The Ultimate Guide To Amazon Sourcing – PART 1 – Product Criteria

  • Facebook
  • LinkedIn
  • Twitter
  • Facebook
  • LinkedIn
  • Twitter

One of the biggest pain points for anyone who decides to sell on Amazon is knowing what Amazon products to sell.

Source and sell the right product, and you can make yourself a small fortune.

Source and sell the wrong type of product that only your grandma buys, and it’s back to the day job without your products ever selling.

To help you out we decided to make you a little guide on what to look out for when deciding what product to sell online.

In this article, we’ll give you the lowdown on how to pick profitable Amazon private label products for your store.

In part two, we will take a quick look at where to source your products, how to price your products, as well as which tools we recommend to help you pick winning private label products.

Why Choosing The RIGHT Amazon Products Are Crucial

When it comes to selling online, it’s important not to just follow your passion. You may love painted models, but guess what? They might not sell well online!

Choosing the right product is essential to your long-term (and even short-term) success. In order to succeed, you must ensure that a product has sufficient demand.

Product demand
  • Facebook
  • LinkedIn
  • Twitter

How to Ensure Your Product has Sufficient Demand

Knowing that a product has sufficient demand will help prevent you from wasting a heap of money on a product you thought people would love – but in reality they actually hate and doesn’t end up selling!

One of the first easy free ways to do this is to check the top few comparable listings’ product sales ranking on Amazon  –  A low average ranking across the top few listings will indicate that customers actually buy these products and that they are in demand. Simply scroll down the page and look for the additional info box below:

product ranking
  • Facebook
  • LinkedIn
  • Twitter

Remember you want to look for the main parent category listing which in this example which is Home & Kitchen and not any of the other subcategories.

Ask yourself is my product covered by legal patent or trademark copyright rules?

 

  • Facebook
  • LinkedIn
  • Twitter

If your product is copyrighted, trademarked or patented STAY CLEAR! As it often will mean you will not be allowed to sell this product without the owner’s permission!

The easiest way to find out more about US Patents and Trademarks is at the United States Patent And Trademark Office here.

You can conduct US Patent Searches here.

You can conduct US Trademarks here.

The easiest way to find out more about UK Patent and Trademarks is at the UK Intellectual Property  Office here.

While for the UK and EU you can conduct Trademark Searches here

  • Facebook
  • LinkedIn
  • Twitter

s

Ask Yourself is your Product in a Restricted Amazon Product Category?

For first time sellers, it’s important to remember that Amazon is a bit strict when it comes to the type of products you can sell on their marketplace especially when you’re a new seller.

Instead of going out and buying up a truckload of stock right now, it’s important that you first check to see what Amazon will and will not let you sell!

This could save you the hassle of buying a load of stock that Amazon won’t even let you ship in!

This is especially important when it comes to choosing products to sell when you private label or sell through arbitrage.

For example, even though hand creams may be a great profitable replenishable product to private label you won’t be able to sell beauty and health products until you’ve shown Amazon that you can play by their rules and sell in accordance with their wishes. Only then will they allow you to apply and sell in this category

Common restricted categories include:

➤  Health & Personal Care
➤  Beauty
➤  Clothing & Accessories 

For a full list of restricted Amazon.com categories visit Amazon.com here.

Newbies on the Amazon marketplace can only sell in certain categories until you demonstrate to Amazon that you are able to abide by their laws and provide customers with a good customer experience.

Once you demonstrate this, Amazon will allow you to sell in more categories. To find out more about how you can get ungated to sell in these restricted categories feel free listen to my ungating podcast or check out my how to get ungated blog post here.

However, don’t despair! Fortunately, these restricted product categories are not as limiting as it sounds. You get to pick from around 15 categories to start with, and each one offers a few options for flexibility. 

Some of the most popular and easiest selling categories to get started at  the moment include: 

➤  Lawn and Garden
➤  Toys and Games
➤  Home and Kitchen

Products in these categories tend to fly off the shelves like Buzz Lightyear ESPECIALLY in Quarter 4 when sales start to explode in the lead up to Christmas!

  • Facebook
  • LinkedIn
  • Twitter

Next Ask Are there Sufficient Profit Margins in my market? 

When choosing the product you must buy items which have a strong chance of selling AND a good profit margin.

Thankfully, Amazon provides sellers with a range of calculators to calculate the costs associated with selling on Amazon such as the cost of Amazon fulfilment and Amazon storage both long and short term.

Other common costs you need to take into account of include Sales taxes, costs of importation, shipping from the manufacturer and product marketing.

Feel free to check my blog post here to find out more about how to calculate product costs.

As a broad general guide, ideally look for 100% Return on your investment. I.e. if your product total costs are $10 then you would try and look for the product to be selling at least for $20 to leave you with a $10 return.

Too many sellers skip this step at their own peril! If you do, you may just join the myriad of other failed Amazon products and loss-making businesses. 

Don’t end up like them and find out after you have invested all your time and effort made your first sale that after all your costs you have only made a few cents on your product leaving you to wonder if all that time and effort was worth it!

 

  • Facebook
  • LinkedIn
  • Twitter
  • Facebook
  • LinkedIn
  • Twitter

Profitable Amazon Product Criteria

Okay, so you know some of the reasons why you have to sell the right product! We can move on to answering how the frig do you find a profitable Amazon private label product?!

There are a few criteria you need to look closely at especially when starting out:

 

  • Facebook
  • LinkedIn
  • Twitter

Does my Product sell Between $15 and $50?

When selling a product you need to make sure that you have enough margin to pay for marketing or customer acquisition costs and generally speaking if you sell products below $15 (£10) you tend not to have enough room to leave enough profit to make it worthwhile to go to all the effort of researching, importing, marketing and selling your product. 

But on the flipside, as a general rule of thumb, the more expensive a product becomes the more effort required to make the sale as customers become less likely to impulse buy your product. 

We believe it pays when starting out to try and sell a product in the  $15 or $20 product rather than a $50 product as it can be a lot easier to get customers to open their wallets and buy even if all your branding and advertising is not spot on!

Customers will be more likely to think “What the heck, let’s have it right now! It’s only $15!”

Not only this, but the inventory cost of purchasing a $50 product is most likely going to be a lot more expensive than the inventory purchasing cost of a $10 product.

Plus if you misjudge the demand for your higher priced product than the amount of money invested into a lower priced product’s inventory would be a lot less!

Ask: Is there is A Viable Product Market?

Large household brands are your enemy. Are you really going to outsell Sony or Apple? Not a chance!

For this reason, the best idea is to pick a category where there are few – but preferably no big brands in the top product listings.

Big brands generally have larger marketing budgets and an existing well-established brand value with a loyal customer base who it can be hard to steal customers away from! 

For example, if you decide to private label your own electronic shavers you are probably going to have a tough time competing with Braun or Philips!

When starting out type in your product ideas into Amazon or Google and search for a few products. If you see lots of big brands in the top search results, you should avoid this product.

Instead, think about categories like kitchen items and any type of accessories where no real national brand dominance. 

  • Facebook
  • LinkedIn
  • Twitter

Ask Can You Easily Compete With The Other Sellers’ Reviews?

When selling on Amazon you want to be on the first page so people actually browse your product. One of the crucial factors that cause potential buyers to choose your product over a competitors are reviews 

Good Reviews are critical in helping your item rank and extremely important in convincing your potential buyers to choose your product over a competitor. 

The more reviews a competitor has the harder it will be to compete with a competitor. Think about it who would you rather buy from Tony with 1,000 reviews or the same or similar product from Gaz with 1 review? Who would you trust more?

Therefore, try and stay clear of product categories where the top listings have a high number of reviews as it may make it super hard to get a similar amount of reviews to boost your product’s credibility.

Ask Yourself Can You Improve The Product?

On the flipside, browsing a competitor’s poor reviews can reveal insights into the pain points or ways you can improve on an existing product. 

By reading the negative reviews you can quickly learn what customers don’t like and then incorporate those improvements into your product by asking the manufacturer to amend the product, change a 1 pack to a two pack or package it in a bigger bottle etc.

Ask yourself can you brand this product better?

If existing products have dated or poor packaging and branding this can be an easy way to make your product stand out and gain a competitive advantage in the market.

Product demand
  • Facebook
  • LinkedIn
  • Twitter

Is the product perishable, fragile, breaks or damages easily?

If the answer is yes! You may want to avoid this product when starting out!

What can kill you as you start out as an Amazon FBA seller? A few things, but the biggest killer is bad reviews.

A super easy way to get a bad review is to ship an item that arrives at the buyer’s home in pieces.  

To avoid this happening, try to pick simple products that won’t break or damage on their way over from China (or from Amazon’s warehouses).

Instead, choose a product that is durable, contains no moving parts, ideally is not electronic!

Is The product small and lightweight?

The smaller the item, typically the less its weight and the cheaper it should be to ship resulting in less Amazon fees!

Is the Product overly complex or simple to use?

If a product requires an instruction manual to operate it then chances are people may not understand it or be able to work it!

Usually, they will then blame you and end up writing you a poor one-star review!

How We do our Product Research?

Our tool of choice is the  Jungle Scout chrome extension. Why? First let me show you what it look’s like:

How We do our Product Research?

Our tool of choice is the  Jungle Scout chrome extension. Why? First let me show you what it look’s like:

Jungle Scout
  • Facebook
  • LinkedIn
  • Twitter

Jungle Scout enables you to quickly scan Amazon listings to compile all the important Amazon data required to judge product demand, including the sales ranking, 30-Day revenue and sales estimates, ratings and review numbers as well as even the types of sellers who control the buy box on a listing!

What’s even better is that Jungle Scout also allows you to export all this information to Excel or google sheets for further analysis, rather than painstakingly crawling through listings one by one and having to manually input the data!

Jungle scout keywords
  • Facebook
  • LinkedIn
  • Twitter

Jungle Scout also provides you with product keyword analysis which allows you to determine what the relevant keywords are for your product. Saving you loads of time on keyword research analysis.

Google trends
  • Facebook
  • LinkedIn
  • Twitter

We also find Jungle Scout really convenient as it shows you google trend analysis of the latest search trends for your products.

This can help you decide whether a product is an upward or downward trending market.

If you want to find out more or purchase Jungle Scout you can visit their website here.

If there is one thing we strongly urge you to take away from today’s post is that don’t rush the product research stage as if you do, it can lead you to taking all this action for nothing and be a HUGE Waste of Time AND Money!

Believe us when we say this there is nothing worse than spending hours working on your branding, importing your product only for it to sell and you make 30 cents!

Crunch your numbers and ask yourself the questions above! As this will save you time in the long run and ensure that you end up selling a profitable product worth your time!

Google trends
  • Facebook
  • LinkedIn
  • Twitter

Knowing which Amazon FBA products to sell isn’t all that difficult once you have a formula or a checklist.

However, as simple as the “rules” are, they’re also very simple for people to ignore. Don’t fall into the trap of selling something you think will sell well. Instead, let the numbers tell the story!

Use our guide as your rulebook and you’ll be well on your way to getting started as a PROFITABLE Amazon seller. Good luck and join us in part 2 for where to source your products!

Share This