuss some proven strategies, cutting-edge tools, and insider tips to help you concur Amazon marketplace.
Understanding Amazon Product Research
The Amazon marketplace presents a big opportunity for eCommerce entrepreneurs. However, understanding its depths requires a strategic approach, and the cornerstone of this strategy is robust product research.
Effective Amazon product research is a data-driven endeavour focused on pinpointing that sweet spot where customer demand is healthy, but competition remains manageable. This sweet spot represents the ideal balance, offering enough volume for profitability without the fierce rivalry often found in saturated markets.
Core Factors in Amazon Product Research
In the Amazon marketplace, achieving success as a seller requires a strategic approach to product research. Let’s understand some of the core factors of Amazon product research:
Demand
Demand is the driving force behind successful Amazon businesses. Without demand, your product won’t gain traction, regardless of its quality or your marketing efforts. To ensure consistent sales and long-term success, focus on these key indicators:
- Daily Sales: A minimum of 10 daily sales suggests consistent demand and the potential for at least 300 monthly sales.
- Best Seller Rank (BSR): Aim for products with a BSR of 5,000 or lower in their main category. A lower BSR indicates higher sales volume and better visibility in search results.
- Keyword Search Volume: Analyse the top 3 keywords related to your product idea. A cumulative search volume of 10,000+ monthly searches suggests healthy demand. However, be cautious of overly high search volume, which can indicate fierce competition.
- Evergreen vs. Seasonal Products: Prioritise evergreen products that maintain consistent yearly demand. While potentially profitable, seasonal products may lead to fluctuating sales patterns and require specific marketing strategies during off-seasons.
Customer Focus
While demand is crucial, it’s equally important to understand your target customer and offer a product that stands out from the competition. Consider these factors:
- Review Count: Products with fewer reviews from 2-3 competitors on the first page of search results often indicate less saturated niches with room for new entrants to establish themselves.
- Unique Selling Proposition (USP): Identify and leverage what sets your product apart – unique features, superior quality, innovative design, or a compelling brand story. A strong USP is essential to attract customers and differentiate your offering in a crowded marketplace.
Competition
Amazon is a competitive battlefield, but you can carve out your niche and thrive with the right strategy. Here’s what to consider:
- Number of Sellers: Keep it with you – fewer sellers often mean less competition. If you see a product category flooded with sellers, chances are it’s a tough market to crack. Instead, seek out niches with fewer players where you can stand out and grab market share.
- Barriers to Entry: This is like your product’s “moat.” Products with higher barriers to entry, such as those requiring specialised knowledge, significant upfront investment, or unique features, tend to deter new sellers. However, this can work in your favour, creating a more stable market with less risk of being overrun by competition.
- Avoiding Big Brands: Going head-to-head with established brands can backfire if you’re relatively new. Big brands often have massive marketing budgets, loyal customer bases, and economies of scale that are tough to beat. While it’s not impossible to compete, it’s an uphill battle. Look for opportunities to differentiate yourself and offer something unique that big brands don’t.
Profitability
It’s not just about making sales; it’s about making profitable sales. Don’t get blinded by high demand if the profit margins are razor-thin.
- Target Gross Profit Margin: As a rule of thumb, aim for a minimum of 35% gross profit margin. This means that for every dollar you make in sales, you keep 35 cents as profit after deducting the cost of the product itself. Ideally, you want to shoot for a higher margin, even up to 60%, to give you more wiggle room for advertising and other expenses.
- Factor in All Costs: Amazon fees can sneak up on you. Don’t forget to account for things like referral fees, FBA fees, storage fees, and shipping costs. SellerApp’s FBA Calculator can help you calculate all the costs, helping you accurately estimate your profit margins.
Additional Product Research Considerations
Seasonality
Seasonality plays a significant role in consumer behaviour and product demand. Some products enjoy consistent sales throughout the year (evergreen products), while others experience peaks and valleys in demand depending on the time of year or specific events (seasonal products). For instance, demand for winter apparel surges during colder months, while swimwear sees a spike in summer.
Size and Weight
The size and weight of your products directly affect your Amazon FBA fees, including storage and shipping costs. Larger and heavier items incur higher fees, potentially affecting your profit margins. Therefore, choosing smaller, lighter products is generally recommended to optimise profitability.
However, there are exceptions to this rule. High-demand, high-margin products like furniture or exercise equipment can still be profitable despite their size and weight if you factor in the associated costs and adjust your eCommerce pricing strategy accordingly.
Gated Categories
Think of gated categories like exclusive clubs on Amazon. Not just anyone can join. These special marketplace areas require sellers to get approval from Amazon before listing products. Categories like fine jewellery, grocery items, and certain beauty products often have extra hoops to jump through.
Legal Restrictions
Before diving headfirst into selling, ensure you’ve done your legal homework. Some products, like electronics or supplements, must comply with specific regulations to ensure safety and quality. For example, if you’re considering selling those cool new headphones, they might need to be certified by the FCC (Federal Communications Commission).
Best Sellers Rank (BSR)
The Best Sellers Rank (BSR) is like a popularity contest for products within their category. The lower the BSR, the more popular the product. Now, you might be thinking, “Why would I want to sell a product that’s already super popular? Isn’t that more competition?” Well, top-selling products often have features and qualities that customers love. Studying them gives you valuable clues about what works in the market.
Product Research Tools
Helium 10
Helium 10 is a comprehensive suite of over 30 tools designed to cater to every stage of an Amazon seller’s journey. For product research specifically, Helium 10 offers several powerful features:
- Black Box: This advanced product discovery tool allows you to filter through millions of products using various criteria, including price, monthly revenue, number of reviews, and more. It allows you to identify high-potential products with ease and efficiency.
- Cerebro: Gain valuable insights into your competitors’ strategies with Cerebro’s reverse ASIN lookup feature. Uncover the keywords they rank for and use this information to inform your keyword strategy.
- Xray: This Chrome extension provides real-time product and keyword data directly on Amazon product pages, empowering you to make data-driven decisions on the spot.
- Market Tracker: Analyse market trends, track competitor performance, and monitor historical sales data to comprehensively understand your niche.
Helium 10’s robust suite, user-friendly interface, and extensive training resources make it an ideal choice for novice and experienced sellers seeking a holistic approach to Amazon product research and business management.
Jungle Scout
Jungle Scout, a pioneer in Amazon product research, has earned the trust of over 500,000 sellers since its inception in 2015. This platform boasts an impressive array of features designed to streamline product research and empower sellers to make informed decisions.
- Product Database: Access a vast repository of millions of products, complete with sales estimates, revenue data, and other key metrics, to identify potential winners.
- Product Tracker: Monitor the performance of your selected products over time, tracking sales, rankings, and other vital indicators.
- Opportunity Finder: Uncover niche markets with high demand and relatively low competition, providing a strategic advantage for your business.
- Keyword Scout: Conduct in-depth keyword research to identify relevant search terms with high search volume and low competition, optimising your product visibility in Amazon search results.
Jungle Scout’s high sales estimate accuracy, seamless integration between its web app and Chrome extension, and thriving community of sellers make it a valuable asset for those seeking a reliable and comprehensive product research solution.
AMZScout
AMZScout offers a budget-friendly yet powerful suite of tools for Amazon sellers. With its extensive product database and lifetime access to the Chrome extension, AMZScout is an attractive option for those seeking value without compromising on functionality.
- Product Database: Filter and search through millions of products using various criteria to find the perfect fit for your business.
- Product Tracker: Monitor product performance and track key metrics to gauge success and identify areas for improvement.
- Niche Hunter: Uncover profitable niche markets with less competition, allowing you to carve out your own space in the Amazon landscape.
- Keyword Tracker and Explorer: Identify high-volume keywords with low competition to optimise your product listings for search visibility.
- Listing Wizard: Streamline your listing creation process with pre-filled templates and optimization tips.
- Stock Stats: Keep track of inventory levels to avoid stockouts and ensure smooth order fulfilment.
AMZScout’s user-friendly interface, comprehensive database, and affordability make it an excellent choice for beginners and budget-conscious sellers who still seek a powerful product research tool.
Viral Launch
Viral Launch is one of the top contenders if you’re looking for a comprehensive suite of tools to tackle every aspect of your Amazon business. Their product research capabilities are impressive, helping you identify hot trends, analyse market data, and even peek into your competitors’ strategies.
- Product Discovery: Viral Launch’s product discovery tool reveals trending products and niche markets you might not have discovered. This can be a goldmine for finding those untapped opportunities.
- Market Intelligence: Market intelligence tools analyse sales trends, estimate potential revenue, and help you understand the competitiveness in your chosen niche.
- Competitor Intelligence: Keep a close eye on your rivals with Viral Launch’s competitor tracking features. See what’s working for them, what’s not, and where you can gain an advantage.
MerchantWords
Keywords are the backbone of Amazon SEO, and MerchantWords is the undisputed champion in this arena. This tool is a must-have if you’re serious about ranking high in search results and driving organic traffic to your listings.
- Keyword Research: MerchantWords boasts a massive database of Amazon search data, allowing you to easily discover high-volume, relevant keywords. They even help you uncover hidden “long-tail” keywords that can increase highly targeted traffic.
- Competitor Keyword Analysis: See exactly what keywords your competitors are ranking for, giving you valuable insights into their strategies and potential gaps you can exploit.
- Market Insights: Analyse keyword trends and seasonality to stay ahead of the curve. This information can help you tailor your product selection and marketing efforts for maximum impact.
Sellics
Sellics offers a comprehensive suite of tools for managing every aspect of your Amazon business, from product research to listing optimization, inventory management, and PPC advertising.
- Product Detector: This handy tool scours the Amazon marketplace to find profitable product opportunities based on your criteria.
- Niche Analyser: This tool provides a detailed assessment of different niches, including their potential profitability, competition level, and market trends.
- Competitor Monitoring: Track your competitors’ sales, rankings, and advertising strategies. Use this knowledge to refine your approach and stay one step ahead.
With its user-friendly interface and comprehensive set of features, Sellics is a great choice for sellers of all levels who want to streamline their operations and maximise their success on Amazon.
Conclusion
The Amazon marketplace is vast and teeming with potential for those who dare to venture in. However, successful product research is only the first step. Once you’ve found your winning product, you need a reliable shipping partner to get it into the hands of eager customers. Here, you can fully rely on the NimbusPost shipping aggregator.
NimbusPost’s AI-powered shipping platform streamlines your logistics process, from inventory management to order fulfilment and delivery. With our extensive network of courier partners and strategically located warehouses, we can help you reduce shipping costs, deliver orders faster, and provide a seamless customer experience.
By partnering with NimbusPost, you’re gaining a strategic ally who can help you scale your Amazon business, expand into new markets, and ultimately boost your bottom line.
