Unveiling the Secrets to Successful Amazon Product Research

As an Amazon seller, mastering the art of product research is key to unlocking better sales and ensuring your success in this competitive online marketplace. Understanding the needs and preferences of Amazon customers is at the heart of this process. Typically, customers flock to Amazon seeking products that are either more affordable than what they find in physical stores or that are unavailable locally. As a savvy seller, your focus should revolve around offering products that align with these desires.

However, that’s not all – keeping a watchful eye on what products are currently trending and selling well on Amazon is equally vital. By analyzing the success of such items, you can identify potential winners and make informed decisions about your product selection. Remember, success on Amazon lies in catering to the demands of your target audience while leveraging market trends to your advantage.

To maximize your chances for triumph, our blog dives deep into the essential factors you need to consider during Amazon product research. By carefully examining these criteria, you’ll be well-equipped to discover that golden product opportunity that promises both profitability and customer satisfaction. Get ready to embark on a journey to unveil the secrets to thriving in the ever-expanding realm of Amazon sales. Let’s explore the world of product research together!

Market demand:

This is a critical aspect of Amazon product research as it directly influences the potential for sales and success in the marketplace. To identify products with high demand, sellers can employ various tools and methods. One such tool is Amazon’s Best Sellers Rank (BSR). The BSR is a ranking system that indicates how well a product is performing in terms of sales compared to other products in its category. A lower BSR number implies higher sales volume and popularity.

When analyzing the BSR, a general guideline is to target products with a BSR under 1000. A BSR under 1000 signifies that the product is among the top-performing items on Amazon, indicating substantial demand and sales.

However, it’s important to consider that the ideal BSR threshold may vary depending on the product category and niche. Some categories might have higher BSRs due to more significant competition, while others may have lower BSRs with fewer competitors.

Hence, sellers should contextualize the BSR within their specific niche to make informed decisions.

In addition to the BSR, another valuable tool for assessing demand is Google Trends. Google Trends allows sellers to analyze the search volume of specific keywords related to the product over time. By examining the historical trends, sellers can gain insights into the product’s sustained popularity and demand.

A rising trend in Google searches for a particular product or category suggests increasing interest among consumers, which can be an excellent indication of high and sustained demand. Conversely, a declining or stagnant trend might suggest a decrease in interest or a seasonal product.

By combining data from Amazon’s BSR and Google Trends, sellers can develop a comprehensive understanding of a product’s demand and potential for success on the platform. This information allows them to make informed decisions on which products to sell and invest their time and resources in those with the best chances of yielding profitable results.

Competition:

Assessing the level of competition for a chosen product is crucial to determine the feasibility of entering a particular market on Amazon. Tools like Our In house Software provide valuable insights that help sellers make informed decisions about their product selection. Here’s a more detailed explanation of this process:

Number of Sellers:

Our In house Software allows sellers to see how many other sellers are offering the same or similar products in a specific category. A high number of sellers indicates a competitive market with many established players. Entering such a market may be challenging, as you’ll need to find a way to stand out from the competition to attract customers.

On the other hand, if there are fewer sellers offering the product, it suggests a less competitive landscape. This might present an opportunity for you to gain visibility and capture a significant share of the market.

Average Selling Prices:

Our In house Software also provides information on the average selling prices of products in the category. Understanding the pricing landscape is essential for pricing your own product competitively. If the average selling price is relatively high, it may indicate that customers are willing to pay a premium for the product, which could result in better profit margins.

However, if the average selling price is low, it might indicate intense price competition, and it could be challenging to maintain profitability unless you can differentiate your product or reduce your costs.

Product Reviews:

The number of product reviews on Amazon gives an indication of how established the competition is. A high number of reviews could suggest that certain sellers have been in the market for a while, making it more difficult for new sellers to compete.

Additionally, analyzing the content of the reviews can provide insights into customer preferences and pain points, which can help you improve your product or identify unique selling points.

Ideal Approach:

When choosing a product to sell on Amazon, the ideal approach is to strike a balance between demand and competition. While low competition might seem attractive, if there’s not enough demand for the product, it may not lead to sufficient sales. Conversely, targeting a highly competitive market with strong demand could be challenging for a new seller.

Ideally, look for products with reasonable demand and a manageable level of competition. This way, you can position your product effectively and have a better chance of ranking higher in search results, attracting customers, and generating sales.

Overall, Our In house Software and similar tools provide valuable data and insights to help sellers make data-driven decisions during Amazon product research. Evaluating competition is a critical step in identifying a niche with good potential for success and profitability.

Price and Profitability: 

Calculating the Cost of Goods Sold (COGS) is a fundamental step in Amazon product research and is essential for determining the viability and profitability of a product. Helium 10 is a popular tool that can assist sellers in accurately estimating the COGS and making informed pricing decisions. Let’s elaborate on this process:

Cost of Goods Sold (COGS):

COGS refers to the total cost incurred to produce or acquire the product that you plan to sell on Amazon. It includes several components:

1. Product Cost: The actual cost of manufacturing the product, which involves expenses such as raw materials, production labor, and manufacturing overhead.
2. Shipping Costs: The expenses incurred to ship the product from the manufacturer to your fulfillment center or directly to Amazon’s warehouses.
3. Packaging Costs: The cost of the packaging materials used to prepare the product for shipping.
4. Import or Customs Duties: If you are sourcing products internationally, customs duties and import taxes may be applicable.
5. Any Other Direct Costs: Additional expenses related to the production or acquisition of the product, such as labeling, barcoding, or quality control.

Selling Price and Profit Margin:

After calculating the COGS, you need to determine the selling price for your product on Amazon. To ensure profitability, the selling price must cover all expenses involved in bringing the product to market and leave you with a reasonable profit margin.

The profit margin is the difference between the selling price and the total cost of the product (COGS + other associated costs). The profit margin should be sufficient to cover not only the cost of goods but also various other expenses, such as Amazon seller fees, advertising costs, and any other overhead costs related to running your business.

Average Return Rate:

It’s crucial to consider the average return rate for your product category. A higher return rate can impact your profitability, as returns can result in additional costs for processing, restocking, and potentially reselling returned items as open-box or refurbished.

A product with a high return rate may lead to potential profit losses, so it’s essential to either address the reasons for returns (such as improving product quality or addressing customer complaints) or factor in the potential losses when calculating your profit margins.

Elaborate Research:

Performing comprehensive research using tools like Helium 10 will give you a clear understanding of the total cost involved in selling a particular product on Amazon. By considering all the components of the COGS, setting an appropriate selling price, and accounting for the average return rate, you can create a solid financial foundation for your Amazon business.

Moreover, it’s crucial to regularly monitor and update your cost and pricing calculations to account for any changes in manufacturing costs, shipping fees, or other expenses that may impact your profit margins over time.

In summary, meticulous calculations of COGS, setting competitive selling prices, and factoring in the average return rate are key to ensuring your Amazon business remains profitable and sustainable in the long run.

Weight and Size: Considering the weight and size of the product is a crucial aspect of Amazon product research, especially when it comes to calculating shipping costs and determining the overall competitiveness of the product on the platform. Here’s a more detailed explanation:

Shipping Fees and Fulfillment:

Amazon charges shipping fees based on the weight and dimensions of the product, as these factors directly influence the cost of shipping and handling. Heavier and bulkier products typically incur higher shipping costs due to the increased resources required for transportation and packaging.

When selling on Amazon, sellers have two main fulfillment options:

1. Fulfilled by Merchant (FBM): With FBM, sellers are responsible for handling the shipping and fulfillment process themselves. They have more control over shipping costs but need to factor in the expenses when pricing their products.
2. Fulfilled by Amazon (FBA): FBA allows sellers to store their products in Amazon’s fulfillment centers. Amazon handles the picking, packing, and shipping of orders. However, FBA incurs additional fees, including storage fees, fulfillment fees, and long-term storage fees, which are influenced by the product’s size and weight.

Impact on Competitiveness:

The weight and size of the product can significantly impact its competitiveness on the platform. Here’s how:

1. Shipping Costs for Customers: Customers often consider shipping costs when making a purchase decision. If your product’s shipping costs are significantly higher than competing products, it may deter potential buyers and reduce your competitiveness.
2. Buy Box Eligibility: The Amazon Buy Box is the primary call-to-action button on a product listing, and winning the Buy Box is essential for driving sales. However, Amazon takes shipping costs into account when determining Buy Box eligibility. If your shipping costs are high due to a heavy or large product, you might have a harder time winning the Buy Box against sellers with lower shipping costs.
3. FBA Advantage: Utilizing FBA can give your product a competitive advantage, especially if you are selling a heavy or bulky item. Amazon’s extensive logistics network can often provide more affordable shipping rates than individual sellers can achieve on their own. Additionally, FBA often offers Prime eligibility, which can attract more customers and increase conversion rates.
4. International Shipping: For sellers offering international shipping, the weight and size of the product are even more critical, as international shipping costs can be considerably higher. This may impact the product’s appeal to international customers and influence its market reach.

Elaborate Research:

When conducting Amazon product research, it’s essential to carefully evaluate the weight and size of the product to understand its impact on pricing, fulfillment options, and overall competitiveness. Depending on your business strategy and budget, you can choose to offer products with varying dimensions and weight to optimize shipping costs and appeal to a broader customer base.

Furthermore, it’s vital to stay informed about Amazon’s shipping policies and any changes to fees and dimensions that might affect your product’s profitability. By factoring in shipping costs from the early stages of product research, you can make informed decisions about product selection, pricing, and fulfillment to ensure a successful and profitable venture on the Amazon marketplace.

Branding Potential: Choosing products with branding potential is a strategic approach for sellers who aspire to build a recognizable and successful brand on Amazon. Building a brand involves creating a distinct identity and reputation for your products, which can lead to various advantages. Here’s a more elaborate explanation:

Branding and Brand Identity:

Branding is the process of establishing a unique identity for your products or business in the minds of consumers. It goes beyond a mere logo or product name. A strong brand identity encompasses the values, personality, and reputation associated with your products.

Consumer Trust and Loyalty:

Brands with a strong identity tend to earn trust and loyalty from consumers. When customers have positive experiences with a particular brand, they are more likely to become repeat buyers and advocates, promoting the brand to others through word-of-mouth.

Premium Pricing:

A well-established brand often has the ability to command premium pricing for its products. Consumers are willing to pay higher prices for products from brands they trust, as they perceive them to offer better quality, reliability, and customer support.

Differentiation and Competitive Advantage:

In a competitive marketplace like Amazon, where countless sellers offer similar products, building a brand sets your products apart from the competition. It provides a unique selling proposition and differentiates your offerings from generic or unbranded alternatives.

Expanded Product Lines:

A successful brand can open opportunities to introduce new product lines or product variants. Consumers who trust a brand may be more willing to try out new products from the same brand, expanding your market reach.

Protection Against Price Wars:

Brands that have established a loyal customer base are less susceptible to price wars. While generic products might engage in aggressive price-cutting to win sales, a brand’s reputation allows it to maintain its pricing integrity.

Emotional Connection:

A strong brand can create an emotional connection with its customers. This emotional bond can lead to more meaningful and long-lasting relationships, making customers feel like they are part of a community or lifestyle associated with the brand.

Repeat Business and Sustainable Growth:

Brands that prioritize customer satisfaction and loyalty tend to enjoy repeat business, leading to sustainable growth over time. This stability allows brands to weather market fluctuations and changes in consumer trends.

Case Study: Apple

Apple is a prime example of a company that has successfully built a strong brand identity. It is known for its innovative, premium, and user-friendly products. As a result, consumers are willing to pay a premium for Apple products compared to generic alternatives. Apple’s brand loyalty and reputation for quality have helped it become one of the most valuable companies globally.

Elaborate Strategy:

When conducting Amazon product research, identifying products with branding potential requires careful consideration of various factors, such as uniqueness, quality, packaging, and customer experience. Investing in branding efforts, such as creating a compelling product story, engaging marketing, and exceptional customer service, can help cultivate a brand identity that resonates with consumers.

By selecting products with branding potential and executing a well-thought-out branding strategy, sellers can position their products as valuable and trusted options in the marketplace, paving the way for long-term success and growth as a recognized brand on Amazon.

Amazon Restrictions: Ensuring that the product you choose complies with Amazon’s policies and is not restricted is a critical aspect of selling on the platform. Amazon has specific guidelines and rules that sellers must adhere to, and failure to comply can result in account suspension, product removal, or legal consequences. Here’s a more detailed explanation:

Amazon’s Policies and Guidelines:

Amazon has a set of seller policies and guidelines that cover various aspects of selling on the platform. These policies encompass product quality, safety, customer experience, and fair competition. Some essential policies include:

1. Prohibited Products: Amazon prohibits the sale of certain items, such as illegal drugs, firearms, hazardous materials, and products that violate intellectual property rights.
2. Restricted Products: Certain products have restrictions or require approval from Amazon before they can be sold. This includes items like electronics, medical devices, and dietary supplements.
3. Product Listing Requirements: Sellers must accurately represent their products and provide clear and complete product information, images, and descriptions.
4. Counterfeit Products: Selling counterfeit items is strictly prohibited on Amazon and can lead to severe consequences, including account suspension and legal action.

Intellectual Property Rights:

Sellers must respect intellectual property rights, including trademarks, copyrights, and patents. They should not use images or product descriptions that infringe on the rights of others.

Product Safety and Quality:

Amazon places a high priority on ensuring the safety and quality of products sold on its platform. Sellers must comply with relevant safety standards and regulations, especially for items like electronics, toys, and children’s products.

Country-Specific Regulations:

Sellers must be aware of country-specific regulations and compliance requirements, especially if they plan to sell products internationally.

Elaborate Research and Due Diligence:

When choosing a product to sell on Amazon, it’s crucial to conduct thorough research and due diligence to ensure compliance with Amazon’s policies and legal requirements:

Product Category Research: Familiarize yourself with the specific policies and requirements related to the product category you plan to sell in. This information can usually be found on Amazon’s Seller Central or help documentation.

Check Restricted and Prohibited Lists: Review Amazon’s lists of restricted and prohibited products to verify that your chosen product is allowed.

Verify Intellectual Property Rights: Ensure that your product, branding, and product listings do not infringe on the intellectual property rights of others.

Consult Legal Experts: If you have any doubts or concerns about the legality of the product you plan to sell, consider consulting legal experts or professionals who specialize in Amazon selling.

Stay Updated: Amazon’s policies and guidelines may change over time. Stay informed about any updates or policy changes to avoid potential compliance issues.

By conducting thorough research and ensuring compliance with Amazon’s policies, you can build a reputable and successful business on the platform while providing a positive experience for customers. Being a responsible and compliant seller not only protects your business but also helps maintain the overall integrity and trustworthiness of the Amazon marketplace.

Additional Tips:

Utilize multiple sources of data, such as Amazon, Google Trends, and Our In house Software, to gain a comprehensive understanding of the market.

Stay updated on the latest trends to identify products likely to experience sustained demand.

Be patient and persistent during your research, as finding a successful product may take time.

By carefully evaluating these criteria and staying informed, you can enhance your chances of finding a lucrative product to sell on Amazon.

To be a successful Amazon seller, it is important to research your products carefully before listing them for sale. By taking the time to understand the demand for a product, as well as its potential competition, you can increase your chances of making a sale. In addition, by keeping abreast of Amazon’s ever-changing rules and regulations, you can avoid costly mistakes that could jeopardize your selling privileges. By following these simple research tips, you can become a successful Amazon seller.

NB: You can take help from industry expert at EvoTech