Amazon Product Research The Ultimate Step by Step Guide

How to do Amazon product research in 2021 – Ultimate guide

Experienced Amazon FBA sellers make you feel as though selling on Amazon is an easy task, with their positive reviews and statements.

However, the truth is, even though it is a good source of income, you need to devote your time and resources at the very early stages to become an established Amazon FBA seller. You need to analyze your market and know your customers. You need to put hours in research to get a list of potential products to sell.

Becoming an Amazon FBA seller is not easy, and many tend to fail due to adopting poor marketing strategies or poor product research. Some give up when they don’t earn a good profit-margin from their products, others switch over to other businesses.

Once you setup your seller account on Amazon, the first crucial step towards a successful Amazon FBA business is finding the right product to sell on Amazon. With modern technology influencing every sector of the industry, there are many tools available online that will help you find the right product.

Product Research is one of the key components of an Amazon FBA business. With the right tools, you can find the perfect product to sell on Amazon.

So let’s get into Product Research and help you think outside the box to find the right product for you to sell on Amazon.

Why do Amazon Product Research?

I know what you are thinking, why do Amazon Product Research? One of the most crucial parts of setting up a successful Amazon FBA business is to find the perfect product to sell. This is a very mundane task and requires significant time.

You cannot start selling any product on Amazon and expect it to be a success. Most Amazon FBA businesses fail due to poor management or bad product research.

You need to carefully analyze the various trends of different products, check their profit margin, consider different costs, and then come up with a list of products that are suitable for you.

Successful product research will help your business start in the right direction and your very first product may become a success on Amazon.

Many of the top sellers in the market adopt various product research strategies to launch their line of products on Amazon. Even the top sellers need research before launching a product or else they could end up in loss.

What is Amazon Product Research?

As the name suggests Amazon product research is all about researching the products on Google and various other eCommerce websites to find the ‘perfect product’ to sell. It’s generally analyzing the current market trends, and decide the product that will yield the highest profit margin.

Finding a ‘winning product’ is not an easy task. You need to do considerable research and analyze various factors to decide the sellers, shipping and much more.

You need to perform an effective market analysis to decide which product is suitable for the market. Amazon FBA selling is just like any other business, so you need to do something different from your competitors in order to become successful.

The idea of product research is to find a product that you can get for less value and sell for a higher profit margin. You need to find products that ensure a good return on investment so that you can make Amazon FBA as your primary business.

Since product research is one of the most important factors for an Amazon FBA business, let’s have a look at a guide on how to perform an Amazon Product Research.

Step 1: Type of Amazon Seller

There are mainly 3 types of Amazon Sellers – Professional Seller, Amazon FBA seller, Amazon Vendors. Before you start looking for products, you need to choose the type of seller you want to be registered on Amazon. Based on the type of seller, you have various FBA fees and other charges to be paid to Amazon. There are various pros and cons of selling on Amazon. .

Professional Seller

If you can sell more than 40 items per month, then a Professional Seller account is advisable for you. You need to pay $39.99 plus additional shipping and referral fees as a Professional seller.

Being a professional seller has its own benefits. There are some categories that are restricted to other sellers and need approval before listing, but as a professional seller, you can sell in these categories.

Professional seller accounts also have access to Amazon Seller Central. This platform helps you control pricing and manage inventories. You will have access to inventories, reports and some customer data.

Amazon FBA Seller

Fulfillment by Amazon(FBA) is available for both individuals as well as professional sellers. Becoming an FBA seller requires you to pay extra charges for fulfillment fees, storage fees as well as referral fees.

Fulfillment by Merchant(FBM) is also available for individuals as well as professional sellers. For FBM, you only need to pay the referral fee as the seller will take care of storing and shipping the items in the inventory. The sellers are in complete control here.

Amazon Vendors

Amazon Vendor Central will make Amazon the exclusive distributor of your products. You can sell the products directly to Amazon and they will take care of the rest.

This seller tag is only available by invitation. The seller can put up products for selling and Amazon will pick them up in bulk every week.

Step 2: Product Criteria

To choose the ‘winning product’ you need to go through certain criteria. Once you know these criteria you can decide your product finally. Let us have a look at the important criteria for product selection.

Price

The fundamental need for product research is to find a product that has a high selling price so that you can get a high return on investment.

The higher the selling price, the higher the margin you make. Products with at least $10 will provide you a basic margin. Products with a selling price of above $50 dollars have lesser conversion rates.

Constant or Increasing Demands

You can look for products that are in constant demand from any category. If you can list the products that are high-selling, you will notice the rise and fall of products and ones that are on a constant rise.

The easiest method to see if there is a demand for the products is to head over to Google Trends and perform your research. You could also use various online product research tools and analyze the demands.

Choosing the in-demand products is a safe choice and choosing a product that is just increasing in demand is a positive prediction.
You could also check the trending products page on Amazon to check out the hot and trending products. Looking at these products you can get a vague idea of the in-demand products.

Less or No Competition

Any product that is being sold on Amazon has a list of sellers or a group of sellers. If you can find a product that has few sellers, then there is a higher chance for you to be successful with that product.

Products having few sellers will tend to have fewer reviews on Amazon, and are also a good pick for the ‘winning product’ given that they are in demand.

High-Profit Margin

While selling a product on Amazon, you need to keep a close track of the margin; the investments you make, the selling price, and the return on investment(ROI).

If you cannot earn a good profit margin, then you cannot compete with your sellers to provide discounts and increase your investments.

Further reading: The true cost of selling on Amazon FBA.

Believe in the product

To choose the right product to sell on Amazon, you need to believe in the product. You should preferably choose a product that you are interested in selling or passionate about.

Unless you are confident about the product making sales, you will not be happy with the Amazon FBA business.
Have Product B, C, and D
There are chances that your initial product may not be a huge success. So you need to plan ahead, what are the other products that you can sell so that you can move on from the failure of one to the potential success of another.

You could sell various products from the same category or even products of the same brand to have a guarantee of sales.

Step 3: Niche Selection

With many modern FBA software tools such as Jungle Scout, you can use their specific tool known as the “Niche Hunter”, which will help you decide the perfect product niche for you.

You can search for specific keywords in various marketplaces and categories, and the results will contain a list of products with various details about them such as demand, sellers, reviews, ratings and much more.

Step 4: Opportunity Hunting

JungleScout provides a feature known as “Opportunity score“, which gives you an idea about the feasibility of the product in the market.

You can also use the “Listing Quality Score” to identify the products with high demand, but bad product listing.

Opportunity hunting is also checking for the products that are in demand but not at the top of the in-demand list. The products that are in the middle of the list would be great opportunities.

Step 5: Contacting Suppliers

If you do not want to manually research on the internet, you can also opt for contacting the suppliers as a customer to obtain some information about the products.

You could pretend to be a potential customer and ask the suppliers for samples, some seller information, or product information.

This is not a complete fool-proof method as you need to get the information from the sellers in a way without being suspicious.

Step 6: Check your Margins

The success of finding a ‘winner product’ to sell on Amazon highly depends on the margin you make. The easiest way to calculate your margin is –

● To assess the cost price
● Consider the storage and shipping and other handling charges
● Reduce the various Amazon charges such as FBA
● Compare with the selling price

Once you go through the above steps, you will have calculated your margin. If you can potentially decide a product with a higher margin that is in-demand or has a good chance of being in-demand, then chances are that the product can potentially be the ‘winner product’ for you.

Need for Product

Instead of starting with a product or a set of products, you can look for a basic category of products to sell. If you can cater to specific needs or demands, or solve specific problems of people, then such products will be a ‘winning product’. To find out the right product category you need to look at three things –

1. Needs

If you are inclined towards fulfilling the needs of the customers, you can research products that fulfill the specific needs.

Physical Needs – After hours of product research, you may have ended up on certain products that cater to the needs of a group of people. For example, there is a high demand for insulin pumps for diabetic people, such products are categorized under physical needs.

Utility Needs – There are many products that cater to the day-to-day needs of the customers. Such products tend to stay in demand and help sellers earn a good profit margin.

2. Demands

You can search for keywords in your niche to ensure that they have a decent search volume. If your product is searched for, a lot, and there is very little or no competition as a seller, then the product demands are not met and you can flourish selling that product.

It is advisable to research about products that are in demand and are expected to stay in demand in the future to ensure that you earn a good profit margin for selling such products.

3. Solutions

Once you find the product, make sure it helps solves the customer’s problems. If your product can do this, then its demand will increase automatically.

There are many products available online that solve many problems, but people are unaware of them.

Good product vs Bad product

The product being good or bad depends on several factors.

• High-profit margin from the sales.
• Amount of competitors for the product. It is advisable to find a product with little competition.
• If you try to sell in categories that are dominated by the big brands then you will have a hard time becoming successful in that category.
• It is preferable to find products that are in high demand and have few reviews and fewer sellers on Amazon.
• A bad product on Amazon will have a bad listing. They might have poor customer reviews, poor sellers, and very little or no demand.

Since you need to find a good product for your Amazon FBA business, here are some factors to look out for –

Retail Price

If the product you want to sell is priced between $10-$50 USD, then there is a higher chance for the product to be sold. Products higher than $50 have very low conversion rates.

Non-seasonal

Many of the products that you see on Amazon are seasonal. There are many users who only purchase from Amazon during certain sales or specific seasons. Such products are not ideal for a thriving Amazon FBA business.

Fewer Reviews

It is preferable to choose products with reviews fewer than 200. Such products have very few sellers or fewer sales. Products with less than 100 reviews can also be targeted.

Small and Lightweight

The smaller and lighter the product is, the lesser the shipping costs are, and easier to pack them. There are various products that come under these criteria and are in great demand. Some of these products are labeled for daily use.

Easy to manufacture

If the products that you are looking to sell can easily be manufactured, then there are lesser risks and shipping costs to handle. Products like TVs, mobiles, laptops and other such appliances are difficult to handle and have higher shipping costs.

How to Find a Quality Product to Sell on Amazon FBA?

Throughout the course of this article, you may have noticed that finding the right or best product to sell on Amazon FBA is a difficult task. It might take hours of manual research and lots of spreadsheets to get a list of potential products.

With modern technologies and various automation tools, you can use the best tool to find a couple of good products to sell on Amazon, and become a successful Amazon FBA seller. There are various online tools like JungleScout, Helium 10, Viral Launch, Sellics and much more that help make your product research easier and faster.

1. Speed Of Reviews Per Month

As the name suggests, this is the rate of which reviews come in every month. If there are many reviews coming in, which can only mean one thing, many people are buying the product and they are either complaining about it or not satisfied at all. If there are fewer reviews or a lot of bad reviews coming in per month, then you can compete with them easily by providing better products.

2. Quality Of Reviews

All reviews may not be good, there might be good as well as bad. Depending upon the quality of the reviews, you could compete with the sellers to provide better products in that sector.

3. Number Of Reviews

A lot of reviews directly imply that there is a decent amount of customers for the product(in-demand product). Such a product is good for sale and shows good demand.

If there are a lot of good reviews then the seller is probably ruling in that sector, whereas bad reviews show signs of improvement in customer service. Let’s not forget Amazon has been known to delete reviews, so take this with a pinch of salt. 

4. Age Of Listing

If the products were listed long ago, then they are probably not in demand now or have lost the support of the seller. Not all products have a long period of demand, most of the products lose their sales within a couple of months.

5. Market Depth

If the products are of a single product brand, then you probably won’t have a high margin selling them as you have high competition.

If it’s a multiple product brands, you can switch over to the products that aren’t sold well.

You also need to assess the market of these products to decide if its the right product for you.

6. Listing Quality

Having a high listing quality score or LQS can mean the seller who has listed the product is one of the top-rated sellers, then you do not want to compete with them. They can easily put you out of business if you try to sell products that the top-rated seller sells.

7. Sales (Last 60 Days)

You need to analyze the sales from the last 60 days of the product to see whether there is any increase or decrease in demand.

8. Revenue (Last 60 Days)

If the top sellers make good revenue from the product in the last 60 days, then you may also have good chances of earning good revenue. You could use several online FBA tools to track the product for future sales for any period of time.

9. Who Is Selling (AMZ/FBA/FBM)

You can find the type of Amazon sellers, who the top-sellers are and check the revenue they make in that category. If it looks promising, you can become a seller of that category.

Based on the type of seller you could check the margins they make even after the Amazon fees. This can help you decide what type of seller that you want to be on Amazon.

10. PPC Cost

The PPC cost of a product is the conversion rate for that product. Generally, every product on Amazon has a 10% conversion rate. It is advisable to find a keyword for your product that provides a PPC of less than 25% of the price of the product.

A more specific keyword has lesser PPC whereas the broader ones have higher PPC. PPC is a deciding factor for listing your products on Amazon.

11. Product Weight

You can inquire about the average product weight of the sales of a top-seller to have an idea of the weight of the product that you can sell. You could also use various product research tools to find out the average product weight.

12. Product Selling Price

Once you know the selling price of your competitors you can compete with them by selling at a lower price whilst earning a good profit margin. This is one of the easiest ways to beat your competition.

13. Price Consistency

If there is an increase or decrease in the price of the product, it can mean that there is less demand or more demand for the product.

14. Number Of Sellers Under Listings

If the product already has a good amount of sellers then it will be hard for you to compete with them. The lesser the competition the higher the chances of you coming out on top.

15. Seasonal

There are sellers who make good sales during seasons. For example, during the world cup – there will be a great demand for jerseys, so sellers can sell jerseys at a considerable rate and people will buy them.

16. FBM Hazmat

A Hazmat has to be submitted for the set of products that are declared dangerous to store and deliver. It could be the daily use of products such as laptops and mobile which have a slight chance to explode and put people as well as resources at high risks.

17. Restricted

If the top sellers are professional sellers, then there are chances that they have access to restricted categories.

18. Gated

Gated or professional Amazon sellers have access to sell in the ‘gated‘ or ‘restricted category’. They have to go through a process and request for approval.

19. Cash To Compete

You can estimate the amount of investment that the top sellers put in to successfully run their Amazon FBA business. So to compete with them, you need to invest a similar amount and invest wisely.

20. FBA Calculator /Profit Margins

After considering the cost of buying the product, packaging and shipping, and the selling price, you can calculate the profit margin that you will make on a product.

If that margin is high enough, with increasing sales, you can make a good amount of revenue.

21. Keyword Search Terms Per month

The products being sold by the top sellers will have specific keywords. You need to monitor the frequency of the keywords being searched in a month using various online Amazon FBA keyword tools.

22. Product Size

You can have a look at the size of the products that the top-sellers are selling to have an idea of the average product size that you can sell to have a good conversion rate.

Advanced Tools

With multiple online automated Amazon FBA keyword tools being used, Amazon FBA sellers have started to use them and highly prefer them to the manual approach.

1. Jungle Scout

Jungle Scout is an online Amazon product research tool. There are many tools integrated with JungleScout to help find the perfect tool for you. You could use the Product Research tool and analyze various factors of the product such as price, demand, rating, weight and much more.

After you find the potential products, you could use the Product Tracker tool to keep a close eye on the product for a certain period of time. You could analyze the sales and reviews that happened during that time.

You could use a Niche Hunter to find the perfect niche for your Amazon FBA business. You could search for the keywords and get a lot of product results. Read our full Jungle Scout review here.

2. Helium 10

Helium 10 is one of the most powerful tools on the market when it comes to keyword research.

3. Ahrefs Keyword Explorer

You could use Ahrefs to discover keywords and product listings. This is a great tool for keyword research. You could enter the names of a couple of products and this tool will provide you with keywords for your products.

You could then find out the keywords that are highly searched for and Google those keywords to find the products.

4. Answerthepublic.com

Once you enter a keyword in the search bar, the tool will generate a few questions according to the keyword.

These questions will help you analyze your choice of products and will help you think differently.
These questions will provide insights into the products in ways that you may not have gone through.

Further Reading:

The best Amazon product research tools for your FBA business.

Amazon product research tips

Pros and Cons of Selling on Amazon

Conclusion

The “perfect product on Amazon” is a myth. No one has ever been able to find one such product. Not long after your product launch, someone will copy it and try to beat you.

There is high competition among sellers on Amazon and hence a low success rate for new Amazon sellers. To become one of the best Amazon sellers, you need to do things differently and target the right market and the right audience.

With the right Amazon product research, market analysis, and marketing you can become a successful Amazon FBA seller. One of the best ways to learn about Amazon FBA business is to analyze your competitors.

With technology influencing every sector in the world, there are various online software (or tools) available to do product research. They provide several tools to help decide your niche and what products to sell. Analyzing products on Amazon is also a good way to know about the type of products that are in high demand on Amazon.

Amazon FBA business is considered to be one of the best businesses you can master at the comfort of your couch. A couple of good quality tutorials and various online Amazon FBA tools can help grow your FBA business. There are various hurdles that you may encounter as a seller, and there are thousands of sellers like you who have experienced the same. Don’t give up, you will find a great private label product for your Amazon FBA business soon. Good Luck