If you’re starting a new company, you want to make sure that your product gets in front of as many interested potential customers as you can. One way to make that possible is to make it available on Amazon, which gets an influx of about 75,000 new products each day.
The process, as outlined in an infographic from new product development firm Idea Buyer, takes 10 simple steps. Start by figuring out how many units of your product you intend to sell, and connect with with GS1, an organization that provides barcodes to retailers and businesses, to get a UAN or EPC barcode. Once you have your barcode and your self-created stock keep unit (SKU) that helps you monitor your inventory, you then choose your Amazon category and make sure you meet any attendant requirements like photos to go with your listing on the site.
Related: Azon Fat Cats Review
You have to provide the basics like a brief company description and a product description with distinguishing features like what materials it is made of. You should also include the dimensions of the product, the shipping weight and where domestically and internationally you are able to send it. Also decide whether you want Amazon to take care of the shipping logistics.
For more information about how to get the best images of your product and how to figure out pricing for things like shipping costs and referral fees, check out the infographic below.
Welcome to the third update in my journey to try and sell a private label product on Amazon! For those of you that missed the first two updates you can see Update #1 here and Update #2 here. Also if you haven’t already, make sure to join our free Amazon FBA Facebook group!
So far we have discussed a lot of fluff and mandatory stuff to get the case study rolling, in today’s post we are starting to get into the good stuff!
This article will cover the most important part to selling successfully on Amazon, finding a profitable product to sell. I know that many of you have been waiting for this part and have questions regarding this part of the process.
I am going to try and cover all parts of the process the best I can, but please remember that I have never sold on Amazon before, which means all of the information I am providing is stuff that I have gathered across the internet.
I also provide some of my own ideas that I have not tested but feel like they are important. I am in no way calling myself an expert or master, I am simply telling you all of the information I have learned and providing it in an easy to consume resource. That is my goal with this update.
This update is going to be split up into two parts, the first part is going to cover the WHOLE process of finding a good product and then the second part is going to reveal some details of my actual product as well as compare it to all of the requirements that I layout.
I am doing this Targeting Academy Review because I think it is a good idea to show the process that I used to find my product and then show you the details of the product that I am going to sell on Amazon.
This is going to be a very long and detailed post that will take you a while to fully consume all of the information. I have put in a lot of work into this post which included hours upon hours of independent research to find all of this information for free on the internet.
I hope that you will find it useful and a good resource that you will be able to bookmark and keep coming back to when you are searching for a product.
Buckle in and let’s get started shall we!
Amazon FBA Private Label Basics and Outline
I think that it is important to fully understand the basics of how this business model works and the basic outline of the process. This way we will have a solid understanding of what we are going to and how we can go about it in the most efficient way.
This is NOT Retail Arbitrage
We need to clear this up and make sure that everyone is on the same page before we get started. What we are going to cover in this article and in this case study as a whole has nothing to do with retail arbitrage.
Retail arbitrage is where people run around to a bunch of stores and try to find underpriced items that they can sell on Amazon for a profit, that is NOT what we are doing here.
What We ARE Doing
We are going to be finding a product that we can source to China for cheap and then private label that product under our own brand and then sell it on Amazon. We are creating a legit business that is scalable and sellable, unlike retail arbitrage.
Understand the Basic Process of Amazon FBA
I think that it is important to understand at least the basic process of how this whole thing works. It is broken up into a couple of different parts.
The first thing we do is try to find a supplier that will make our product for cheap. This usually happens in China. We are creating our OWN brand and the product that is made in China is going to be your own product.
Once we find our supplier and agree on an order, they will ship it to an Amazon warehouse somewhere in the United States.
Once Amazon has our shipment in the warehouse we can now put our listing live on Amazon and start selling.
This is a VERY basic outline that leaves out 95% of the whole process but you can see how this differs from retail arbitrage and you can see how Amazon FBA works on a basic level. I wanted to highlight the process so that we are all on the same page going forward.
Picking a Product is the Most Important Factor to Having Success
I have heard this Conceptual Pictures Review from just about everyone who is selling or has sold on Amazon. I can see why, your product determines everything about your business and that is an important decision to make.
Just think about it, let’s say that you picked out a product that was bad(didn’t meet any of the requirements of a profitable product) but then you did EVERYTHING else perfect. Meaning you did every other part of the process perfect such as finding a good supplier, good price, high quality product, optimized listing, etc.
Guess what happens?
Yup, you more than likely will fail and lose money.
That is why it is vital that you spend a lot of time finding the right product that will give you the best chance for success. I am hoping this post will be of help to you all while you go through the process and hopefully guide you to finding the perfect product to sell.
Checklist and Requirements for Finding a Profitable Product
You just got done reading about how important it is to find a good product that you can sell. What we are going to talk about next is how exactly to find these products.
I have scoured the internet and tried to find as many different sources as possible when it comes to the requirements for a good product. I have compiled everything I have found into the list below and I will thoroughly explain the reasoning behind each one.
Quick and Dirty Checklist of Product Requirements
Detailed Breakdown of Each Requirement by Their Importance
I am going to breakdown each product requirement and explain the reasoning behind each one. I will categorize each of the requirements listed above by the importance to having success with your product.
Then it will be easy to see what product requirements are vital to have, while some requirements are not as important. Once again, please remember that I will rate them based upon what I have gathered from my own research and my own opinion.
Requirements That are Very Important for Success
The requirements that are going to be listed below are considered to be very important for success and I would highly suggest that the product you are going to sell has at most and if not all of the requirements below.
1. Average Product Sale Price Between $10-$50
The selling price for your product is very, very important thing to know and it is something you HAVE to know before you make an order. The $10-$50 price range is the sweet spot for pricing because people will make impulse buying decisions for products in this price range.
Most people will not need to do any further research to make the buying decision because it is a low enough price that they can risk losing the small amount of money if the product is bad.
To further explain this point, think about how much research time is spent before making a large purchase such as a new lawn mower or a new TV? People don’t want to make an impulse buying decision when buying those items because they cost so much and that is why we want to keep our product selling price within the range of 10-50.
Another reason why we want our products to be in this selling range is because a lot of the items within this range will be simple products without much to them. Example, think mouse pad(very simple product, low price) and compare that to a radio(very intricate and a lot of moving parts that could break).
The final reason is because items within this price range allows for a lower barrier to entry into the market. That’s because lower priced items are usually cheaper to make in China than higher ticket items. To explain this idea further let’s take a look at an example of two different products, A and B.
That example illustrates why picking a product within the selling range of $10-$50 will be a much cheaper, more efficient way to go. It also makes it easier to enter a market if you don’t have thousands and thousands of dollars to spend on inventory.
The average selling price range is important to follow and it is vital to the success of your product. Try and pick a product within this range if at all possible.
Ideally you want your product to be as light as possible. I would say anything over 4-5 pounds is too heavy unless you are planning on selling the product for a higher price.
When I am discussing the weight of the product, I am talking about the shipping weight of one unit. That includes the item itself, packaging and the shipping box.
It is impossible to know exactly the shipping weight of one unit until you can get that information from your supplier. So the quickest way to find an estimated weight of your product is to find similar products with a similar size on Amazon and find their shipping weight.
For example, let’s say you are thinking about selling 1-by-28.5 inch dog collars and you want to an estimate for the shipping weight.
What you would do is search for 1-by-28.5 inch dog collars on Amazon and then find a similar product to yours. Scroll down the page until you see Product Details and then the shipping weight will be right below it.
Refer to image below.
The weight is important because it plays a big role in the shipping cost from your supplier to the Amazon warehouses. The lighter the product the cheaper the shipping cost will be, which means higher profit margins.
The weight also plays a factor in the Amazon fees. Amazon charges around $2 for up to 2 pounds then every pound after that it is an extra $.39.
So if your product weighs 4 pounds then it would be charged $2.78 per unit just in weight handling fees. There are also other fees that are minimized by having a lightweight product. You can see more about Amazon FBA fees here.
Overall, the weight of your product plays a large role in your profit margins and the success that your product will have. Try and go after lightweight products if possible.
3. Similar Products Have a 5,000 Best Seller Rank or Lower in its Main Category
It is very hard to get a good estimate of how well a certain product is selling on Amazon but the best thing Amazon gives is the best seller rank(BSR).
The BSR let’s you see how well that individual product is selling within its category. For example, a product with a BSR of 20,000 is going to sell A LOT less than a product in the same category with a BSR of 2,000.
This is useful for us as sellers because we can determine if there is demand for this product in the market or not.
We don’t want to try and sell a product that will only sell 1-2 units a day when sitting #1 for our keyword. That is why it is vital to go after a product that has demand in the market. That is where the BSR comes in, it gives us a good look at whether there is demand for the product or not.
There are other ways to determine the market demand for a product but this is the quickest and arguably the best as well. We will get into other methods later on!
From my research, people say many different things when it comes to the minimum BSR of a product for it to be viable to sell.
Some say below 10,000 BSR while others say 500-2,000 BSR. I also saw people saying a product with a 5,000 BSR and below is good and that is what I am going to suggest as well since it is a good median.
Ideally, when you search for your product keyword in Amazon the first couple results(2-3) will all have BSR’s lower than 5,000 for the main category.
The more products below 5,000 the better. This proves that there are a ton of people buying these products which means that if you can get into the same position as these products then you will be able to sell a ton as well.
Main Categories vs. Subcategories
Just to clear things up, a main category would be things like “Pet Supplies” or “Home Improvement” while a sub-category would be “Dog Collars” or “Table Saws”. We are more concerned with the BSR in the main category because a low BSR in a main category means it is selling really well.
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