Amazon Product Research: How Effective is it?

Amazon is highly competitive. Many sellers are competing for customers in each niche and category. This is why it is so important to do your product research. The difference between a successful venture and failure is often the product you sell.

It is important to stand out and sell a product that is highly sought after. You must also ensure that there is no established competition in the category. Amazon's selling process is incomplete without product research.

Let's look at some ways you can find the right product for your Amazon business.

Products research 101: What to remember

These are the factors you should consider when searching for the perfect product.

• Good demand is a sign of good demand. This should be all year round. Because of irregular cash flow, selling seasonal products can be risky.

• High margins require that you account for logistics and fees when calculating profitability. FBA sellers can use SellerApp's Amazon FBA calculator to quickly find product margins.

• Low competition means it is hard to penetrate a saturated market. Customers are more likely to purchase your product if they have fewer choices. Your organic ranking will be easier to maintain and improve. The lower your competition, the better.

• There are no barriers to entry: If you don't have Amazon's approval, it is best to avoid selling in a restricted category. This is true for products that might be in a legal gray area.

• Products that are small and lightweight are easier to manage. These products are also easier to store and ship.

• Encourage impulse purchases It is common to purchase expensive products after careful consideration. Customers prefer to deal with established sellers and brands when it comes to expensive goods. It is therefore important to keep product prices below $60

Four steps to product research

1 Start with a product concept

First, identify potentially profitable products. Keep your eyes open for new product trends and opportunities. This can be done by following Amazon's top seller’s list. This will allow you to search for the best-selling products on amazon and then sort the results by type.

SellerApp's Amazon Product Ideas feature can be used to help you find profitable products. SellerApp's machine-learning algorithms evaluate each product listing and give an Opportunity Score. 

This score will show you how likely you are for a product to succeed. The higher chances of finding a winning product are the higher your opportunity scores.

2 Start product research

After you have developed a few product ideas it is time for market research.

First, you must identify similar products on Amazon. Use SellerApp's Amazon Product Research feature to narrow your search with advanced filters. You can refine your search by price, rating, reviews, competition, or weight.

SellerApp will show all relevant results and data after you have initiated the search. Click the Start Tracking button to find out more about product keywords, listing quality and competition, as well as product trends.

3 Analyzing data

After you have identified all relevant products, it's time to start digging into the data. You must first analyze the demand and estimate revenue. The following KPIs should be monitored for products that you have been tracking:

• Orders: An excellent way to estimate revenue. At least ten sales should be made per day. Let's do some quick math. Let's say you sell a product at $40 and have a 25% margin. You make $10 per unit. Selling ten units per day will net you $100. 

• BSR: Higher BSR = higher sales and demand. The better the BSR of products similar to yours is, the lower! Tracking BSR trends can be done by visiting Amazon's product page and taking down the values.

• Product price: Keeping track of the sales price is more important than monitoring the order volume. Although a huge discount might bring you more customers, it can also impact your margins. Track both metrics simultaneously.

4 Estimate your margins

You should now have eliminated most of the product ideas. This is the final leg. You will need to know the minimum order quantity and price range to estimate your margins. To get an estimate of the cost price, do this for all suppliers.

Also, you will need to determine the logistics costs as well as other fees associated with selling on Amazon. Keep the following information in mind:

1. Product price

2. Sold units estimated

3. Product cost

4. Shipping to Amazon fees

5. Advertising budget