Amazon Advanced Private Label Techniques with Greg Mercer of Jungle Scout
In our recent interview with Greg Mercer the owner of Jungle Scout, we caught up with Greg to get the lowdown on some Beginner and Advanced Private Label techniques that you can employ to crush it when private labelling your next product on Amazon.
David De Souza: Greg what are your main product selection tips for beginners?
Greg Mercer: If you're a beginner, you’ve probably heard how good of an opportunity selling on Amazon is, which it honestly is.
You're thinking, “Okay, where do I begin? I don't have an idea, I don't know what I should sell on Amazon.” I have some great tips and rules of thumbs that I've come up with.
One, you really wanna look for a product that has existing demand on Amazon.
So I speak to a lot of Amazon sellers. I speak to a lot of new or beginner Amazon sellers and, oftentimes, I hear them say
“I have this great product idea. One time, I was looking for this product on Amazon, I couldn't find it, so I'm gonna start selling on Amazon because I'm sure there are other people like me looking for this product.“
I hate to break it to you, but there's probably not much demand for this product that you have in mind on Amazon.
Sure, there's a one percent chance that that could be successful; but why risk it instead when you can just sell things that already have good demand on Amazon?
Rule Number One is existing demand on Amazon. You wanna see that buyers are going to Amazon every day and purchasing this type of product. Otherwise, it's very risky to just go off your gut, so one key factor is existing demand.
Rule Number two is how steep the competition is / how stiff competition is, and a great way to figure this out is just by the number of reviews that your competitors have.
One of the products I sell on Amazon are marshmallow sticks, if I searched for marshmallow sticks, I will look to see how many reviews the top 10 sellers have.
Ideally, you can find a niche or a main keyword opportunity that has multiple sellers in the top 10 with under, let's say, 50 reviews. If I were to search something very competitive like yoga mats, or garlic press, or something like that, I would see the top sellers have thousands and thousands of reviews.
The reason that number of reviews is a good indicator of the amount of competition is that listings with a whole bunch of reviews have a strong sales history.
They've been around on Amazon for a while and it's also very obvious to us that's one of the considerations that Amazon takes into account with their ranking these products for that keyword.
But remember, as a brand new seller, it's gonna be a lot harder for you to rank for these keywords organically if you're getting into one of these very competitive niches.
So while I'm looking for a product that has a strong existing demand, I wanna see something that's not too competitive.
Number Three – You want something with a good margin, so I look for 100% ROI on anything I purchase.
My bamboo marshmallow sticks cost me about four bucks to buy and to ship to Amazon total, so I'm looking to make at least four dollars profit on every one of those units that I sell.
Number Four – Smaller or lighter weight products are generally easier to deal with. There are less headaches. I won't go into all the details about that, but just take my word for it, so it's something that's also good to keep in mind.
Number Five – You also wanna stay away from anything that just has any potential illegal problems, so don't sell an item that has your favourite sports team on it. It's supposed to be licensed and it's not. Don't sell something that's trademarked, et cetera, et cetera.
But yeah, those will be some tips to get your brain starting to think in the right way about what types of products are good to sell on Amazon.
Advanced Private Label Techniques
David De Souza: I know, in some of your YouTube videos, you talk about a criterion that's safe to start with, which we've just addressed.
However, do you have any product selection strategies you recommend for more advanced sellers, perhaps maybe items, with a bit of higher price, with less demand, or higher margins, or maybe oversize items that need to be shipped by sea; but with a higher demand?
Greg Mercer: Yeah, absolutely. You nailed a few of them there.
“Oversize items are generally less competitive”.
Rule Number Six – Generally oversize items are gonna be a little bit less competitive. The reason for that is, like I was saying, the larger the items, the more of just headaches or hurdles associated.
The oversized items are generally less competitive and the reason for that is, with a brand new Amazon seller account, you can only normally store 500 oversize items in their warehouses, so that's a little bit of a headache.
You generally need to ship these products via ocean freight as opposed air shipping then, again, this isn't that hard to do.
There's plenty of resources online and on our blog that explains how to do this, but it's a little bit more difficult than just having these products shipped using FedEx from China straight to the Amazon warehouse.
Rule Number Seven – While oversize items are a good opportunity, probably my favourite opportunity if you're a little bit more advanced or you want a bigger challenge is making improvements on products.
When I say that, I'm not talking about a brand new invention. I'm talking about something that a factory's already creating and you're making small variations or small improvements.
“My favorite Advanced opportunity is making improvements on products”.
An example of this is, right now, I'm doing something called the Million Dollar Case Study.
If you're interested, you can check it out on our blog; but we're publicly launching a product and showing all the steps along the way of what it takes to launch products on Amazon or sell physical products online all the way up to a million dollars of revenue.
The first product we've shown for this case study are hooded baby towels and, with these hooded baby towels, we're reading the reviews of a lot of our competitors.
Something that came across often in the reviews was just that the material was too thin, so I didn't invent the hooded baby towel, right?
There's already a factory in China making these things, but I decided to make a small improvement on the fabric weight measurement.
It's called a GSM, grams per square meter.
All my competitors were 300 GSM and I'm doing 500 GSM, so now our product is 50% or something thicker.
The idea there is hopefully I get all five-star reviews as I I have better reviews than my competitors and therefore it should convert better and sell more than my competitors.
If you're looking for a little bit more advanced or a little more advanced tactic, that's what I really recommend.
Finding these products that are selling well, even though they have some negative reviews.
Read those negative reviews, see where you can improve upon these products, and then make those improvements.
David De Souza: Yeah, I think that's a really great way to take review analysis to the next level and really hit some home runs.
Greg Mercer: Yeah, exactly. This is a longterm, great business model, right? This will never go away, providing a better product at a competitive rate, right?
That's far from a get rich quick scheme, overnight business, that's something that's gonna work really well, even if you listen to this podcast recording five years in the future.
If you want to catch our full interview with Greg make sure you tune into our Amazon Private Label Product Selection Podcast with Greg Mercer here
But for now, if you remember the key takeaways below you should be well on your way to choosing successful beginner and advanced private label products:
➤ Ensure there is existing demand on Amazon for your product.
➤ Use product reviews to determine how stiff competition is or that there is sufficient competition.
➤ Ensure your products have good margins – Ideally look for 100% ROI.
➤ Smaller or lighter weight products are generally easier to deal with.
➤ Avoid copyrighted and trademarked products.
➤ Oversize items tend to be less competitive.
➤ Make improvements on products by finding out flaws in existing products from customer reviews.
Lastly, If you want to speed up your niche product research analysis, then we recommend picking up your own version of Jungle Scout here.