Amazon is the world’s largest marketplace, with 9.8 million sellers worldwide and 1.9 million actively selling. With all that competition, you have to find products to sell that make your business as profitable as possible.
One way to make sure your business runs profitably is by mastering product research.
But just what is product research? And how can it help you to find profitability when selling on Amazon? That’s what this post will explain.
What is product research and why it is important
Product research is when you take time to analyze and understand a market, in this case, products on Amazon.
With product research, the goal is to find the most profitable products that you can take advantage of. These may be products you can receive or manufacture at a lost cost and sell for more, or even products that you can receive at an average price and sell on for one that is much higher.
As long as the product has a high profit margin, it is the ideal finding from your research.
However, pricing isn’t everything. You also need to ensure that any product you find from your research is also high quality. So, if you find a product with a great profit margin and great reviews, you’re onto a winner. But if it has poor reviews it may be best to avoid it, as it will be less likely to sell.
What kind of products are good to sell on Amazon
Certain products tend to have a higher level of profitability than others on Amazon. Those products are the ideal candidates to sell on the platform for that reason. However, finding profitable products is a task in itself, which is why we take the time to conduct product research.
But what are the signs of a profitable product? Here are some of the top characteristics of a product you should consider selling on Amazon:
Small and lightweight products
Small and lightweight products are easy and cheap to transport and store. This makes them ideal candidates to sell on Amazon, as even in a period where you have less demand the product will not set you back too much to store.
Products that fill market gaps
Notice a need for a product that isn’t there? Or maybe it does exist, but there aren’t many sellers. This is an opportunity to swoop in and fill the gap in the market.
If there is demand but insufficient supply, there is an opportunity for profitability. However, it should be noted that this may only be short term, as competitors catch on quickly.
Products with high profit margins
Products that have high profit margins and positive reviews tend to be some of the best sellers on Amazon. There are quite a few hidden gems on Amazon when it comes to products with high profit margins.
A good example of this is an unbranded product, that has the potential to be branded. When the unbranded product is given a brand, its value usually increases substantially. This is because customers associate brands with trust and reliability.
Products that are within everybody’s price range
By selling a product that costs between 10-50 pounds, you open it up to be being purchased by more people. This gives you more chance of making sales due to the increased amount of potential customers.
Lower priced products are also subject to frequent impulse buys, where a higher-priced product may take longer for a customer to decide on.
By focusing your efforts on these product characteristics, you are much more likely to find profitable products on Amazon. This should both help you, and save you time when it comes to your product research.
10 best practices to master Amazon product research
Mastering your product research on Amazon can help turn your business into a winner. Here are some of the best practices to ensure you know how to find top performing products.
Check if demand is permanent or periodical throughout the year
When you do your Amazon product research, it is important to consider how the product will perform throughout the year.
Some products will perform well seasonally, or periodically. However, they will not be consistent sellers throughout the year, and therefore may not be profitable due to having to store them for longer periods without getting many sales.
Ideally, it is best to find consistent high performers throughout the year.
Consider the shipping and storage costs of the product
Certain types of products will cost more to store and ship than others would. Consequently, this tends to make them less profitable for you to sell.
For this reason, you should consider the costs of shipping and storage for a product in advance. Small, lightweight products are usually the best option to avoid high costs. Plus, they have the added benefit of costing less to keep if there is ever a temporary drop in demand.
Research the keyword search volume for a product
Another great way to monitor demand for a product is to check its monthly keyword search volume. By researching the keyword search volume, you will know exactly how many people are showing interest in that product during a month.
There are numerous keyword tools on the market that can help you with this, many of which even allow you to refine your parameters so you can find the perfect in-demand product.
Consider the Amazon Best Sellers Rank when determining profitability
Amazon’s bestsellers list is a haven of insight. You can find bestsellers, movers and shakers (products on the up or down in ranking) as well as the most wished for products.
With the bestsellers list, you can dive deep into Amazon’s subcategories and find attractive niches with plenty of profitable products. Movers and shakers allow you to determine changes in demand on the platform, whilst wish lists give you an insight into customer desires.
By using these lists, you can determine what people may want and spot the in-demand profitable items.
Compare the profit margin against the quantity sold per day
High profit margins are ideal when it comes to selling a product. However, it is also important to consider the average amount of the product sold each day when comparing what products are the best to sell on Amazon.
This is because some items may have a slightly lower profit margin than others, but may sell far more frequently than them. This would lead to better long term profitability.
Check Google Trends
Google Trends is another useful way of finding trending, popular products. With Google Trends, you can either set up alerts for new trends or conduct your own searches which you can refine by location. Google Trends may not give you specific products (unless you search for them) but it will give you topics you can dive into, and learn more about what is likely to be in demand in certain locations.
Consider the real-world environment and the product demands it may create
Monitoring online trends may help you spot opportunities as they happen, but what about noticing them before they happen? You can do this by recognizing real-world changes that may significantly impact markets. This could be anything from the introduction of new technologies to an extremely hot summer creating new product demands.
If you do notice something that may impact the demand for a certain type of product, then it may well be worth stocking up to take advantage of that imminent demand.
Search other marketplaces for popular products
Other marketplaces can be great sources for your Amazon product research. Marketplaces like eBay have a ‘trending list’ where you can find in demand products that may not yet be available on Amazon, or at least have less competition.
You can also find similar lists to eBay’s ‘trending list’ on other marketplaces by using the filters. All you have to do select a product category, and filter products out with a rating below 4 stars. You can then order products to be listed by popularity or orders.
Browse the ‘Customers also bought’ and ‘Customers frequently bought together’ sections
Using these sections can help you to get a better idea of your customers and their mindset. You will gain valuable insight into the thoughts behind your customers’ purchases, as you can see what they bought products with, and make conclusions about their goals from those buys.
This can help you to create relevant product bundles of your own in the future, which could be their own bestseller in no time.
Look at which products are being sponsored
Looking into sponsored products on Amazon can give you a good idea of which products have high profit margins. This is because sellers are rarely willing to pay to advertise a product if there’s not enough profit margin to justify the ad costs.
However, you should also ensure you check the number of sellers selling each sponsored product. Some sellers may be sponsoring a product to stay ahead of the competition, and whilst it may be profitable for them to advertise and sell that product, the market for it could quickly become saturated.
The best tools to use
When conducting Amazon product research, tools can go a long way to helping your cause. Here are some of the best tools on the market at the moment.
Seller App is a well-known tool when it comes to Amazon product research. Available as a chrome extension or web app, Seller App offers several functions to assist with your product research. Functionalities include a product trend research tool, a keyword research tool, a PPC analytics tool, and much more.
AMZ Scout is a multi-use tool available in a web app or chrome extension. As well as its primary use of being a keyword research tool, it can also assist you with competitor analysis and cross-referencing conversion data, all of which can help you with your Amazon product research.
Unicorn Smasher is a product research tool run by AMZ tracker. It is available for free as a web app or chrome extension. Unicorn Smasher uses data to give you sales estimates for each product, as well as targeted metrics to help you narrow down which products would be the most profitable.
Jungle Scout is one of the best known Amazon product research tools on the market and is available in web app or chrome extension. Jungle Scout allows you to use numerous filters to narrow down your list of potential products globally across all Amazon marketplaces. It also allows you to monitor all your competitors, and to use an FBA calculator to factor in all your seller fees.
CamelCamelCamel is available as a web app or chrome extension. This tool is ideal if you want to compare Amazon product price history, monitor price changes globally, and spot product trends.
Helium 10 is available as a web app or chrome extension. The software has an abundance of Amazon seller features, including keyword research, competitor analysis, and trend spotting tools. It also has an optimisation tool suite that allows you to maximise the effectiveness of your listings once you have completed your primary product research.
Thorough Amazon product research is the key to finding profitable products to sell on the platform. But regardless of how you decide to conduct your research, you need to ensure you stay on top of any changing trends.
A profitable product may not remain so forever, so it is vital you continue to keep up with your research and adapt to an ever fluctuating market. Should you do this, you will be well on your way to mastering selling on Amazon.
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