By popular demand, Viral Launch’s Product Discovery tool receives a handy update to refine your Amazon market research.
The most reliable, trustworthy data in the Amazon marketplace just got a little better.
In Viral Launch’s Product Discovery tool for finding untapped Amazon markets, users can now manually refresh the data for the latest, most up-to-date information available in Brand and Category searches.
Previously, the data displayed within the tool for Brand and Category searches may not have been the most up-to-date timeframe, depending on the search criteria. The out-of-date data shown in those instances were often for lesser-known brands or more niche products that did not meet the necessary benchmarks to update daily, as they do in Market Intelligence and our other insightful seller tools.
Now, you can ensure you’re seeing the most comprehensive, up-to-date data with the easy push of a button. If the results displayed are more than 30 days old, simply click the “Update Analysis” button near the top right corner of your browser to queue up an update.
Upon triggering the update, Product Discovery will hunt and retrieve the data requested. Of course, once you start your Amazon research, waiting around isn’t a part of your plans. While we fetch the data, you can pin your search and come back to it at any point to check the status and keep a history of your searches.
Whenever you’re ready to come back to check the update status or see the up-to-speed results, just select the Pinned Ideas tab on the left menu, select your search type, and your full history of pinned searches will be available to peruse.
The update is currently live, so all users with access to Product Discovery can give their brand and category research a boost. Product Discovery is available within all Viral Launch software packages. If you don’t have an active subscription, no worries! Sign up for your free trial today to join the action and take your Amazon market research to a new stratosphere.
To learn more about this new feature, contact us using the chat function or by sending an email with your request to firstname.lastname@example.org.
Cash flow is the backbone of any eCommerce company. It is crucial to keep cash flow moving smoothly. If it becomes too much of a pinch point, it can kill the business. Cash flow is defined by the amount of cash available to your business throughout its operations. It is usually measured every month, and the primary source of promote cash flow for eCommerce businesses comes through selling product.
Cash flow is crucial for businesses and shows how much money passes through the operations. Yet, it is not the same as a profit. The funds received from customers are collected under the term cash flow. Businesses still need to pay for expenses like rent, labor, utilities, taxes, and other fees. Every company has a constant fluctuation of cash flow. The amount of cash received (and when) depends on supply and demand and the business’s monthly expenses. With proper data management, a company’s ever-changing cash flow can still be predictable and manageable and enable sound business decisions.
Why Is Cash Flow Important
Cash flow is the backbone of a business, so if it fails, the company fails. A recent study from CB Insights found that a third of companies failed because they ran out of cash. One-third of businesses also fail due to an insufficient market for the product they are selling. Which then leads to a lack of cash flow. Improperly managed cash flow streams can lead to poor decision-making, a misunderstanding of how a company’s money is spent, and ultimately be the downfall of a business.
Companies need to prioritize their cash flow to ensure that their business will stay afloat and reap more benefits from adequately managed cash flow. As businesses manage their cash flow, they pay close attention to how their money is spent and control their finances. When a company has a positive cash flow, it improves the relationships with its partners and customers and promotes brand loyalty. It can also help businesses find their strengths and weaknesses, and how best they can expand.
What Promotes Cash Flow
There are a few ways that businesses can promote cash flow and ensure that they will thrive. The first step in promoting cash flow is planning and forecasting. In order to spend money correctly, businesses need to know how much money will be coming in and when. With a better idea of how money flows through a business, there will be less overspending and fewer mistakes when judging how much money the company has.
With planning comes a strategy of what businesses should spend money on and when. Companies should plan when their cash flow is coming in and the best allocation of that money. If there is a low demand for a particular product, there is no need to spend cash flow on an abundance of inventory. Companies should find what is a priority for spending and what needs the most attention. Pay close attention to what needs fixing. This will promote more cash flow and allow attention to shift to minor issues.
Cash flow improves when companies receive money faster and hang onto it longer. Speeding up the process of obtaining cash can incentivize customers to choose a faster form of payment. Companies can hold on to money for longer by buying inventory, earning interest, and elongating the amount of time before paying expenses. This sales cycle gives control over when costs pay off and how much money is in the business at one time.
What Challenges Cash Flow
Many daily challenges come along with maintaining cash flow. Businesses that forecast their finances consistently can learn how to work around everyday challenges. Conversely, companies that do not find solutions to these problems end up with cash flow as a bigger pinch point, which can negatively impact the entire operation.
Some common challenges with cash flow include delayed payments from customers. Sometimes, purchases can happen pretty quickly. Businesses may not reap the benefits of the purchase and experience a time with a shortage of cash. Less cash flow is caused by bank deposits holding money. Or if a large sum of cash flow to buy equipment or machines, leading to businesses waiting for new revenue. Companies unaware of their total cash flow, or spend their cash flow before secure income experience negative cash flow. The life of the business is then solely dependent on the speed of its recovery.
How Payability Can Help
Payability recognizes the difficulties that eCommerce businesses face with cash flow. The funding programs are built for eCommerce businesses that need assistance filling the gap between paying expenses and receiving revenue. eCommerce businesses no longer have to worry about the risk of cash flow with the help of Payability. To see if your company qualifies for Instant Access to your marketplace payouts, visit Payability.com and apply now.
Thank you Payability for your guest post. For more information on Payability, head to their site. To better your selling business and software tools, head to Viral Launches main page.
Product research is everything for Amazon FBA success. But many competitors, gurus, and “experts” neglect using Amazon search volume data despite its incredible impact. Why?
No matter where you’re at in your FBA journey, conducting intensive product and market research is critical to your success.
With each stage of the Amazon selling process, the key performance indicators (KPIs) you rely upon will change, as each phase presents unique challenges. Knowing which data points to observe and consider during any decision-making process plays a significant role in your ultimate success or failure, especially for FBA beginners.
For most sellers, search volume data doesn’t enter the equation for product research until you’re building an SEO-friendly listing or exploring pay-per-click (PPC) advertising opportunities.
But waiting until after you’ve found a product to start paying attention to search volume data may be a major mistake!
How does search volume play such an important role in the decision-making process? Easy. It’s a significant indicator of one of the most fundamental aspects of any business.
Search volume represents demand.
Outside of Amazon, businesses invest an abundance of time and money into research for demand validation.
What are people looking for? Where are they going for these items? How much inventory should we have in stock? What are interested customers willing to pay? Can I expect steady sales all year long?
With the right research tools, sellers can not only answer all of those questions but can actually reverse engineer product ideas based on years of exhaustive market data. Every metric tells a unique story, and search volume estimates tell the story of demand.
We can safely say this due to the nature of Amazon being a search engine solely for commercial purposes. Others may recommend utilizing Google search volume data for research, but there’s a huge part of the equation you’d be missing out on by not using search volume from Amazon.
Searches on Amazon are made with the intent to buy
Check out your recent search history on Google. How many of those searches were made with the intent of buying something? Chances are, not many. On the other end, it wouldn’t make much sense to search for something on Amazon without some level of interest in buying something.
So why make a business decision based on searches made with no intent to buy?
Outside of Amazon, Google Keyword Planner and AdWords are incredible tools for seeing what’s generating buzz. From that, you can increase your visibility through PPC advertising outside of Amazon. But Amazon and Google serve two entirely different purposes as search engines.
Google organizes information and makes it universally accessible. Amazon is much more focused on commerce and making transactions as frictionless as possible for sellers and buyers.
Utilizing search volume data for Amazon instead of Google eliminates the guesswork of buyer intent. As a result, you can focus on the level of interest in your market directly from your audience.
Where can I find Amazon search volume?
Viral Launch’s search volume estimates (available with any plan with access to Keyword Research) display search volume history ranging back years to keep an eye on product seasonality.
Every product is bound to have peaks and valleys in sales. But not paying attention to seasonality is an all-too-common rookie mistake.
For example, let’s take a look at the above chart for the search volume history of “kettlebell.” If you were to have looked at search volume estimates in April or May of 2020, you might believe you’ve hit a grand slam product idea.
From this graph displaying years of search volume data, we can reasonably conclude traffic for kettlebells skyrocketed as gyms closed. As a result of COVID-19, gym rats worked out more at home.
As more people receive their home workout gear and gyms re-open, searches have seen a downtick in the previous two months and will likely continue regressing to the norm. While “kettlebell” receives a significant chunk of searches, it’s a far cry from the peak outlier demand in the months after gyms started closing due to COVID-19.
Current search volume provides a zoomed-in snapshot of the moment, and historical search volume data delivers a more complete picture. Using historical search volume data allows us to increase the sample size we’re drawing from for more accurate data.
Use search volume estimates to find and validate your niche.
As more and more household brands flock to Amazon and top-selling third-party sellers continue to mature, competing with dominant products is increasingly difficult due to saturation.
By no means does this mean that highly profitable products aren’t out there, it just means the strategy for finding them has been updated to fit the current landscape of Amazon as it continues to mature as an e-commerce giant. And for aspiring sellers, it only intensifies the need for astute strategies and well-informed research.
Because of that, we recommend avoiding the oversaturated, uber-competitive markets that are difficult to compete within. While not impossible to succeed in a saturated market, more barriers to entry represent additional risk.
You can find our comprehensive deep dive into our recommended strategies for finding niches and performing product research in today’s FBA climate here.
In a nutshell, finding niches is beneficial to sellers because they have an increased likelihood of success and an opportunity to own a segment of the market as both Amazon and your brand grow.
With this strategy, you’ll want to avoid overly crowded markets while also making sure you have an audience. With Keyword Research, you can quickly ensure this by utilizing the Estimated Search Volume filter and setting your search parameters.
Utilizing the Estimated Search Volume filter in Product Discovery’s Keyword Search is an excellent way to hunt for niches.
Once you’ve narrowed down your filters to match your goals, just click Show Keywords, and you’ll be provided with a sortable list that includes estimated search volume as well as data including the average price, sales, reviews, and revenue in that keyword market. Those on annual plans will also see a Product Idea Score. This score incorporates multiple metrics into one score on a 1–5 scale for quick and easy validation.
Using your search parameters, you’ll see a full list of keywords on Amazon that meet your criteria. This allows you to evaluate some of the most important elements of product research at once.
As you sift through the results, be sure to use market research tools such as Market Intelligence to further validate product ideas with data, estimates, and insights.
Use this powerful data to your advantage
Don’t make the mistake of overlooking search volume data in your product hunt! Without tracking current and historical search volume for a product’s seed keyword, you’re vulnerable to critical oversights in your research.
At Viral Launch, we believe the most-informed decision is the best decision. Having reliable and accurate search volume estimates in your arsenal is an essential element of making the most informed decision possible.
Don’t miss out on the valuable insights from Amazon search volume estimates! Add Keyword Research to your research plan for reliable search volume estimates and an edge over the competition!
Now that you’ve got both feet on the ground as an Amazon seller, the tricky part is finding what products will put you ahead of the pack. You can look at snapshot estimates from a random collection of sourcing tools, piecing together what you hope is an accurate picture of the market and product — or you can improve your chances of sourcing only the right products by making use of the right Amazon market intelligence.
Viral Launch’s Market Intelligence tool gives you the most comprehensive access to Amazon-wide insight across billions of different data points. With it, you can make truly informed decisions and validate any product before you ever launch it.
What Real Amazon Market Intelligence Looks Like
Intelligence is nothing without data, which is what makes our Amazon Market Intelligence tool so valuable. It’s the only tool that can collect and leverage data points from across Amazon’s entire market. With the data the tool gathers for you, you can glean the kind of insight and analysis that can help you almost predict the success of any product launch. For example, the billions of data points you’ll have access to can help you assess markets and products by:
1. Name brands: See whether any big household names or Amazon itself is selling in the market. It will be easiest for you to compete against other smaller brands, so stay away from markets that are dominated by one brand or a few dominant brands.
2. Sales spreads: If a few products are claiming most of the sales in the market, it’ll be harder to claim a piece of the pie, especially as a newcomer. Look for markets where sales are spread pretty evenly between the products on the first page.
3. Competitors’ intelligence: Finding a few products dominating sales spreads isn’t necessarily a bad thing. Use the Market Intelligence tool to reverse-engineer their strategies. For example, track what keywords the dominating products use in sponsored ads and make a list of your own variations.
4. Market trends: Sales trends tell you a lot, but if you want to determine which trends are fads and which are actual depictions of the market, you’ll have to look at data from across a few years. Use market trends to avoid investing too heavily in the next fidget spinner.
5. Price margins: Even with a great product, you won’t make a profit unless you can cover Amazon’s fees and still stay price-competitive. You can research the cost of sourcing units from a site like Alibaba, then plug it into our Amazon FBA calculator.
6. Product reviews: Speaking of being competitive, you can enter the competition a lot sooner in a market where mediocre performance is the norm. Research reviews throughout the market and pay special attention to those that are generally low.
7. Product fulfillment: Finally, stay away from markets filled with FBA (fulfilled by Amazon) or AMZ (Amazon original) designations. If your products are FBA, then you can compete more effectively in markets that are mostly filled with FBM (fulfilled by merchant) products. Data can mean the difference between entering a market and thriving in it — or sinking fast due to poor intelligence. With our Amazon Market Intelligence tool, you can make sure you end up on the thriving side every time. To learn more, sign up for a free trial today!
We are taking a deep dive into the foundation of every successful strategy on Amazon: keyword research.
When looking to private label a product on Amazon, it’s extremely evident that the markets are flooded. Now more than ever, it can be an incredibly difficult feat to drive sales for a new product with no reviews and no sales history. That said, there is still a (literal) wealth of opportunity in the Amazon space for savvy sellers who package a well developed strategy with their product offering.
At Viral Launch, we’ve seen one recurring fundamental reason for a product’s failure on Amazon… lack of strategy. It’s not good enough to source a product, throw up a listing, and wait for the sales, and (perhaps unfortunately) focusing on sourcing a product that’s objectively ‘different’ or ‘better’ than your competition doesn’t matter much when you’re given one image and around 100 characters to draw the attention of shoppers.
Everything on Amazon comes down to strategy, and strategy is the result of thorough research. Sourcing the right product and ensuring that it’s positioned correctly in the market is the key to driving success on Amazon. While we have recently published two lengthy posts which cover how to generate product ideas and how to launch and rank products, due to ever increasing importance, we’ll be taking a deep dive into the foundation of every successful strategy on Amazon: keyword research.
The Strategy Behind a Well Crafted Listing
It’s important to recognize that while many people think of Amazon as more of a digital store, the reality is that Amazon.com is first and foremost a search engine. For this reason, when creating a product listing, it’s important to understand that your written content must serve dual purposes.
The first purpose is to produce an attractive listing. Like an advertisement for your product, you need to ensure that you’re using persuasive language and providing a value proposition to help sell your product. If your content doesn’t make sense, doesn’t read attractively, or doesn’t adequately explain the tangible value of the product, shoppers will inevitably be inclined to choose a different product.
The second purpose of your listing is to appeal to Amazon’s search engine. Because your product is inevitably found through customer search queries, ensuring that you’re understanding the keywords that shoppers are using to find your product (and understanding how to prioritize them in your listing) is critically important for driving success. With this, diversifying your keywords as much as possible helps you to index within the results of more searches, thus widening your listing’s potential visibility.
Ultimately, a well optimized listing (a balance between keyword rich content and sales language) is the cornerstone of a successful product. If you focus too heavily on making a persuasive appeal to your shoppers, there is a good chance that you’ll end up limiting the quantity of searches for which your product will be indexed. On the other hand, if you focus too heavily on overloading your listing with high value keywords, it may show up in more searches but it’s likely that the product’s conversion will be low. Even if you can get your listing in front of people, if it doesn’t read well, or draw people in, you’re not going to be able to maximize your sales perspective.
Great listing content is a fusion between art (sales language) and science (keyword research). The art of this equation is something that comes from understanding your product and the benefits, differentiating factors, and qualities that can persuade buyers. The science comes from market research, data analysis, and in most cases, a quality set of tools to help your pursuit.
This article will be addressing the science of keyword research.
While the purpose of this article is educational and not a sales pitch, and while there are several tool suites that can be utilized to help you conduct research, this article will be referencing the Viral Launch research tools for ease of reference.
While some of this should even be done prior to sourcing a product, when beginning to analyze keyword markets, Keyword Research should be the foundational reference point for building your listing content. To start, you’ll want to search for your product’s primary keyword. This is logically the keyword that you would search if you were looking to buy a product in your market. From there, Keyword Research will populate a list of associated keywords along with key metrics such as search volume, relevancy score, etc.
This list of keywords of populated keywords contains many of the important search terms that you should seek to prioritize in your content. Because Keyword Research is algorithmic, however, you’ll need to review these results to pull out the best keywords to include.
For starters, sort your results by search volume. This should give you the most competitive keywords in your market. These are the terms being searched most heavily by shoppers and have the potential to drive a large volume of sales. That said, they’re also going to be difficult and expensive to rank for, meaning that while it’s important to include these terms in your content, you’re going to want to target some quick-win keywords as well that can help you to drive sales early on.
It’s important to note that you’ll also want to remove any ‘branded’ keywords from consideration. For instance, if you’re selling socks, keywords like ‘Nike socks’ may have high search volume, but since you’re not Nike, these keywords can’t be targeted by your content.
Once you have identified a good selection of high volume keywords, it’s important to now look for keywords with high opportunity. A high opportunity keyword is a keyword that is not included in the content of many/any competing listings. Within Keyword Research, opportunity is scored from 0-1000. Keywords with a 1000 opportunity score means that no listings on page one have this exact phrase keyword included in their content. The lower the score, the more listings include this term.
To identify high opportunity keywords, it’s recommended that you sort by opportunity score, and look for any keyword with an opportunity of 750-1000 with a search volume of at least 1000 searches per month. There are typically plenty of keywords that have high opportunity, but if no one is searching for them, there isn’t much potential to drive sales. Because each section of a listing has a character limit, it’s important to prioritize keywords that have better potential to drive sales (i.e. keywords that have search volume).
Finally, performing a quick review of high priority and high relevancy keywords will help you to catch any other terms that may have been missed. Particularly, priority is determined by assigning a score based on search volume and opportunity, meaning that it will help to show keywords that are easy to rank for while having some degree of customer audience.
It’s also recommended that you repeat this process by searching several high volume keywords within Keyword Research. Though the majority of the keywords should overlap, ensuring that you’re not missing any other valuable keywords can be helpful.
As you collect these keywords, you are able to move them over to your keyword bank, allowing you to create your listing within Listing Builder. You’re also able to copy and/or export your list to a CSV file. It’s highly recommended that you keep an organized record of your targeted keywords for reference for tracking and advertising purposes.
While using Keyword Research is a great way to understand your market and build a collection of high volume keywords, it’s also important to understand your product market within the context of the competition. By understanding what keywords your competitors are running ads to, driving sales through, prioritizing, and/or ignoring, you can begin to build a strategy around how to position your product within a market.
With Competitor Intelligence, you can review your competition’s keyword data and use their data to your advantage. Through keyword analysis on several market competitors, you can construct keyword lists based on a few different considerations.
Primarily, Competitor Intelligence can show you what keywords are driving sales for your competition. The tool is able to present any listings, organic ranking for each keyword, ad placements, and keyword search volume, allowing you to review and monitor the keywords that correlate to a bulk of your competitor’s sales. Through this, you can start to build a profile of the keywords that drive the most sales for listings in your market and prioritize your listing content accordingly.
Additionally, using Viral Launch’s Reverse ASIN 2.0 technology, Competitor Intelligence will also show relevant keywords for which your competitor is not indexed and/or ranked for. Comparable to opportunity score, if there is little to no search volume for these keywords, they may not be worth prioritizing. However, if your top competitors are missing a few quality keywords in their listing, it may create opportunity for you to drive sales with little competitive resistance. Especially early on in the life of your listing, understanding how to drive easy sales by capitalizing on the missed opportunities of your competition can be a useful tactic to begin building visibility, sales history, and reviews. This data has the power to help you drive sales through opportunities that your competitors don’t even know that they’re missing.
Ultimately, through viewing the keywords that your competitors are using to drive sales, as well as the overlooked keywords which have the potential to drive sales, you can ensure that you’re not missing a single opportunity!
For Existing Product Listings:
If you have an existing product listing that you’re seeking to improve, the best strategy is to start by using Listing Analyzer. By linking your Seller Central account to your Viral Launch account, you’re able to seamlessly pull your product catalog into the Viral Launch interface.
From the Listing Analyzer tab in your Viral Launch dashboard, you can run an analysis on your product. Our software will pull metrics and keyword data from your listing, presenting you with an overview of your product in comparison to the market, along with a listing quality score. Through this tool, your listing’s images, reviews, competitiveness and copy are analyzed and you are also provided with a list of competitive and comparative products.
Additionally (and most importantly within the context of this article), Listing Analyzer will also provide you with an extensive list of keywords which are relevant to your product market. This data is relatively similar to Keyword Research (with regards to the metrics provided), however you are also able to review whether or not the keyword is being utilized in your listing.
From this list, you are able to select keywords that are relevant to your listing and move them into Keyword Manager to monitor, track, and/or incorporate into your listing.
On a final note, it’s important to make sure that you’re putting your best foot forward when it comes to optimizing your listing with the strongest keyword spread possible. That said, if you are working with an older product, particularly if it’s selling relatively well, changing your listing content can create a ‘reshuffling’ of your keywords within Amazon’s system. Because of this, you can sometimes see a short term detriment to ranking and sales as your listing is reincorporated into Amazon’s SEO structure. Therefore, while it can be beneficial in the long term to fully optimize your listing, you may need to weigh this against the potential setbacks to determine if and when to change your content. Ultimately, while this can be a good tactic for working with a new listing, altering your content becomes more complicated as your listing ages.
For a New Product Listing:
If you are beginning your keyword research prior to having an active listing on Amazon, you will want to begin your process by building out your keyword list through the use of Keyword Research and Competitor Intelligence.
Once you have a listing on Amazon, it’s advantageous to run your product listing through Listing Analyzer to further ensure that you’re maximizing your keyword/ranking potential.
While you do need an existing listing in order to run an analysis, it’s worth it to think of Listing Analyzer once your product listing is up on Amazon as a final check to verify listing quality. At this point, you can review the provided keyword data through the tool and make any final adjustments if you notice any missed terms.
Note: If you are running an analysis on a brand new listing, it’s unlikely that you will have a perfect score, as review quantity, revenue generation, etc. in comparison to the market factor in to the assessment. While you want to note these data points as a means of knowing what’s needed to maximize competitiveness for your market, early on, the best use of Listing Analyzer is to verify your keyword list and review competing and complementary products for the purpose of product targeted advertising.
Now that your keyword bank is compiled (and hopefully added to your listing), it’s time to start benefiting from your research. Keyword Manager helps you to track your keyword bank and understand how and where you’re driving sales.
Considering it’s almost impossible to go a single day without encountering the immense reach of Amazon, it’s obvious that the largest e-commerce marketplace is also an insanely saturated e-commerce marketplace. While employing thorough keyword research into your listing is a critically important element of success, it is very unlikely that you will magically appear at the top of the search results. Amazon favors products that perform and as a new product, you have to prove that you can get sales in the market in order to gain visibility. Driving sales is not always easy, especially with a new product with no reviews or sales history, but with the proper strategy around marketing and advertising, you can begin to generate sales and improve keyword ranking (thus driving organic visibility).
By utilizing Keyword Manager to track your relevant keywords, you can monitor your progress to better determine which keywords are producing the most growth, and which keywords you’re having more trouble with. You can use this data to develop a strategy to continue building momentum, and you can ensure that you’re not missing a beat by establishing notifications and hourly tracking on your most critical search terms. If your ranking fluctuates, or your ad positioning changes, you’ll be able to respond quickly and efficiently to address the situation.
While Keyword Manager isn’t explicitly a keyword research tool, it’s a great resource for helping you to fully capitalize on your keyword strategy. With the ability to review organic and sponsored positioning, prioritize by opportunity and search volume, and track your movements in your market, Keyword Manager gives you the tools you need to harvest the fruits of your (keyword research) labor.
As more sellers enter the Amazon marketplace at an accelerating pace, the importance of thorough research and a deep understanding of your product market is crucial for driving success. Robust keyword research is the cornerstone of any successful strategy for launching a product on Amazon. Developing a well prioritized bank of keywords helps you to establish a wide breadth of searches through which you can gain visibility and sales, while also enabling a deeper understanding of how to use PPC and marketing to effectively grow your product.
Ensuring that you have the broadest range of keywords possible, and knowing how all of your keywords interact with the market informs you on how and where to drive sales and ranking. Through adequate keyword research, you can understand where your competition drives sales, which keywords generate the most sales for your market, and which keywords you can most easily gain ranking traction for.
The importance of performing your due diligence when performing keyword research cannot be overstated. Implementation of this process will ensure that you’re well positioned to take on the competition and achieve success with your business. To learn more about how to successfully launch and rank products, check out our blog post here.
As an Amazon seller, you know that product research and selection is by far the most important decision you will make. The product that you decide to sell is the largest determinant of success or failure for your Amazon business as a whole. The wrong product sets you up for failure from the very beginning, while the right product allows for incredible money-making opportunities.
In recent years, selling on Amazon became increasingly competitive and difficult, and because of that, finding the “right” product has also become more difficult. There are more sellers who are using more sophisticated software and marketing dollars, allowing them to extract the best opportunities and bully their way to a great sales volume!
In such a competitive landscape, the question becomes, “Where is the opportunity for me to succeed?” And, “What is the probability for that success?”
Here at Viral Launch, we’ve been honored to help thousands of sellers build successful Amazon businesses over the years. This experience has provided deep insights into the tactics of super successful Amazon sellers, and it helps us stay ahead of the trends.
Despite the increased competition, we’ve put together this in-depth guide to walk you through a new product research strategy. This process will significantly improve your probability of sourcing money-making products every single time.
Unlike a typical guide to product research, this new approach will change the game, helping you to identify profitable product ideas while circumventing your competition.
All the data we’ve collected points to this being THE most comprehensive Amazon product research and selection method available!
Phase 1: Define Your Perfect Amazon Product
In order to find “the perfect product” you have to know what the perfect product actually looks like.
Imagine being asked to find your mom’s friend Howard in New York City’s Central Park during peak summer time, but you have no idea what he looks like and have never been given any details about his appearance (height, age, hair color, etc.). If you don’t know what you’re looking for, “he” is hard to find.
Understanding what makes the perfect product for you is the foundation to product research, so we want make sure we get this step right!
Step #1: Know Your Budget
It’s pretty easy to talk to a manufacturer, or page through Alibaba, and get a feel for how much a shipment of product will cost. That said, understanding your necessary budget for completely sourcing a product is quite a bit more complicated. You will incur regular fees such as your Seller Central subscription, fulfillment and referral fees, and logistical costs (importing and shipping to Amazon), one time fees for things like packaging design, professional photos, and trademarking, and finally, fluctuating costs for things like advertising, promotion, and review generation. If you’re looking to source your first product, there will also be general business related costs as well.
Understanding these fees is crucial to building a successful Amazon business, or any business for that matter. Logging, predicting, and planning for these costs will help you to have a better sense of your potential margins, profit, and growth.
So how do you apply this to sourcing a new product?
You need to know what you can afford. Amazon is an almost limitless sea of products. You need to look at your budget and figure out what you can afford to source, what quantity you can afford to source, and how much capital you will have to reorder before you start seeing any cash flow.
If you can only afford to order 100 units of a product, but it can easily sell over 1,000 units in a month, it’s probably not the right product for you. If it’s going to cost you $15 per unit to source a product that sells for an average of $20, it’s probably not the right product for you. If ordering a first shipment is going to totally absorb your budget, you’re either going to need more capital or a different product.
Understanding your budget is a crucial first step to finding a successful product.
Step #2: Know Your Revenue Goals
It’s all too common for a new seller to look at Amazon as a ‘get rich quick’ venture. Heck, there are thousands of videos, social media posts, and gurus talking about how they made $1 million a month on Amazon and how you can too if you just buy their course, software, or subscribe to their email list!
The truth is, people DO rapidly find unbelievable success on Amazon…but people DO also win the lottery. Starting a business can be a gamble, and you are assuming risk. But unlike the lottery, you have the ability to play smart.
One of the most important ways to do this is to set realistic revenue goals. The three main variables that determine your potential revenue are budget, sales quantity, and selling price.
When looking at the relationship between budget and revenue, it’s somewhat analogous to an investment portfolio. When investing, you typically find that more capital produces higher gains (assuming that the market doesn’t collapse). You can invest aggressively, with increased risk but increased potential reward, or you can invest in safer options, which are lower risk but have smaller rapid growth potential. In either case (unless you hit it big last year with cryptocurrency), if you’re investing $5,000, you’re not going to (quickly) turn it into $1 million.
The same can be said with Amazon. There is absolutely a risk vs. reward correlation, but you’re not going to quickly hit $1 million in revenue from a $5,000 investment. Amazon can be an outlet to quickly build a successful business, but it’s not magic. When establishing your goals for revenue, aligning your expectations with your budget is an important consideration.
With regards to sales quantity, a market research tool (like Market Intelligence) gives you the ability to understand the potential for a product, but you cannot do much to influence it. For example, if your top competitors are selling around 500 units per month, it’s unrealistic to think that you can sell 1,000 units per month. Markets can be influenced by seasonal cycles and social trends, and you can employ marketing tactics to increase awareness. However, when setting a revenue goal, it’s important to know that your potential is dictated by the market demand.
On the other hand, you do have some control over price (though not as much as you might think). When sourcing a private label product, you can technically sell your product for any price that you’d like. That said, your price should be limited (if not dictated) by the competition.
Think about this from the perspective of a shopper. If you’re looking to buy a mousepad on Amazon, are you more likely to buy one for $5 or $20? The $20 pad might be a bit fancier, but all you’re probably looking for is a basic black mousepad for your desk.
So as a seller, you can create any price for your item but a shopper can also choose any alternative. A higher-than-average market price can limit your potential sales quantity, therefore limiting your potential revenue.
Returning to the concept of setting a revenue goal, it’s important to look at the prices and sales quantities in your market. If you’re looking to generate $20k in monthly revenue and you’re selling your product for $20, you need to be able to sell 1,000 units/month. This is definitely doable in some markets, but if the top sellers in your market are moving around 500 units per month and/or if the average selling price in your market is $10, you may need to set a more realistic goal or look for a new product.
But, as Amazon becomes more competitive, it’s becoming more important to not put all of your eggs in one basket. Diversity (much like a stock portfolio) can be the key to success in e-commerce.
Say you can’t realistically hit your revenue goal with one product. Maybe you can do it with two.
As markets get more crowded, review quantities increase, and prices decrease, looking for several smaller, promising opportunities can prove to be more beneficial than looking for that one gold-mine product.
Step #3: Understanding Micro-Niches
Now that we’ve covered your budgeting and goals, it’s time to understand how to find the right product for you.
Amazon has changed a lot over the last few years. Competition, and Amazon’s dominance over e-commerce, has increased. In the past, the strategy was to find a market/niche to sell in, such as bed sheets. Now, because of the depth of competition, focusing on these broad markets can spell doom for a new product. While it’s true that the largest search volume remains in these broad markets, the depth of competition and a product’s ability to convert make it incredibly costly to market and difficult to succeed.
Instead, finding a product should now be about looking for micro-niches. A micro-niche is a market within a market… one with more specificity. For instance, instead of sourcing a set of bed sheets, you should look at sourcing something like flannel sheets. This market may not have the same depth of search volume, but shoppers will still be searching with this keyword, and you’ll be able to filter out a lot of competition. Additionally, because the niche is more specific, your product is more likely to consistently convert.
As Amazon grows, there is a bigger pie to be shared among markets. As competition on Amazon grows, each markets’ piece of the pie gets shared between more products. With that logic in mind, the concept of micro-niches can be employed to find easier to reach pieces of the growing pie while avoiding a lot of markets that are being fought over.
Phase 2: Find Hot Micro-Niches
So how do you find these micro-niches that provide opportunity within more specific markets?
We’ve added a new feature to our product finder, Product Discovery, to make your product research easier than ever. This tool allows you to input what kind of product you’re looking for with filters, which will result in identifying product markets that match your specific criteria.
Within Product Discovery’s Keyword Search function, we’ve included a new filter called ‘Keyword Contains’. This feature allows you to search using a main keyword to help identify profitable micro-niches within a specific market.
To illustrate the use of this feature, let’s walk through how to quickly and efficiently identify micro-niches within the Product Discovery.
Assuming that I don’t have a large budget to work with, I want to look for something that I can source for a low cost. While you can definitely use a product-oriented keyword (like ‘bed sheets’) to find micro-niches, I’m deciding to base my search on a low cost material: paper.
While selecting specific categories is typically my first filter, in this instance (because I don’t necessarily know what I’m looking for) I’m going to leave my categories open. To conduct this search, I’ll add a few filters, and Product Discovery will show me markets that match what I’m looking for. (And remember, this is simply an example. Feel free to personalize your filters. The more you change, the more unique your results will be).
I’m starting by adding the keyword ‘paper’ to the Keyword Contains field, inputting a minimum monthly revenue of $5000 (to meet my revenue goals), and a maximum review quantity of 100 (to avoid markets that are highly competitive).
One important thing to note is that I’m not providing data for all of the filters. The more specific you are with filters, the more restrictions are placed on your results. I like to start my searches with a few important metrics, then if needed, I’ll start adding additional parameters.
That said, when searching for micro-niches, it’s also important to make sure that there is an audience of people searching for your product (or, existing demand). I might be trying to avoid the heavily competitive markets, but if I’m sourcing a product that no one is looking for, I’m not going to be successful. For this reason, I’m also going to click on the Advanced Filters menu and add a minimum exact search volume of 3,000. This means that I only want to see keywords that 3,000 or more people are searching for each month.
Once I click Show Keywords, my results appear. Each result is a product idea, along with market average metrics, and they all match my inputs. I then filter my search based on star rating to see the best ideas first. The star rating is a 1-5 scale, which is Viral Launch’s initial indicator of the product idea’s potential. This rating is generated programmatically and should be used as a first-check, but it’s crucial for you to dig into the data further and decide if the product is right for your business. Note: The Product Idea Score is only available on annual plans.
From there, I quickly pin five different products that looked interesting to me, and I will analyze each one more thoroughly. Moving over to my pinned ideas page, I have isolated ‘white paper bags’, ‘parchment paper sheets’, ‘white wrapping paper’, ‘gold paper plates’, and ‘crinkle cut paper shred’.
Note: Your pins are unique to search type. For this reason, I will click on the ‘Keywords’ tab within the Pinned Ideas menu.
All of these markets have an average of less than 100 reviews, which indicates a relatively low barrier to entry for a new product. Three of the five have a typical sales trend, which implies that sales have remained relatively constant month over month. Average selling prices are relatively low, which can sometimes be of concern, but assuming that manufacturing and shipping costs are low, my product may still have a healthy margin. These markets also look promising from a revenue perspective, ranging from $7k-$22k per month.
Phase 3: Validate Your Product Ideas
Now that I have decided on a broad market that I’m interested in and have found a few micro-niches to hone in on, it’s time to do a deep dive and identify which products I may want to look into sourcing. I am going to use Market Intelligence, our in-depth product research tool, to further investigate my potential products.
Step #1: Logical Processing:
When deciding on a product to source, your first step after compiling a list of ideas should be to think about them critically. There are a few key questions that you can ask (and answer) based solely on your own intuition. This can be especially important when looking for a micro-niche.
The very concept of a micro-niche focuses on a specific product characteristic in order to circumvent the more competitive primary market. That said, it’s critically important to make sure that people are actually searching within your micro-niche.
You can use a tool like Keyword Research to view the search volume for your keyword, but at a more basic level, putting yourself in a customer’s shoes and asking whether or not you would use this phrase to search for your product can be an indicator as well.
When thinking about your product idea, do any brands come to mind? This can be an important question. If a product market has strong brand awareness (or brand loyalty), it’s going to make it harder to penetrate the market. If you can name some brands, it doesn’t automatically invalidate the idea, but it is something to consider.
For instance, if you’re buying a stapler, you’re likely aware of Swingline, but as long as a stapler staples, has decent reviews, and a low price, chances are most buyers aren’t going to be brand loyal (unless they’re fans of Office Space).
Alternatively, other markets have stronger brand association and loyalty. Even if it’s a dollar or two cheaper, Harvey’s Homemade Toothpaste is going to be fighting a really tough uphill battle against Crest and Colgate. It might be an amazing product and a better value but because most consumers have (hopefully) seen and used a few name brands of toothpaste for most of their lives, it’ll be almost impossible for Harvey to muscle his way to the top of the market.
While I won’t go into all of the possible questions that you could ask in this phase, a few others are:
Do I feel like I can price this product to be competitive and have a wide enough profit margin?
Do I think I can make enough profit per unit for this product to be worth selling?
Am I chasing a fad (where demand may decline before I can get my product to market)?
Am I too passionate or not passionate enough about this product?
Is my intuition telling me anything about this product or market? If so, what will I need to research to reassure myself?
In the Amazon space, some sellers rely heavily on their own gut instinct or personal passions when sourcing. This can sometimes work and it’s important to believe in your product, but other times, if you source something you’re too passionate about, you’re more likely to spend more to improve or customize your product (cutting into your margins) and/or throw good money after bad (by entering a competitive, expensive, or nonexistent market). Other sellers can alternatively get lost in the data, which can lead to lost time, missed opportunities, and a never ending quest for perfection.
I recommend trying to work somewhere in the middle. Use data to hunt out advantageous markets, use your brain to think critically about them, and return to the data to test the products that made the cut.
Step #2: Sales to Review Ratio:
First, you want to check out what the sales to review ratio looks like for your pinned products. The sales to review ratio is a measure of how quickly you will be able to compete, as a new seller, in any given market. This is calculated by taking the average monthly sales among top sellers divided by the average number of reviews. If a market has a high sales to review ratio, it means that sales are, on average, much higher than reviews. This signifies that a new product has lots of opportunity to gather reviews, plus there is a low review threshold to reach before shoppers consider that product as a viable option among the other options in the market. Because reviews provide consumer confidence through social proof, and because reviews are not easy to acquire, identifying a market where you won’t need to gather as many initial reviews to become competitive can play to your advantage.
Thinking about this concept logically, certain markets are more review dependent than others. If you’re buying a pair of bluetooth headphones on Amazon, reviews are going to be crucial to your purchasing decision. You want to see opinions on audio quality, battery life, durability, etc. On the other hand, if you’re buying something like wrapping paper, unless the reviews are horrible, you’re probably not going to be as concerned with them. At the end of the day, it’s a roll of printed paper. As long as it meets the stated dimensions and it doesn’t spontaneously combust, it should work to wrap a gift.
Looking at my pinned ideas, the average market-wide sales to review ratio ranges from 16 to 32. This means that on average, products in these markets are generating that number of sales per month for each review. All of these rates are relatively high, which is a good sign. Alternatively, if I’m looking at markets that are generating only 2 sales per review, that might be concerning for me as I’m trying to enter the market.
In the interest of due diligence however, I don’t want to stop there. I’m also going to want to view sales to review ratios on a product-by-product basis within Market Intelligence.
It’s important to note that some noticeable factors can contribute to the sales to review ratio when reviewing at the product level. Whether good or bad, this information can help you to better understand your market.
Here’s the data for ‘crinkle cut paper shred’:
Looking at the individual sales to review ratios for this market, I’m seeing some optimistic information.
Starting with the product highlighted in yellow, the sales to review ratio is below average for the market. That said, looking at the date that the product was listed, I can see that it has been selling for a few years. Because of this, I’m seeing that this product has a higher than average review quantity. It’s actually selling relatively well for the market, however because the price point is above average, there’s a good chance that it’s limiting sales potential.
Checking out the product highlighted in red, I’m seeing a super high sales to review ratio. It’s a newer product with 2 reviews but it’s selling really well. A high sales to review ratio does make sense when a product is newer, if it sells well. For me, this is promising because it provides evidence that I can sell well without having to gather a large quantity of reviews.
While the listing dates in this market prove the contrary, higher sales to review ratios can be a sign of a newer market, which is something to also keep in mind. If you’re looking at sky-high ratios in a newer market, by the time you have a product sourced, those products may have accumulated more reviews, making the landscape more competitive.
Finally, looking at the product highlighted in blue, it has a pretty high sales to review ratio. Looking into this more, I can see that the product has been listed for a little over a year, and despite only having 13 reviews, it’s selling really well for the market. It’s price is relatively low, providing a potential explanation as to why it’s selling well. That said, it’s not the cheapest option.
This product is one to review more specifically. Because it’s not the cheapest option, and because it doesn’t have a wealth of reviews, it may be worth reviewing other aspects that may contribute to this product’s success. Is there a color preference? Is it a larger size? These variables may help inform sourcing decisions.
As a brief comparison, here is the data for ‘bluetooth headphones’:
As you can see, the sales to review ratio in this market is incredibly low. The massive review quantities in comparison to sales would make this market exceptionally difficult to compete within.
Step #3: Sales Depth:
It’s important to also observe how sales are divided within the micro-niche. If only 2-3 products are generating 90% of the sales, it’s going to be difficult for you to capture a reasonable share of the market. If sales are relatively divided across the first page (and maybe even the first few pages), it means that you don’t necessarily need to rely on hitting one of the top spots to hit the mark on revenue. It’s much safer to bet that you can rank in the top 10 or top 15. While you obviously want to have the best product in the market, I suggest shooting for the moon, while being okay with hitting the market average.
Using my ‘crinkle cut paper shred’ example, but this time reviewing the sales column, I can see that sales are pretty evenly dispersed throughout the page. This means that even if I’m unable to push to one of the top rankings, I would still have the ability to generate a decent volume of sales.
By comparison, here is another market with a poor depth of sales:
As seen here, there are a few products generating thousands of sales while others are selling in the single digits. In this instance, I know that it’s going to be difficult to compete with the few top sellers.
There are a few different reasons for a poor depth of sales in a market.
It could be that a single brand (or a few brands) dominate the market. This is most common when searching a branded keyword, such as ‘Nike sweatshirt’, but you can also encounter it with non branded keywords with strong brand awareness/loyalty, such as ‘cotton swabs’, where Q-Tip and Johnson & Johnson vastly outsell much of the competition.
This can also happen within private label dominated markets if a handful of sellers have a disproportionately high review count, a much lower price, or a more established product.
Additionally (as is the case in example above), you may not be viewing the primary keyword for a market. This is typically evident if you see large volume sellers in lower positions. If a keyword has a lower search volume, a product with far fewer sales may rank better. This is because it’s able to drive more sales through this specific keyword. However, when looking at a related keyword with higher traffic, the products with high sales volume likely rank better. An example of this would be looking at a keyword like ‘lavender bath bombs’, when the primary keyword is ‘bath bombs’. The keyword ‘lavender bath bombs’ only gets a few hundred searches per month, yet some of the results are selling thousands of units. By comparison, the keyword ‘bath bombs’ receives around 230,000 searches per month.
Step #4: Price & Margin Check:
This can be a bit more tricky, but the next step is to try to get a feel for what margins you can expect. You want to look at average prices in the market and compare that to any sort of sourcing estimates you may have found. Market Intelligence can be used to get a rough idea of the profit margin for a product, but it’s definitely important to compare this to any real numbers that you’re able to obtain (quotes for manufacturing, logistics, etc.).
It’s also important to understand Amazon’s FBA and referral fees. FBA fees are based on shipping and storage costs. A referral fee is the cut that Amazon takes for each sale made and is a fixed percentage based on category. Amazon provides a breakdown of their FBA pricing tiers and referral fees by category on Amazon Seller Central.
If you’re looking for more information on calculating FBA fees, we have a blog post that walks through the process in more detail: How to Calculate Your Amazon FBA Fees and Projected Revenue. Additionally, within Market Intelligence, you’re able to view our estimated unit margin for a specific product by clicking on the the orange Unit Margin metric.
As you begin to fill in some of your own costs, Market Intelligence also includes a Cost Calculator to help you determine you own potential margin.
Typically, I like to review the lower prices on page one. If I’m able to turn a profit while pricing on the low end of my competition, I know that I have some flexibility to adapt to market changes. If I can’t afford to source for a competitive price, I may want to avoid this particular market.
Step #4: Check Tips, Warnings, and Alerts:
On the VL Analysis tab of Market Intelligence, you’re able to view some quick tips, warnings, and alerts that you may have otherwise missed. This can help to clue you into seasonality, sales depth, review concerns, etc. and can help provide a quick overview of any market conditions that may be of concern.
Step #5: Seasonality
Some sellers choose to steer clear of seasonal markets, while others welcome the influx of cash during peak seasons. Either way, seasonality is something that you want to be aware of when sourcing a product and purchasing inventory. By clicking on the Market Trends tab on Market Intelligence, you’re able to see how a product has sold over the course of a year.
If you’re looking for a seasonal product and you find one that is selling well in winter, you may want to look to source this product in summer/early fall in order to capitalize on the peak selling season. If you’ve missed the seasonal window for the year, it might be worth sourcing a small quantity to start generating a few sales and reviews, or you may want to keep it in your back pocket until next year while keeping a longer term eye on the market.
When looking at a market like ‘Christmas decorations’, you can see that the market is highly seasonal:
Alternatively, while there are always going to be fluctuations in a market, when looking at a market like ‘toothpaste’, the sales spikes are much less dramatic:
As mentioned previously, just because a product is seasonal does not mean that it’s not viable. Sellers can make a killing on seasonal products and only need to be focused on them for a few months out of the year.
The important thing is to understand that sales and demand will not be consistent throughout the year. One of the most common mistakes we’ve seen is a seller deciding to source a product based on statistics obtained during a peak season. Without appreciating the ebb and flow of demand, sellers commonly over order inventory, or financially plan for a high sales volume, only to get stuck holding a large quantity of product.
Step #7: Identify Main Keywords:
It’s unlikely that a single search term is driving all of the sales for products in a micro-niche (or any niche for that matter). Typically there are at least 4 or 5 decent keywords that may be viable selling opportunities for a given product.
To start, check out keywords that other products are using in their title. If you’re looking at ‘white paper bags’ for instance, you might also want to check out keywords like ‘paper bags’, ‘white craft bags’, ‘large white paper bags’, and ‘white gift bags’. A sure-fire way to make sure you’re not missing any of your main keywords is to use a tool like Keyword Research, which programmatically identifies all main, related keywords for you.
When using Keyword Research, particularly for micro-niches, I like to first sort by priority score, which will show me the most closely related keywords while factoring in search volume:
Next, I’ll sort by exact search volume, to view the most heavily trafficked keywords in my market:
One of the most helpful, and perhaps underutilized features of Keyword Research is the ability to add keywords to a bank to create your listing’s copy. This will help you to insure that you’re indexing for as many search terms as possible and casting the widest net to capture your customers. Listing Builder, a feature within Keyword Research, can help you construct your listing and maximize the potential audience for your market.
Proper keyword research can sometimes clue you into an even more advantageous market, but more importantly, you should analyze other main keywords in your market to better understand your micro-niche as a whole. While tedious, it’s valuable to repeat the previous validation steps on several main keywords to fully comprehend your product market and competition.
Without reviewing your broader market, it’s possible to miss crucial data that may help you avoid mistakes. One of the more frequent mistakes we encounter is assuming that a specific keyword is the main sales driver for your product market. If you don’t fully understand your market, you could see a keyword that looks non-competitive with a high return, only to realize that sales are being driven through a much more competitive term.
Let’s apply this to my product ideas:
Thinking critically about my pinned ‘paper’ ideas, I’m going to whittle down a few options.
While I was really intrigued by the low reviews and high sales for ‘crinkle cut paper shred’, with an average selling price of $11 per unit, I think I might avoid this market. I know that in order to be competitive, I’m going to want to be able to price on the lower end, meaning that I’d probably be looking at a selling price of around $8-10. Even if I can source affordably, shipping, fees, and storage are likely going to eat up a lot of my potential profit margin.
Next, I’m going to weed out the ‘parchment paper sheets’. The overall numbers aren’t bad but looking at Market Intelligence, I’m noticing some larger names like Reynolds. While Reynolds is providing some steep competition, I’m honestly surprised by how evenly the sales are spread.
That said, I’m also starting to think about manufacturing. Parchment paper typically involves more robust (and likely more expensive) packaging. Typically, it would be packaged as a roll, in a box, with a metal cutting edge. This will also add weight which will increase the cost of logistics. Since average selling price isn’t too high here either, every penny counts.
Finally, and while it may still be a decent idea, I’m going to filter out ‘white paper bags’ as well. This is mainly because I’m not overly confident in how many sales this specific keyword generates. There is a lot of variety on size, intended use, and even features (handles, gloss coating, etc.). This means that it will be hard to determine whether the keyword ‘white paper bags’ is a primary keyword for my market and it will be hard to determine which product features will make me more competitive. In comparison to many products, this is a relatively minor point, and while you should definitely perform quality control inspections when sourcing a product, I’m also a little concerned about glue quality and weight capacity. Compared to wrapping paper or paper plates, I’m seeing slightly more potential for returns and negative reviews which could limit my potential for success.
For the sake of keeping this brief (as brief as possible), I’m going to focus on the white wrapping paper.
Looking at Market Intelligence, price points are relatively high, sales are pretty well dispersed, and the product is relatively simple.
While there is a bit of seasonality to the market, there’s still an overall average of around 500+ sales per month and sales don’t totally drop off outside of peak season. The best selling month isn’t until November, but this will give me a bit of time to source and list my product and work on accumulating reviews.
There are also no warnings or alerts for the market, which is another positive sign.
In comparison, with the ‘gold paper plates,’ one of my major concerns is the diversity of product offerings. On page one, I saw everything from gold plastic utensils to gold and pink plates, different shapes, sizes, and patterns. This will make it harder to isolate the features that buyers prefer and would likely result in lower conversion rates.
Fortunately for my bottom line, it appears that plain white paper rolls sell best. Provided I can offer a comparable size and length as the top competition, while pricing my product at around $15 per unit, this should be a pretty viable option.
White wrapping paper receives around 7,000 searches per month, meaning that it has an audience searching for this product. For products on page one, there is an average sales quantity of 810.46 units/month with an average revenue of $17,665.04 meaning that it definitely has the potential to hit my revenue goals.
The average review count for page one listings is 55.15, however there are several products with fewer reviews that still sell well (implying that, while I will ideally want to generate as many reviews as possible, it’s not necessarily crucial to have as many reviews as my lead competition to be successful). As long as I’m able to generate 10-20 reviews with a rating of around 4.5 stars, it should give me a healthy foundation for driving sales.
It’s important to note that I am running this analysis shortly after Christmas so numbers are likely to be inflated. That said, based on the annual sales trends, I can still expect a decent potential year-round. This means that I should be looking to ramp up my inventory and marketing in time for Q4, but I should still have decent selling opportunity when my inventory hits Amazon. This ebb and flow of the market may actually be ideal for me, as I can source the product now and begin generating sales and reviews with the goal of positioning my listing to capitalize on Q4.
At this stage, white wrapping paper appears to be a solid product idea, and I was able to find this micro-niche within about 10 minutes of research on Product Discovery.
Phase 4: Source Your Product
Once you’ve identified a product (or products) that you’re interested in selling, it’s time to find a manufacturer.
You can go to trade shows, take a trip to China, or contact a sourcing agent, but the quickest and most cost-effective way (and where most sellers end up finding a supplier) is typically using Alibaba. Alibaba is essentially the e-commerce platform for e-commerce businesses; the Amazon for Amazon sellers. This database of manufacturers helps align you with suppliers that will able to actually produce your products.
Looking at my micro-niche for white wrapping paper, I was quickly able to find several suppliers with a simple search:
You may have to experiment with keywords and search around a bit, but you can find virtually anything on Alibaba. And, suppliers are typically willing to negotiate and manufacture to your specifications.
From here, I would select a around 5 suppliers who look to be reputable and reach out to them inquiring about samples. I won’t delve too deep into the sourcing process here, but I’ll want to compare pricing, product quality, and adaptability of the supplier as well as timeliness, communication, and the overall pleasantness of the conversation. Keep in mind that if all goes well, I’m looking to build a long-term business relationship with this supplier.
When looking for a product within a micro-niche, it’s important to consider the competition when making a sourcing decision. With my white wrapping paper, I’ll want to see if there are any discernible features that sell better than others. What sizes, thickness, potential patterns, etc. are ideal for capturing my market and gathering high quality reviews? Returning to Market Intelligence, I can review products that sell well in the market and take note of any shared traits.
This will help me to understand whether I need to order a few different sizes, or whether I should source rolls or sheets. I can also see if offering a patterned paper improves my sales potential, or if there is a certain thickness that buyers seem to prefer. Obviously, this has to be reviewed with attention paid to other variables such as price and review count, but understanding what your customers want will help you to source a product that fits your demand.
Using another example, let’s say I settled on white paper bags as my micro-niche. Through this lens, I would want to check to see if bags with handles and/or gloss coats sell better. I’d also want to check what quantities (how many bags in a package), and what dimensions sell best. Using this information, I can source a product that conforms to, and capitalizes on, the majority of the micro-niche demand.
As the Amazon landscape continues to grow and change, it’s important that your strategy does as well. The days of sourcing a gold-mine product that generate hundreds of thousands (if not millions) of dollars is all but gone; but the opportunity to be successful on Amazon remains strong.
Rather than looking for one big, broad product market, fueled by a small handful of high-volume search terms, it’s now more advantageous to look small and think big.
As competition grows, Amazon’s dominance over e-commerce grows as well. While established sellers have the benefit of experience, sales history, massive review quantities, and large investments, the continued growth in sales creates more depth to the market and creates opportunities in more specific micro-niches.
These days, it’s no easy task to quickly drive a product to a monthly revenue of $50,000. Instead, it’s more advantageous to use micro-niches to drive 3-4 more specific products to a monthly revenue of $5,000-$15,000 each, allowing you to strategically grow your business.
The secret to success on Amazon in its current stage is to think smarter, dig deeper into research, source with specificity, and diversify your offering.
If you’re looking to become an Amazon seller, you’ll quickly learn that research plays a huge part in your success. From product viability to profit margins and keyword research, you’ve got a lot to do. One aspect a lot of first time sellers don’t think (or know) to research is Amazon gated categories.
Millions of products spread out over hundreds of categories are available to buy and sell right now on Amazon. From electronics to baby products and supplements to snacks, the possibilities are endless.
But not all categories and products are created equal. Some fall under gated or restricted categories. And before you source your Amazon FBA product, you need to be aware of what these categories are because they require special approval to sell.
If you don’t do your due diligence and source a product in a gated category you could be stuck with a ton of inventory and no way to move it.
To make sure you avoid this mistake, let’s dive into gated categories.
What Are the Amazon Restricted Categories?
The Amazon ecosystem is constantly in flux, but right now there are around 20 Amazon restricted categories and subcategories. The list of categories/subcategories that have some sort of restriction or approval/ungating process includes:
Automotive and Powersports
Clothing, Accessories, Shoes and Luggage
Collectibles (Books and Coins)
Grocery and Gourmet Foods
Toys and Games (during the holidays)
Video Media (DVDs, Blu-ray)
Have you committed those to memory? There will be quiz later. Just kidding, but it would be a good idea to keep this list in mind when you’re perusing potential product ideas.
The next question we should probably answer is:
Why Does Amazon Put Restrictions on Certain Categories?
It’s pretty simple really. Amazon’s main goals, as is the case with any business (or it should be at least), is customer satisfaction and brand perception. Now with almost half of all sales on Amazon coming from third party sellers, the company has to have a way to protect its reputation. That’s why Amazon adds restrictions to categories which are susceptible to issues with safety, quality or counterfeiting.
While these restrictions are great for Amazon and in turn the shopper, it can make life difficult for sellers. That’s why you have to make sure you’ve done your research to figure out if that goldmine product you’re about to source would fall in a restricted category.
If it does and you’re fine with a few extra steps, these next parts may be for you.
How Do you Start the Approval Process?
Ok, so let’s say you’ve decided to sell in a category that requires an approval process. How do you get started down the path to getting approved to sell? Fortunately, this part is pretty straightforward. Typically, to get the ball rolling on the approval process you will follow these steps:
Head to Seller Central, then click the inventory link and select “Add a Product.”
Perform a search and look for any product you know that is listed in the specific category.
Once you’re in the search results, click the link that says “Listing Limitations Apply.”
Choose “Request Approval” and begin the application.
While some sellers get approved automatically or within a few hours, don’t worry if it take a little extra time for you. For some, getting approval can take up to a week. To check the status of your application all you have to do is go back to the Add a Product section of Seller Central and look for the “Selling Application Status” on the page.
What Does the Approval Process Entail?
Like a lot of things on Amazon, the answer is – it depends. While the approval and “ungating” process can vary from category to category, there are still a few blanket things you want to do to make sure you stay in Amazon’s good graces and increase the chances of getting approved. Some actions that can influence the approval process include:
Pro Selling Account: For nearly all restricted categories you must have a Professional Selling plan or agree to upgrade to a Professional Selling plan within a certain amount of time, typically 30 days after your application is approved.
Good Standing: In addition to having a Professional Selling account, Amazon also wants to see that your account is in good health. So keep your late shipment rates, defect rates and pre fulfillment cancel rates and returns as low as possible to increase your chances of getting approved. Unless there are quality issues with your other product(s), this aspect mainly applies to FBM, because if you’re selling FBA you should be hitting these metrics easily.
Invoices: In some categories, like Grocery and Gourmet food, Amazon requires that you provide them with acceptable documentation like product invoices and any other information they request about your products.
Images: For the Automotive and Powersports category, Amazon requires sellers to have compliant product images that can either be reviewed on an independent website or image hosting site.
Questionnaire: Some categories, like Sexual Wellness and Jewelry also require you to fill out a questionnaire in addition to providing images.
FDA Review: Some products are subject to FDA approval and may have additional requirements, like listing guidelines that you must adhere to.
Want Some More Information about FDA Regulated Products?
Check out our recent podcast on the topic:
As you move through the approval process Amazon will indicate what of the above aspects it needs from you as the seller. Because this is done online with areas to upload or enter information, having all pertinent documents and info ready to go will help speed up this process.
Keep in mind, all categories will be different when it comes to what it takes to get approval to sell. For instance, sellers wanting to break into the Grocery and Gourmet Foods category have to follow specific guidelines.
Here are some of the guidelines straight from Amazon for the Grocery and Gourmet Foods category. As you can see from the image below, there are requirements for a number of aspects including packaging, labelling, shipment dates and much more.
Then, as you might imagine for food products, Amazon also requires sellers to maintain proper temperature control, as you can see below.
Final Thoughts: Should I Avoid Selling in Restricted Categories?
Hopefully after reading this blog post, you have a little better idea of why restricted categories exist and what the process for getting “ungated” entails. Now, if you think the process for getting approval to sell in one of the gated categories is too complex and time-consuming, (especially if you’re a new seller) that’s perfectly fine. However, if you’re willing to go the extra mile, this could be a good strategy for you.
Think about it this way: There is a ton of competition across all categories on Amazon, right? But wouldn’t it make some sense to think that categories that require these extra steps and work, might be a little less crowded for the reasons I mentioned above?
What I’m saying isn’t necessarily profound, nor is it sure to make you instantly rich. That said, you don’t have to avoid restricted categories like the plague just because you can’t open an account and immediately start selling.
These are the types of decisions that you’ll have to make throughout your selling journey. To set yourself up for success, you’ll need to make sure you’ve done plenty of research and have gathered the right data.
Here at Viral Launch, we want to provide you with all the information you’ll need to become a successful Amazon seller. For more on Amazon selling strategies, we encourage you to subscribe to our blog, check out our Youtube channel, and listen to our Follow the Data podcast.
The U.S. Food and Drug Administration (FDA) oversees the regulation of products, medicines, and foods that affect public health – and that includes products sold on Amazon. Even though a product may check all of the boxes – low competition, affordable manufacturing costs, high demand – the risks of running afoul of a federal agency may cancel out the rewards of selling FDA regulated products on Amazon.
As a general rule, anything that has not been cleared for over-the-counter use by the FDA or is considered dangerous by the FDA is barred from being sold on Amazon. But what about products that might or might not have FDA restrictions? Are derma rollers medical devices? Is hand soap a cosmetic? How can you be sure that your product fulfills both the legal requirements of the FDA and the selling policies of Amazon?
For private label sellers, understanding this information and integrating it into product research is crucial for avoiding disastrous financial consequences. Listen to our recent podcast for more details on selling in restricted and niche markets.
Am I Selling FDA Regulated Products?
Generally speaking, the FDA is in charge of regulating foods, drugs and biologics, medical devices, electronic products that give off radiation, cosmetics, animal drugs, and tobacco products. Some of these products need FDA approval before being sold, and others do not. All of these FDA regulated products fall into Amazon restricted categories.
Categories that require the most regulation from the FDA – tobacco products, drugs, biologics, animal drugs and foods – are outright prohibited or require special permission to sell on Amazon. We will focus on products that do not need FDA approval and may be easier for private label sellers to market successfully.
Keep in mind that these products are restricted by Amazon and may have additional requirements other than those stated in this blog. Amazon takes restricted categories very seriously. If you list a restricted product without the proper FDA approval or complying to listing guidelines for that category, you could permanently lose your Amazon selling privileges.
All Amazon products, even those that do not require FDA approval before being sold, must follow certain labelling guidelines:
Labels must not state that the products cure, mitigate, treat, or prevent a disease (this includes conditions like dandruff and acne) in humans unless that statement is approved by the FDA
Labels must not state that the product is “FDA Approved” if it is not FDA approved
Labels must not use the FDA logo
The FDA logo is for federal government use only. Displaying the logo on a product, a product’s label, or a listing detail page may violate federal law and will likely lead to the removal of the listing from Amazon as well as to possible legal consequences.
Third party sellers must ensure that their manufacturer understands these Amazon labelling guidelines, especially since they often do not get a chance to see the finished product until it has already been manufactured. And though it may be tempting to use “FDA Approved” to advertise the safety and effectiveness of your product, misleading buyers can lead to negative reviews and returned orders, which in turn can cause your seller account to be suspended. It is always better to be open and honest about a product’s functionality and to rely on keyword optimization and advertising strategies, rather than false claims, to gather reviews and boost sales.
All sellers are permitted to list medical devices that are authorized by the FDA for over-the-counter purchase that are not otherwise restricted and are appropriately described and labeled. All products that have not been cleared for over-the-counter use, are considered dangerous, or have been recalled by the FDA are barred from being sold on Amazon.
Medical devices that do not need approval and can be marketed by all sellers include:
Ionized or ionic bracelets
Personal Sound Amplification Products (PSAPs)
For sellers in the Professional Health Care Program, the list of permitted products is more extensive and includes Class I, II, and Class III medical devices that have been cleared by the FDA, like tongue depressors, powered wheelchairs, and some pregnancy tests.
Some products ride a fine line between being considered a medical device or not. Derma rollers, for example, are commonly used to treat acne scars. But the FDA considers any device that treats a disease or condition, like acne, to be a medical device. In addition, features like the length of the needles and method of use could cause a derma roller to be classified as a medical device. To avoid breaking FDA regulations, both the seller and the manufacturer must be careful of how they make and describe the product.
Dietary supplements do not require FDA approval before going on the market. The only exceptions are supplements that contain a new dietary ingredient, in which case the manufacturers are required to notify the FDA at least 75 days before selling.
Amazon requires that supplements be correctly described and labelled. Most importantly, supplements cannot make structure-function claims on their labeling or listing, unless the claim has been approved by the FDA. Structure-function phrases make claims that the product can affect the structure or function of the body. This includes phrases like “reduces pain” “anti-bacterial” and “fights Parkinson’s Disease.”
If the label includes structure-function claims, the manufacturer must submit a notification to the FDA and include a disclaimer on the label that states the product has not been reviewed by the FDA and is not intended to diagnose, cure, treat or prevent any disease. Any content on the listing that includes these claims must also have the disclaimer.
The FDA does not approve perfumes, makeup, moisturizers, shampoos, hair dyes, hair relaxers, face and body cleansers, shaving preparations, or ingredients within those cosmetics. The only ingredient that has FDA oversight is color additives (an extensive list of additives can be found here). The FDA also monitors reports of adverse reactions to these products.
Some cosmetics may count as drugs, and would therefore require FDA approval. Products that intend to make people more attractive are generally classified as cosmetics, but if a product intends to affect the structure or function of the skin or body, it is classified as a drug or even a medical device. Soap has its own set of definitions and may be monitored by a separate regulatory committee.
For example, Face Cream A claims to make people more attractive by making wrinkles less noticeable: it would be classified as a cosmetic. Face Cream B claims to remove wrinkles or increase collagen: it would be classified as a drug or a medical device. Even if Face Cream B could not actually remove wrinkles or increase collagen, the claim alone is enough to cause the product to be reclassified and fall under FDA scrutiny (this is why avoiding structure-function claims in your product listing is so important!)
Amazon prohibits the sale of cosmetics that have been determined to present “an unreasonable risk of injury or illness” to users. If you are unsure as to whether your product falls under this category, a complete list of prohibited items can be found in Seller Central.
Medical foods are used to manage a disease or health condition that requires special nutritional needs. This includes gluten-free foods, but does not include meal replacements, diet shakes, or products for the management of diabetes which can be managed by modifying a normal diet. Medical foods are intended to be used under the supervision of a technician. If your food product is gluten-free but is not intended for the management of Celiac disease, it cannot be marketed as such and does not fall under this category.
The FDA does not have to approve medical foods before they are marketed, but medical food manufacturers must comply with other requirements including good manufacturing practices (GMP). Medical foods do not have to include nutrition information on their labels, but the same substance-function claim restrictions apply.
Final Thoughts on Selling FDA Regulated Products
Because private label sellers do not manufacture their products themselves, it is more likely that they will be penalized for not complying with Amazon restricted category listing guidelines rather than for going against FDA violations. But the FDA can take regulatory action if safety issues arise with a product after it has been sold, which could be disastrous for a seller’s reputation. These requirements are as much for the seller’s safety as for buyers.
All of these regulations prove just how important product research is to becoming a successful seller on Amazon. Of course, the easiest way to stay out of trouble would be to choose an unrestricted product that does not need FDA approval in the first place. Luckily there are millions of profitable products just waiting to be discovered.
If you decide to move forward with selling FDA regulated products, do not hesitate to reach out to us for market research tools, listing optimization services, and more. At Viral Launch, we want to provide you with all the information you need to become successful on Amazon. For more on Amazon selling strategies, we encourage you to subscribe to our blog, check out our Youtube channel, and listen to our Follow the Data podcast.
The Amazon Space is FULL of information. The entire Seller Ecosystem is extremely unique, full of perspective, experience, data, competition, and everything in-between. Our goal is to simply put out TRUTH – facts, advice, and information backed by data. When we see Sellers walking down a path that leads to failure, we try to step in, and point people back on the right track. And that’s what we’re doing today. We’re breaking down what two HUGE mistakes Sellers are making when it comes to Product Research, and how to research markets correctly.
Today, we’re breaking down two huge Amazon product research mistakes.
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Performing market research is the first and arguably most important step in selling a product online. This is true across all eCommerce platforms, whether it’s Amazon, Etsy or eBay. But what does market research really mean? And why should you be doing it in the first place?
What is Market Research and How Will it Help Me?
Let’s start with the definition of market research. Market research is the process of compiling, analyzing and interpreting information about a specific market, including its products and the people buying and selling them. Basically, you have to do your homework! Sourcing and selling a product that no one wants to buy isn’t going to make you a dime, and that’s what you’re in this for, right?
Poor or incomplete market research can cost you significant time and money, not to mention result in failed opportunities and even unfortunate PR nightmares. Small startups and big national brands are both susceptible to this.
We know it’s super tempting to get swept up in the selling game. Some people simply get lucky in picking the right products. But to really succeed and not just be a flash in the pan —or yet another marketing fail— you need to invest in market research before you start selling. Here are 5 reasons why market research pays off and how it helps set you up for success.
Reason Number 1: Check Out the Competition
Market research allows you to size up the competition and see how you might stack up. Many US marketplaces are highly competitive, so looking at what your competition is doing can help you get a leg up and compete against them more effectively.
Examining your competitors allows you to:
Identify successful (and unsuccessful) products and business strategies
See competitor sales to determine your potential sales
Identify price points people are willing to pay
Find a profitable market
You’ll get great insight into what people want, how much they’re buying and at what price. This is all valuable information you want to know ahead of time to determine whether your product is feasible and if the market is right for you.
Reason Number 2: Learn About Your Audience
Once you’ve checked out your competitors, it’s time for more market research on your audience. What types of people are buying your product? Millennials, new parents, tech lovers? Make sure there’s a big enough buying pool to be profitable!
Identifying your customers also reinforces that the market is:
Relevant: Start with a simple Google search and see who’s talking about the product. Does it appear on news and social media sites or in chat rooms? You want it to be a topic of discussion.
Fulfills a Need: The more it fulfills a need, the more demand there will be.
Is in Your Niche: Do you know anything about the product? Do you know what its customers want and need? Today’s shoppers are super savvy and want to work with sellers who know their stuff.
Additionally, pay attention to changing consumer behavior and any product restrictions on your platform. And while taking advantage of product fads can be profitable, know that sales will typically fizzle out pretty quickly. If you’re in this for the long haul, fads aren’t what you want to hang your hat on.
Reason Number 3: Determine Operating Costs
When it comes to your hard-earned money, you don’t want to face any sudden surprises. So, keep on doing your homework! Research suppliers and determine your product costs before you start sourcing. What’s your bottom line? How much do you need to sell to meet your revenue goals?
Unexpected costs are going to pop up, but you can eliminate a lot of the guesswork and surprises simply by crunching the numbers ahead of time.
Reason Number 4: Develop a Better Business Plan
So far, your market research has shown you who you’ll be competing against, who your buyers are and what costs are involved. Now that you’re armed with this information, you can create a much better —and more successful— business plan. Use this information to:
Develop a competitive pricing model
Define your daily operations
Identify customer service needs
Determine marketing strategies
Pinpoint opportunities for company growth
If you jump right in, it’s way too easy to make silly errors and costly mistakes. You’ll also be operating based on preconceived and potentially outdated ideas and assumptions, not concrete facts and up-to-date numbers that you’ve actually seen for yourself. Jumping in too fast without doing market research can cause you to miss out on opportunities to make money and really make something of your business.
Reason Number 5: Long-term Sustainability
The popularity of ecommerce marketplaces has exploded over the past few years. Just take a look at this buyer behavior study! More and more people are buying online, which means you have a much easier entry into the marketplace.
Market research is even more essential if you want long-term success. There are countless success stories of everyday people becoming profitable sellers on Amazon, eBay and other ecommerce sites. How did they make it happen? They identified a need and fulfilled it. From there, they continued to grow and adapt with the market in order to make their presence known.
Primary information is first-hand data compiled from original sources. You can do this yourself or hire someone to do it for you.
Secondary information is info that’s already been gathered by someone else and is publicly available. This includes information published in newspapers, reports and journals or is freely available online.
Gathering primary information gives you direct control over the process. Secondary information is typically more readily available, but this also means other people have easy access to it as well.
How Viral Launch Helps with Market Research
Conducting market research can be time consuming, which is why some people skip it. However, there are many market research tools out there to help you! Take advantage of them to streamline and speed up the process.
If you’re interested in selling on Amazon, Viral Launch Product Discovery software helps you find products to sell using a variety of search parameters that are customized to meet your own unique needs. Find what worksfor you.
And if you already have a product in mind, run it through Viral Launch Market Intelligence product validation and market research software. You can see top sellers for your market, market trends, our expert analysis, cost calculations and more. This primary information is very valuable for making product decisions and just may change your mind!