This post is by Mark Scott Adams, a serial entrepreneur who has started, built and sold six businesses. He is also a full-time Amazon seller, author, speaker and creator of the popular Amazon training course FBA HeadStart.
I spend my days working as a full-time Amazon seller and helping my students private-label their Amazon products in my FBA HeadStart training program.
We cover a variety of questions and topics on a daily basis.
But still the most asked question I get from my students is…
How do I find products to sell on Amazon?
Quite frankly, this is actually a really good question. But the better question is “how do I find the right products and the right market?” The two go hand in hand.
I’ve seen Amazon sellers who get the market right and not much else, and still make money. I’ve also seen Amazon sellers who miss the market and get everything else right, and not do so well.
Since both are so important, what if you had a way to significantly better choose your markets and products? A way to score or analyze the numbers so you could see if you should proceed, before you invested time and money into a product?
That’s why I created my Amazon Private Label Market and Product Checklist.
I have put together an easy to follow and use checklist to help you determine if your market and product are viable as an Amazon private label product. It has a scoring system that will tell you if you should move forward with private labelling or keep looking.
You can also get the checklist as a 1-page PDF, with three free training videos.
Now let’s break down each line and determine if we’re on the right track. Give yourself the number of points for each line if you answer yes, or zero if no, and add your total at the end.
Is the Market Viable?
Make sure a national name brand item doesn’t dominate the market
It will be really hard to compete with a national brand. For instance you don’t want to sell cameras. Canon and Nikon would crush say for instance Mark’s Cameras. But think about categories like kitchen items and any type of accessories where there is no national brand dominance.
The average sales price is between $15 and $60
You want to make sure you have enough margin to pay for marketing. You have to do the same work to sell items that are 50 bucks as you do for items that are 7 bucks. Unless you’re Walmart, low profit/high volume is a tough game to win.
The sales rank is under 10,000 for each of the top three items
If you’re going sell something you want to make sure there’s enough volume to meet your income goals. It does no good to create an item for which there is very little demand.
It depends on the category and time of year but items in the 8,000-10,000 range are selling 4-6 items a day. Ranks from 5,000-8,000 are selling 6-10, ranks from 2,000-5,000 approximately 10-20 a day and under 2000, a gazillion a day.
Do each of the first three products have less than 400 reviews?
Reviews are critical in helping your item rank and extremely important in convincing your potential buyers to choose your product over a competitor.
400 reviews and above are not insurmountable, but it will take time, effort and money.
If multiple items have less than 400 reviews you have an opportunity to overtake them with good marketing.
Do the other products on the first page have less than 100 reviews?
There still is a lot of money to be made from other than the first three positions on the first page. Spot 7 may still be a $1,000-2,000 a month product. Very few people would complain about making this off just one of your products, month after month.
When several items have less than 100 reviews, it just means you have a pretty good shot at getting on the first page
The market has multiple keywords
Would your buyer search for your item under multiple keywords? The more you have, the better and the higher your sales.
For instance, if you sold cutting boards would some buyers search under chopping boards? By good marketing, you could rank for multiple keywords and significantly increase your sales.
All of the pay per click ads being used
If you see competitors using the side or bottom of the page PPC ads for extended periods of time, it means they are making money with the ads and there is money to be made in that market
There is no product video on the first page of Google for the main keyword
If you were to create a YouTube channel and put up a few demo videos of your products you could probably get your videos ranked in Google searches. The links in the video would lead to your Amazon product page.
The top 3 keywords combined have over 100k in searches
I recommend Merchant Words to check this. It’s just a way to make sure there are enough searches so there will be enough buyers for your product.
Knowledgeable sellers in top listings
This may sound counter-intuitive, but if there are other people making money in the market then you can create a better product, get better pictures and copy, and surpass them in the listings. It validates that there are sales for this particular product.
Can you add value to the product?
Read the negative reviews and see what the customers don’t like. Incorporate those improvements into your product. Can you bundle an accessory, can you maybe put two in one package, etc. Anything the customer can see as added value.
Are the products in the market durable?
When products are not durable or easily breakable, like drinking glasses, they tend to break in shipping. People will always blame you instead of Fedex and write 1-star reviews when this happens. Not your fault, but your sales will never be what they could be with those extra negative reviews.
Product is simple to use and won’t need an instruction manual
If people don’t understand something, they perceive it to be your fault. And they will write one-star reviews. When they misuse the product and it doesn’t work correctly, they will blame you and write one-star reviews.
Think of something like a cutting board. No instructions needed really, as opposed to something they have to put together and is electric.
The product leads to reorders
Nice to sell once and then get reorders. Your business will grow each month. Supplements come to mind here.
Can the item be purchased as a gift?
Gift purchasing is huge. If you make your packaging look like a gift item for giftable items your sales will increase dramatically. Some people will buy the item for themselves and then go back and buy for others.
The product is not a commodity and not easily purchased at a big box store
A commodity item like, say a generic cutting board is easily purchased at a variety of stores and many people will buy locally. But if you create a speciality cutting board that has a unique feature like an antibacterial coating, it will be harder to find locally and most shoppers will first look online.
Is the Product Viable?
The product weighs less than a pound
The smaller the item, typically the less its weight. This makes shipping from the supplier much cheaper. It also makes the Amazon fees much less.
The product is small
Hold your hands together. That’s about 8 x 8 x 8 inches. Now imagine your item. If it’s no bigger than your hands it’s probably small enough to get the lowest handling fees from Amazon.
Can you make the product stand out with better packaging?
Packaging is huge. With better packaging not only do you get more sales, but a premium price. You’re trying to do something eloquent like a jewelry store or a perfume bottle. Not packaging that is designed to hang on a hook in a retail store.
Can you purchase with shipping for less than 20% of the sales price?
Amazon takes usually 15% of you sales price as a sales commission. They will also have a handling fee and packing fee for about $2.50-$3.50 per item and up.
So for say a $15 retail sales price that would be $2.25 for your commission, say $2.5 for you Amazon fees. That leaves $10.25.
Subtract your 20% of for your item and shipping cost ($3) and you have $7.25 which is $15-7.75 =$7.25 profit which is a net profit of 48% (7.25 divided by 15). Not bad while sitting at your home office in pyjamas or gym shorts.
You can make an initial purchase of less than 500 units
There is no need to put tons of money into your first order. You want to have enough inventory to cover your sales and promotions until you can reorder and get restocked, but too much inventory can be a profit killer.
Do You Have a Good Amazon Private Label Product?
Now add your points and see if you should proceed or not.
There you have it. My checklist is designed to help you make sure you have an excellent product and market.
You can go to my website and get a 1-page PDF of the checklist to help score your market and product, and I’ll also show you some video training that will help you get started.
By the way, no product is ever 100 percent perfect. The checklist can of course be altered. But it’s a great guideline to get started.
I and my students have been using this checklist for quite a while now. It will definitely help you refine your search, and prevent you from putting in unprofitable time and effort while creating a product.
Being an Amazon seller is a great place to be. It will be 6 months from now, and 6 years from now.
I hope this article helps you get started and helps you pick the right market and product.
Good luck on your Amazon business!