Generally we want to reduce any risks when selecting products so we you are not stuck with inventory that is hard to liquidate. Through this podcast episode we are going to go into the details of how I find extremely profitable items to sell on Amazon. In the end goal of this exercise we should be able to find products that are selling reasonable volumes and decide if its a good market to enter based on the marketing research we compile together. I have included the documents to download here. By following these steps we will be able to intelligently choose profitable products.
Show Corrections and Notes
During the Podcast for some reason I talk about ISBN’s which are International Standard Book Number. What I really meant to say is the ASIN which is the Amazon Standard Identifier.That way nobody gets confused. Oops..
Tools and Links Discussed
AMZ Shark – A Tool For tracking Amazon product sales, Amazon reviews, competitor product research.
Alibaba – Largest manufacture marketplaces to connect with suppliers for producing private label products.
Google Keyword Research Tool – For finding search volumes on products people look up on Google.
Camel Camel Camel – Amazon Product Pricing Tracker
SOS Profitable Product Spreadsheet – My personal worksheet to research and find profitable items to sell on Amazon.
Once you download my spreadsheet visit Google Spreadsheets and click the green plus button in the lower right to upload and add this spreadsheet to Google docs.
1. Document Your Researching Products To Sell
Open up a spreadsheet in Google Documents (I like this because I can work on it from anywhere).
– In one column label it “Products”.
– In another column label it “Avg Amazon Reviews”.
– In another column label it “Amazon Product Results”.
– In another column label it “Google Searches”.
– In another 5 column’s label them “ASIN1”, “ASIN2”, “ASIN3″, “ASIN4”.
– In another column label it “Avg Amazon Pricing”.
– In another column label it “Avg Alibaba Pricing”.
– In another column label it “Avg Daily Units Sold”.
– In another column label it “Lead Time”
– In another column label it “Shipping Cost”
– In another column label it “Profit Margin”
Here is what our sweet product research spreadsheet will look after we start doing some research. Download it Here if you haven’t already.
2. Research Amazon Top Selling Products To Get General Readings.
– Visit Amazon top sellers website list
– Pick A category that interests you and look for small items that are light weight.
– Make a list of these 5-10 different products from the category you picked in column 1 labeled “Products”.
– Use the simple name for example if you where came across some “fancy silver nail clippers” just put down “nail clippers”.
– Remember to only pick small items that can easily be shipped (basically nothing bigger then an ice cooler.
– After making your list in a Google Spreadsheet go to Amazon.com
– Search each product you added on Amazon from your list, one at a time by placing the product name in parentheses example: “nail clippers”.
– Put the number average number of reviews in column 2 from the top 5 products on that page.
– In column 3 your going to put the number of results that came up in amazon,
– Do this for each product and don’t skip ahead.
– Now visit the Google keyword planner tool. It will require that you have a Google account.
– Click on the option that says “Get search volume for a list of keywords or group them into ad groups”
– Take your product and paste them in the option 1 field where it says “Enter keywords”.
– Click “Get search volume” and wait for the results to come up.
– Take the “Avg. monthly searches” for each product and paste them into the “Google Searches” column on your spreadsheet.
– Other methods to search for top selling products can include going to CamelCamelCamel.com
– Click the “Popular Products Tab at the top of the website.
– Select 1 month and 3 months and click the “All Products” button to so its not just showing deals
– Then I usually click the Category dropdown tab and browse the products by the category I am interested in selling in.
– From these products you will be able to come up with product ideas as well and repeat the keyword research steps I outlined to estimate search volumes on our spreadsheet.
– Camelcamelcamel.com is also a useful tool for looking at product pricing and if the pricing has been dropped over time. If multiple products end up having a decrease in price it can mean many things including the competition is beginning to saturate that specific product in the market or the seller is reducing the price to build up more reviews to rank better and sometimes even mean they are liquidating stock to get rid of extra inventory.
3. Calculate The Demand of Products and The Competition on Amazon
– Take the number of Google Searches and divide it by the amount of products results.
– This will give us an idea of the supply vs demand.
– If a product has too many of its kind listed in Amazon and there are say over 500 reviews on the top 5 products and over 250 reviews on the next 3 or 4 I would probably eliminate taking on this product unless I had a really good angle to work
– The other thing I will do is look at how many ratings exist on the top 10 listings..
– If the product is going to take too long to build up reviews because it cost too much to import large quantities on the budget your working with you are going to want to pick a different product. That product will need to either be less expensive or at a profit margin that enables you to leverage and reinvest in marketing your product.
– Depending on if the search volumes are high enough and the market is not saturated with other products with a lot of strong reviews we will decide on further putting in the research to market each product.
– Eliminate your products so you have your top 5 products your interested in private labeling
– Take these 5 items and fill in the rest of the information
– Take the top 5 products from each product search and add each product ASIN (click here for code type explanations) to the following columns for ASIN 1-4. (this will be used later).
– Go to amazon and search for your product and enter the average price to the “avg Amazon Pricing” field for each product.
Here is a screenshot as promised of a products ASIN from a listing. If you scroll down after clicking on the product you should be able to find one on each product labeled next to the ASIN tag.
4. Tracking and Estimating Product Sales on Amazon
– When tracking and estimating product sales you can do it in two ways.
– Way number one is to go to each product you want to track and try to add the maximum number of that products to your shopping cart to check out on amazon (make sure you do not have on click checkout turned on).
– You will then want to check that same time the next day and chart it on a spreadsheet for a week to get an idea of how that product is performing.
– Way number two is way easier but uses a paid tool called AMZ Shark which you can enter the amazon ASIN for each product in and track the number of sales. If you haven’t signed up yet click this link to get 25% more for your membership.
– This way saves a lot of time and the software comes with a 30 day trial so if your not trying to waste money just cancel before the time is up.
– In order to track product sales with AMZ Shark which I use you will need to login to your account then click on “products” on the left column.
– Next click the green button at the top to add new products and grab your ASIN numbers from each product you want to track from our spreadsheet and paste them each on their own line, select the appropriate country and click add.
– Once a product has been added you will want to click on the button on the far right side of each product to start spying on those products.
– Sometimes if there is too much inventory a products sales can be hard to track. In cases like this we will rely on the other 3 products we are tracking using the Amazon ASIN’s.
– Over a few 5 to 7 days you should get a real good indication of the product sales for each of the product types you are tracking.
– Add the average daily sales to the “Avg Daily Units Sold” column.
– This information will allow us to understand how much products we may want to have in stock to keep up with demand.
– If a lot of product stock is going to be needed your going to want to keep in mind how long it will take to order more and ship them to Amazon.
Here is a screenshot of 5 days worth of sales tracking on a random Item I was doing some research on to give you an idea of what your sales tracking in AMZ Shark is tracked.
5. Researching Manufacture Pricing and Profit Margins On Private Label Products For Amazon.
– Next lets visit Alibaba.
– Search for your first product for example “potato peeler”.
– We are then going to click on filter by selecting the “Trade Assurance” and “Gold Supplier” selections.
– This will help us make sure we work with more reputable manufactures and protect us from possible hassles working with the wrong people.
– If you really want but you don’t have to you can also click on the filter selection “Onsite Check” this will filter out only manufacturers that a Alibaba rep went to their factory and verified they are a real manufacture. I usually only use this when I have tons of products and suppliers available.
– Select the products that are related to what you want to sell and make a quick note in each column on the average price being offered on Alibaba in the “Alibaba Pricing” column.
– By doing this research we are able to see the profit margins of each product. Keep in mind there are additional costs from Amazon and shipping. This will just give you a general idea right now though.
– For each item you see that looks like a quality product to improve on or design differently add them to your favorite by clicking on “Favorites” below the product image.
– This way we can easily come back and ask these manufactures for quotes in following steps.
– Visit Alibaba.com or any other favorite product manufacture directory and search for each product on there and enter the average price for each under the “Alibaba Pricing” column for those products.
– The next thing we will want to do is eliminate products that do not have at least a profit margin of 35% or less. Generally we want to aim for at least a 50% to 100% profit margin on a product.
– If its a product with high sales volumes and lower profit margins you can always bundle profits to make up margins and you should test selling different amounts of products in each bundle depending on the type of product you plan on selling.
6. Selecting The Winning Products To Sell On Amazon
– To select a winning product there are a few things we will want to keep in mind such as size and weight in shipping and how to improve on that product to make competition with the competition way easier.
– From your product list using only the items we have kept to dig deeper I want you to create a list of your top 5 items based around which items have good possible profit margins, are the most light weight to ship or are small and how many reviews are on the top products when searching for that item.
– Other things to think about are if you see obvious design flaws or ways to improve the products on your list too and ways to compliment it.
– This can be done by looking over the bad reviews on similar products on Amazon and figure out ways to improve your own products.
– Next lesson we will go a little bit more deeper into this and discuss more on this and contacting manufactures to work with.
– On the spreadsheet you can find with this episode on the site I have included some functions to help calculate profit margins of your products once you enter in the values for the avg price of the product on amazon and the avg selling price on alibaba. Keep in mind this does not include shipping the product from the manufacture or Amazon’s Fees for FBA.
I want to congratulate if you get this far as its one of the most important steps in my opinion when selecting winning products to private label and sell on Amazon.
With this research you should be right on your way to picking your first private label product to sell on Amazon. Thanks again for tuning in I really appreciate having the opportunity to share my knowledge and help you take actions to improve or create your amazon business. If you found this information useful please leave me a review on iTunes as it helps us reach other people and our rankings.
On the next episode we will go deeper into
– Improving our products so they sell easier when we launch them
– How to contact product manufactures for quotes and get sent out first sample products