Evaluating the market and choosing the right product is a hallmark of a successful Amazon seller. Any product you launch must be both profitable and sustainable.
Thorough Amazon product research is therefore vital before going 'all in' on a product or an entire brand launch.
For many beginners, this process can be mentally and emotionally draining, but don't despair! Just about every professional Amazon seller has been through this grueling process to validate product ideas.
And yes, it does become less overwhelming through time and experience.
There are many elements to a successful product launch such as profitability, FBA fees, branding restrictions, return rates and much more. Additionally, finding profitable products to sell on Amazon requires much more active involvement in 2022 than it did in 2015.
So in this guide, I'll be assisting you in your product research on Amazon using proven principles, plus crucial things to watch out for.
What Truly is Product Research?
Effective Amazon product research is analyzing the current market and choosing profitable products that sell year-round. Some use the phrase 'winning products' which refers to products that gain a home run within weeks of launching, and then continue to perform for multiple years.
The basic premise is to find products that are sourced for cheap enough where you could on sell for at least 3x your cost of goods sold, but preferably 5 to 7x. The higher your multiple on the landed cost, the more margin you have to spend on PPC and to hire influencers.
Not only should you aim to find the 'winners', but they should be able to gain a portion of reviews organically and have a low return rate.
Key Elements of a Successful Amazon Product
So what criteria make for a successful product on Amazon?
- Strong and sustainable demand. Use Google trends with both your primary and secondary keywords. Avoid any 'trendy' products that are likely to plummet next season, such as fidget spinners.
- Low market competition. If the first few pages of a product has a flood of competition, particularly from China, then steer well clear. Ignore the revenue FOMO and simply find another profitable product.
- Sold for $25 or greater. Products $25 or more qualify for free shipping for non-FBA buyers which may be more attractive to buyers when compared to product + shipping listings. The higher price also provides some margin for you to spend on PPC or influencers.
- Room for improvement. Look at your competition and see what they have missed. Can you increase the quality? Add bonuses? Increase or decrease the size and weight?
- Minimal seasonal changes. You'll want products that will sell year-round, especially if your FBA income will become your primary income. Additionally, sustainable businesses are more attractive to aggregators.
- No trademark/parent/branding violations. One of the quickest ways to get kicked off Amazon is via copyright violations. There may be a very real reason why no one else is selling that same product - it's because they can't. Some things to stay well clear of are Disney, Velcro and Bluetooth which are all trademarked.
In addition, it's best (but isn't a deal-breaker) to steer towards small, lightweight and unbreakable products if you're just starting out. I recommend keeping things simple early on and simply using these products to springboard towards more complex products, should the need or desire arise.
5 Quick Ways to Verify Product Research
Demand is important when launching a product. Even if it has high margins and minimal competition, there is little value if very few people are seeking out your product.
Here are 5 ways to verify your product has demand:
1. Year-Round Product Demand
A product that's consistently bought throughout the year leads to a more sustainable business rather than the peaks and valleys of a seasonal business.
To see if your potential product is seasonal, simply head over to Google Trends and enter the main keyword(s) for your product. Provided the product has enough monthly search volume, Google will provide some brief insights how often customers are searching for the particular product, such as soccer gloves:
While it isn't necessarily 'bad' to choose a more seasonal product, you might get stuck with unsellable products in Amazon's warehouses, such as winter snow gloves over the summer months.
2. 5 Sales Per Day Minimum
5 sales per day minimum is necessary to ensure you can enjoy consistent sales, but 10 sales per day is more sustainable. These averages should be based on a 12-month trend to account for slumps and sales spikes.
Keep in mind that this applies to Amazon US only, and you may attain an additional 10 sales/day on Shopify alone, plus Amazon Europe too. 30 sales per day at $10/profit leads to a full-time income for most sellers, with a 6-figure business valuation.
3. 50,000+ Monthly Searches 5 Keywords
Analyzing customer interest is mostly a matter of finding search volume, as the volume of searches is a great sign that there is consistent demand.
Your top 5 keywords should be gaining around 50,000 searches combined, and tools like SellerApp can help you through that process.
4. Little To No Big Brands Competing
You may think that seeing big brands competing for product keywords is a good thing, but often it isn't. Buyers have a tendency to trust known and established brands over new brands and products, including yours.
If you see mostly unknown brands competing on the first page for primary keywords, then that's often a great sign. You'll gain a higher click-through rate and likely a higher conversion too. But on the flip side, if the page is full of cheap overseas sellers, it's a product worth avoiding.
5. Competitors Typically Have <100 Reviews
The volume of reviews on page 1 is one metric to help you understand sales volumes and lack of competition. It's certainly not the most important rule (hence I've left it last in this list) but can give some estimates if you're not using FBA research tools.
It's widely considered that 1-2% of customers leave reviews meaning that 50 to 100 sales are achieved for each review, assuming these are 4 to 5 stars.
Unusual Ways To Find Killer Products
There are numerous unconventional ways of performing effective Amazon product research. Some require the use of tools, but the following ideas are free:
New Amazon Hot Releases
Amazon curates its own hot releases that are not only new to the market but are already selling well. Keep in mind, however, that some of these can be very seasonal or holiday-specific, such as unique Halloween costumes. It's also worth checking out the Movers & Shakers section which showcases products who have gained huge sales ranks over the past 24 hours.
Amazon Wish-Listed Products
Another way to find killer products with demand is via most wished products. These are products that customers have saved in their wish-list to buy at a later date. That said, these may often be novelty items, hopeful gift items or simply 'nice to have' rather than products that will actually sell. Customers often wait for Prime Day to checkout on these products.
Use Exploding Topics
One of the best tools I've come across in recent years is Exploding Topics, which is far more focused upon the present time than Google Trends. Take for example the swiss cheese plant:
Interest in this plant has sky-rocketed in recent years. What do owners need for their plants to thrive? Planters, organic fertilizer, UV lights and more.
Spot Poor Listing Optimisations
I'm forever spotting household brands whose Amazon listings are poorly optimized with minimal keywords, often just one photo and very brief listing content. However, they have the strength and reputation of their brands available to create conversions.
When you spot unknown brands making these same mistakes, yet still gaining sales and reviews, that's a good sign that a market exists there. Not only that, but it's possible to organically outrank them or win the buy box through improving the product listing.
Check Volume of Affiliate Sites
There are thousands of SEOs who build niche and authority websites that direct traffic to purchase products on Amazon. The best part? They are often are excellent at keyword research off Amazon and can analyze search volumes and expected revenue.
If you spot several sites targeting and ranking for your top 5 keywords, this is often a great sign that a strong search volume exists. Try paying $50 to these sites in exchange to see their Amazon Associates affiliate revenue for your competitors. You can then go back to these sites and collaborate for promotion opportunities.
Use Amazon's Marketplace Guidance Tool
A lesser-known tool is Amazon's own Marketplace Guidance Tool. It's only a few months old, and unlike most Amazon's tools, it's actually a helpful tool which uses 600 data points:
The objective? To help you as the seller see gaps and opportunities in the market. These are personal recomendations designed for established sellers to launch additional products, using real Amazon data to help you succeed unlike 3rd party tools.
Going 1-Up on Competitors' Products
Let's say you find a number of profitable products that have potential. You can increase the revenue of these products and get past your competitors on page 1 by:
- Creating variations. You may be able to offer additional sizes, colors or weight variations that appear to have some demand. Read your competitor's reviews to see if are any repetitive requests for a new product launch.
- Bundling with other products. You may want to include a beneficial accessory to your main product which presents more value to the customer, hopefully for the same price.
- Unique packaging. Customers seeking to present your product as a gift will value high-quality packaging. The product may also have greater appeal on Instagram and Shopify.
Amazon is forever becoming a competitive landscape, so take any chance to 1-up your competitors with your value offering.
Risky Amazon Product Categories
While some categories are excellent such as outdoors, gardening and fitness, there are equally some you should avoid at all costs. Specific categories can be too complex and might have you regretting your life choices. 😔
- Electronics. These have too many moving parts, needs constant upgrades, can be unreliable and this category is essentially owned by cut-throat Shenzen-based sellers.
- Appliances. Like electronics, appliances can require year upgrades and often have a lot of moving parts. They can also have a higher manufacturing cost and may be subject to trademark or copyright issues.
- Consumables. Any type of product that goes on the skin or is injected, such as pills or creams, comes with many liabilities. All sellers require insurance, and while Amazon usually doesn't monitor most sellers, they pay close attention to products that can be ingested by a customer. The catch here is that most product insurance brokers won't touch consumable products.
- Baby. For the same reasons why consumables are risky, baby goods can be difficult to get insurance. Harder still is the consumer who is often emotional, time-poor, sleep-deprived and with no tolerance for product failure.
This doesn't mean you can't enter these categories in the future, but for your first few products, you should aim to keep things as simplified as possible.
Worst Amazon Product Research Mistakes
Before you pick a product and order samples, let's look at what not to do. These mistakes have cost other sellers thousands of dollars and time wasted, so it's best to avoid these.
Selling Me-Too Products
It isn't 2015 anymore and simply grabbing a popular product off AliExpress won't lead to any notable gains. The saturation is real and margins are very tight here.
Products that aren't differentiated aren't just competitive, but the business itself is harder to sell. Avoid the common items that are easy to manufacture and sell by China-based sellers like baking pans, steering wheel covers and bathroom towels.
Choosing Very Tiny Niches
It's not just the product you need to choose, but the market itself. Your job isn't to sell a product but serve a market and solve their problems. The profits come later.
By going super niche, it's harder to get noticed and therefore sold. These obscure product categories may not have any decent competitors since the sales volume is too low. Examples of very tiny niches include recumbent trike parts, antique boat cleaning supplies and vegan hiking shoes.
Miscalculating Profit Margins
I always laugh when sellers share 7-figure sales screenshots in Facebook groups. Sales and profits are two very different things and the freight costs of the last 12 months has meant that most sellers are breaking even at best.
Amazon's fees have also increased in recent years where around 30% of your retail price could be eaten by FBA fees. Always ensure you have used Amazon's product calculator before getting too excited and ordering product samples.
Going Into High-Competitive Battles
Some niches can be a cutthroat battle with sellers racing to the bottom on prices. This is a capital-intensive strategy with minimal profits. Likewise, some niches have been untapped but two sellers compete directly by simply lowering prices.
This is an excellent way to sabotage your income and potential for an exit, and may reduce the perception of your brand if your prices become too cheap. Avoid pricing your products simply for what your competitors have listed theirs, and instead, consider the type of customer you're trying to attract.
Amazon Product Research Checklist
To summarize this article, our 20-point checklist for beginners will make your job of elimination and shortlisting infinitely easier in the US marketplace.
Feel free to screenshot this:
- $25 to $70 retail after discounts and coupons
- 5 sales per day minimum but ideally 10+
- 5,000 Best Seller Rank in main product category
- 50,000+ searches/month for top 5 keywords
- < 100 reviews for at least 3 products on Page 1
- 3x retail price on landed cost but ideally 5x to 7x
- 20% margin but ideally 30% to 50% after FBA costs
- 5 pounds and under, and below shoe-box size
- No trademark, copyright or patent infringements
- Can be sourced easily from China, Taiwan or India
- Non-breakable and won't require complicated packaging
- Allows you to expand your brand with relatable products
- Potential to create a superior product against competitors
- Has numerous related keyword opportunities to rank
- Can be marketed through influencers away from Amazon
- The product can lead to recurring purchases and upsells
- Isn't likely to become saturated by Chinese sellers
- Can be also sold easily via Shopify or WooCommerce
- Doesn't fall under Dangerous Goods classification
- Isn't a dangerous product that could lead to lawsuits
These aren't necessarily hard-fixed rules as they can be adjusted to suit your unique situation. For example, you may want to switch to Fulfilled by Merchant if you're able to fulfill orders from home and therefore increase your profit margins.
There are many questions about proper product research, but many of the answers can be acquired through your own direct experience in the field. I have learned the most through spending hours in the evening looking for products and analyzing potential with tools such as Helium10, Zonguru and JungleScout.
To keep things simple, here are three high-quality questions:
What are some Amazon products that don't get many reviews?
Effective product research requires finding products that will gain reviews which lead to healthy conversions. However, there are several types of products where customers aren't as likely to leave a review.
- Common household items where customers care very little about the product or brand. These include tissues, plant pots and cardboard boxes.
- Controversial or taboo products where the reviewer could be identified by friends or employers. These include adult toys, enema kits and medical goods.
- Gift items that are given to an extended family member. Some examples include kids toys and anniversary gifts which are also seasonal.
In most cases, these types of products should be avoided if you're just starting out.
How much time should I spend doing Amazon product research?
In 2022, I recommend 50 to 100+ hours of research to come across profitable products on Amazon for your first launch. While that might seem excessive, you'll come away more confident and assured that your product is likely to perform well.
After all, you don't want to blow your hard-earn money on a product that flops.
As time goes on, you'll better spot opportunities and can easily ignore products that you believe will flop. Subsequent product launches will require 20 to 30 hours of validation, plus time with suppliers, freight forwards and listing optimization.
Where can I get my research and ideas validated?
It can certainly be hard to know if your product will actually be a winner. However, there is a concern that Amazon sellers might have their deep research 'stolen' by an Amazon FBA coach or consulting company seeking to profit off their work.
Sometimes ordering a smaller quantity of 100 to 200 units will give you some initial product validation and a chance to remedy issues. Should you absolutely need someone to poke holes in your Amazon product research, we can recommend Amy from Amazing at Home who runs a helpful Facebook group and podcast.
Can I just outsource my product research?
No. While you may be bombarded with ads on social media with catchphrases and bold promises stating "We'll build your Amazon store for you!", in many cases these will fall short of expectations, and with a hefty price tag too.
By doing your own product research, you'll gain a huge amount of experience while being 100% responsible for your outcomes. Researching the first few products can be tricky and overwhelming, but all gets easier from there onwards.
No successful Amazon seller achieved their success by luck. Even in years prior, product research was necessary to minimize downsides, even with the previously higher profit margins.
Today in 2022, product research is even more important, but it doesn't have to be overwhelming. I've attempted to make this guide as simplistic as possible, but here's the truth - you'll learn a ton through practice. That's it.
It may seem emotional but don't overcomplicate this early process. Sign up today to some free software trials and use their research tools over the next few weeks.
Once you're established, use Bindwise to monitor your Amazon listings 24/7 for the Buy Box, hi-jacking and more. Start your free trial today.