How to Do Amazon FBA Product Research?By Los Silva
‘Don’t find customers for your products, find products for your customers.’ Seth Godin
In a business like the Amazon FBA model, everything revolves around the product. You will be listing your product among the literally millions of products already available on the Amazon platform. Therefore, if you want your business to be successful and lucrative, you need to make sure you choose an in-demand product with the right price, quality, profit margins, longevity etc.
Once your ‘Fulfilled by Amazon’ business is up and running, the logistics are fairly easy to manage. Amazon can receive, hold and distribute your product as well as handle all your customer service for you. However, whether your product sells or not is down to you.
And so we can’t highlight enough the importance of choosing the right product from the start. This can help you avoid dwindling sales or save you from having to invest time and money in changing products and suppliers down the line. But how can you make sure to choose the right product? The answer is simple, do your research.
What actually is product research?
Just like in any area of business, you should never go in blind. Making choices based on guesswork or even personal interests will not usually lead you to the best results. Product research involves you investigating the market, gathering data on different types of products, analysing trends and seeing what your competitors are doing.
It allows you to see what’s working and what’s not, so you can make an informed decision that is proven to be successful and identify the best opportunities. It can seem like a long and complex process which can be off putting at first, but is 100% worth it and a sure fire way to set your business up for success.
And don’t worry we are going to walk you through everything you need to know and do to find your perfect product. Let’s get started.
Amazon FBA Product Research Method
We’ve laid out how to research products for your FBA business in 3 simple phases. Whether you already have a niche or product in mind, are adding another product to your repertoire, or you have absolutely no idea what kind of Amazon FBA business you want to create yet, this step-by-step guide will walk you through all you need to know.
Phase one – Lay down a framework
Determine your business model
If you are starting an Amazon FBA business, you may already know what kind of model you want to follow. If not, or if you are considering various different ways of finding and supplying products, take a look at these main ways you can source and supply products to sell on Amazon. Decide which one sounds like the best fit for you and use that as a starting point to research different products.
One of the most popular ways to sell when it comes to Amazon FBA businesses is retail arbitrage. Retail arbitrage simply refers to purchasing a product from a brick and mortar retail store and selling it on an online platform like Amazon for a profit. It is often possible to find discounts from retailers, allowing sellers to sell the product on Amazon with good profit margins while still undercutting the original retail price.
For example you may be able to buy a water bottle at Walmart for $5 at a 50% discount. You could then sell this for just $9 online and make a profit while still beating the original retail price. This type of selling can often be why you can find a product you want for a lower price on Amazon.
Private labeling is another option for an Amazon FBA business. Private label manufacturers manufacture generic products and then allow the buyers to market them with their own branding. This means you can avoid the hassles of manufacture and supply while being able to build up a strong brand online, cement your authority in the niche, and grow sales. You just need to make sure that you hit a good balance between quality and price.
Another option for an FBA business is to bulk buy products from wholesalers at a heavily reduced unit cost and then sell these individually online. You can expect to pay around 50% of the suggested retail price when buying from a wholesaler. Buying in bulk usually means there are high minimum order quantities to hit with each order. This involves investing more money up front than other methods like retail arbitrage but can mean higher profit margins on sales.
There is also another possible selling model which involves ‘flipping’ used products. This means hunting out used products at garage sales, thrift stores or second hand apps and selling them at a profit. This is more time consuming and a less consistent business model than the others but some people enjoy doing it as well as being able to make significant money.
What factors do you need to consider?
So once you have an idea of how you are going to source your products, what are the key factors to consider when deciding on a product and conducting product research?
Price is always an important factor to consider when looking to source a product for your Amazon FBA business. Firstly the product should be affordable to source. But it should also have a retail price that is both expensive enough to maximise on profits and cheap enough for people to impulse buy.
We think that sweet spot sales price falls between around $15 and $40, with a source price of say $5 to $20. Aim for products with solid profit margins and cross reference this against how many units you think you can sell. Remember to take into account the fees that Amazon will take for each purchase and make sure it is still profitable.
Demand is also key when talking about choosing a product. You should aim for a product that has high demand so that you can rely on making consistent sales. If you have a product in mind, it is a good idea to check out the competition and see how many units they sell each month. You can also use tools to estimate sales and use the Best Seller Rank (BSR) to determine how well that product sells within its category. A good average to aim for is around 10 sales a day.
Quality is also important as even if in a popular niche, a poor quality product can lead to bad reviews and poor sales. Although it is great to get a good deal from your suppliers, products that are great for your customers will be better for business over time and help you build up a name for yourself, or even a brand.
While it is a positive thing to have high demand for your product, it is best if competition is low. This means you will have more opportunity to get your product noticed, make your sale and build yourself up as an authority. An ideal product will have no big brands in the market that you will have to compete with. If you can become an authority in a certain product niche, you could even add similar products later to corner the market.
Make sure to be thorough when checking the sales stats for one product. Even though sales could be high one month, is that the case all through the year? Some products may have seasonal sales spikes so make sure to be aware if this is the case before jumping in. Ideally choose products that look like they will have consistent demand for years to come.
Size and weight
Although the product you choose can be any shape or size, it can be a wise choice to deal with small, light products. These are easier and cheaper to store and transport from suppliers to the Amazon FBA warehouses. The bigger and heavier your product, the higher your FBA fees will be.
Phase 2 – Get researching
So now it is time to get digging for the data and start identifying the best products. We will also go over exactly where and how you can carry out all your research.
See what’s hot with Amazon’s lists
The best place to start is on Amazon itself. They gather all the most current data and can show you exactly what is selling well and what is in demand. Check out what the most popular products are by viewing their Best Sellers list. Over here you can also see New Releases, Movers & Shakers, Most Wished For and Gift Ideas which are listed in the bar across the top of the page.
This can give you a whole host of ideas and insights into popular products that could be good to stock for your FBA business. It is also a great way to verify a product idea you already have.
For the best sellers list dive deep into different subcategories (using amazon advanced search) as you can discover the top 100 products for every category. The further you dive into your chosen niche, you will be able to find popular products without as much competition to identify products with lots of potential.
Explore the new releases section to see what is selling best right now and what people are loving. The Movers & Shakers is a great tool to see which products have increased or dropped in popularity most recently which can help you keep an eye on a products popularity over a period of time.
This will help you find evergreen products that are popular all year round. The most wished for and gift sections can give you an insight into what people love to buy and regularly buy as gifts too which is good food for thought.
Check your competitors
One of the best ways to get an idea of what products are working is to check out the competitors. A good way to see which products are making money is to check out the sponsored products on Amazon. These are Pay Per Click (PPC) paid Amazon advertising campaigns. If someone is paying for advertising, it is likely that these products are making money. Therefore they can give you some good ideas for profitable product possibilities.
If you already have a product in mind, check out all the similar products for sale on Amazon too. If you can identify something very similar, you may be able to use this to your advantage. It may be possible to source a slightly higher quality product and outsell sellers in the same niche. An ideal product might be one with poorly-rated listings on the first page. This means it will be easier to outrank them.
Speak to current suppliers for insights
Got an FBA business up and running and looking to add another product to your repertoire? Reach out to any current suppliers you might have and see if they can give you information on their most popular products and what is selling. They will have a huge amount of up-to-date data and knowledge which could be an amazing resource for your product research.
Analyse the market
Analyse what is popular, talked about shared and sold online to choose a product that will sell with success. Google Trends is a great tool to help you do this. You can search different products and see people’s interest in them over time in terms of web traffic.
This not only helps you see what’s popular right now but also gage the longevity and seasonality of different products. You can even set up alerts to send you trending and popular topics being discussed online. This helps you stay on top of trends and up and coming products, as well as to understand more about the audience you are aiming at.
It is also a good idea to do some keyword research. Determine the top three words for your product or niche and see how many searches they get combined in Amazon and Google. Aim for some 100,000 searches every month to make sure there will be sufficient demand for your product.
See what customers also bought on Amazon
If you have a product in mind or have settled on a particular niche, it is a good idea to check out the feature on Amazon that shows you the other products that people bought alongside it. You can see products that are frequently bought together as well as related products which may give you ideas of similar products to focus on with even more potential.
It is also a good way to get ideas for similar products you may want to add once you have an established FBA business running. You can also see similar products with high ratings of over 4 stars so you know you are only focussing on products that are already successful.
Pinterest is a great place to find inspiration, particularly for private label products. This platform, where you can browse a whole host of different images including products, can be a good place to get ideas. People pin photos of items they like so you can discover what is popular.
You can search boards of images organized by subject, as well as see similar and related images. You can also use their Lens feature to take a photo of a product and automatically discover related photographs. Try searching with keywords and keyword bundles.
This allows you to dive deep into subcategories and explore the depths of different niches and discover different variations of products. You can gage popularity of products based on how many people have pinned it on Pinterest. Once you have enough pins of a certain product type, run a search on Amazon to see the competition. The best products will be ones that lots of people have pinned with very few to no listings (aka competition) on Amazon.
AliExpress Best Sellers
Another good place to look for top selling products is on AliExpress. This huge trading marketplace is not just a good place to source products, but to carry out market research too. You can access the site for free and search for products through subcategories. Once inside a subcategory you can order the products by bestsellers to discover popular products right now. You can even filter them by their star rating which is a great way to vet their quality.
See what’s trending on Ebay
Ebay is a fast-moving market place, stocking a huge variety of products. It is a great place to do some product research as they have lists of trending products. Here you can get ideas of different products that have significant demand.
Phase 3 – Find and reach out to suppliers
This phase is about taking some hands on action and actually getting out there and finding real products. This might involve reaching out to suppliers, heading to retail outlets and using different tools and technology to identify possible deals.
Many competitively priced products come from China so you may find that lots of online suppliers and market places offer chinese-manufactured products.
How to find products for retail arbitrage
If you are thinking of going down the route of retail arbitrage it is time to start visiting local retail stores and looking for product deals. What kind of stores should you visit? Head to any large stores that often have discounts or clearance sections.
These could be in a variety of different areas like homeware, stationary, toys, electronics etc. You might try dollar stores, outlet malls, liquidation stores, Walmart, or any store in a mall that may do regular clearance sales. We recommend using a scanning tool to help you figure out whether products will sell well on Amazon or not.
Simply scan a barcode in a store, and the app will tell you if the item is profitable or if this product type is already saturated on Amazon. Once you identify a good product, simply buy as many units as you choose and list your product online.
Finding products and opportunities can be time consuming when you are first starting out, but don’t lose heart. There is plenty of money to be made with this method and searching gets quicker and easier with time.
Amazon scanner apps:
- Amazon Seller App
- Scoutify App
- Profit Bandit
How to find suppliers for private labeling
If you are looking to build up your own brand name over time then you might have decided to offer private label products. Although starting costs may be higher, you will have less competition as you won’t be selling the same brand as others. You also don’t need to worry about Amazon’s restrictions on selling branded products.
But where can you actually look to identify suppliers and find products? There are plenty of suppliers available online these days that make sourcing private label products much easier. Try marketplaces like Alibaba or AliExpress to source products at cheap prices.
You can usually buy straight from the manufacturer but be aware you may need to place larger orders. E-commerce platforms can also be a good place to source private label products like Made in China or JimTrade. You could also try online directories or trade shows in your area to look for manufacturers.
- Made in China
- Jim Trade
How to find wholesalers
You might prefer to go down the wholesale line to buy in bulk and sell at a profit. You need a significant amount of capital upfront for this method but it has the potential for a large payoff. If this sounds like a good fit for you, you will need to identify wholesale suppliers where you can buy your products.
You can find suppliers by searching on Google, visiting wholesale trade shows, or paying to access wholesale directories. Wholesale directories can list thousands of suppliers that sell wholesale goods. You can usually browse these suppliers and their offers online to help you find a great deal for your FBA store.
You can find products across a huge range of different categories and niches. Some directories are free so these are a good place to start. Others do require payment and are often worth the cash as the suppliers listed are usually vetted and more likely to be trustworthy and reliable.
- Wholesale directories
Important things to consider
Be aware of product restrictions
For selling a new, branded product on Amazon, you will find that there are certain products that are restricted or ‘gated’. These are products that you are not allowed to sell on the platform. It is important to bear this in mind so you don’t end up with a bunch of products that you then can’t shift. How can you avoid this from happening?
If you are buying products in retail stores, this is where the scanner apps come in handy. As soon as you scan the barcode of a product, the app will let you know whether the product is restricted or not. If you are using an online supplier or wholesaler on the other hand, there is another simple way to check the restrictions.
Log in to your Amazon seller account, go to Inventory and then click Add a Product. Here you can enter the chosen product’s UPC and if the product is restricted, Amazon will let you know. This is a simple but imperative step before committing to a product!
Test out products with affiliate marketing
This one is for people that already have an affiliate marketing business that want to level up their game. You can test out affiliate products with pretty much no risk, simply list the links on your site and drive traffic there to make sales.
This serves as great product research for an FBA business. If one of your products is selling great, then you know it will be a good option for an FBA business. You can safely invest in this product and start supplying it yourself to maximize on profits.
However you decide to supply your products, it is important to verify and vet your supplier before jumping in. If you find a supplier online you can not always know they are reliable.
Therefore it is important to do a little research on the supplier and check their location, reviews, business license, certifications, safety procedures and even see if they have photos of their operations. If you are buying from Alibaba, choose trade assurance suppliers, where the supplier specifies product quality and ship date.
Products to avoid
To avoid issues with quality, shipping, product details and returns, it can be best to avoid certain types of products. Digital products or other complex products may add extra hassle to your life. Edible products and cosmetics can also have potential liabilities so you may choose to avoid them altogether.
So while the products you choose can make or break your Amazon FBA business, make sure you don’t skip the research section. Research stops you relying on guesswork and gives you much higher chances of creating a successful business.
Researching your product first means higher sales, lower competition and more longevity for your business. Set yourself up with the right methods and suppliers at the start and it will mean an easier ride along the way.