Is It Too Late to Start Selling on Amazon?

Without a doubt, Amazon is now the go-to ecommerce platform. With over 40% of ecommerce market share in 2017, Amazon emerged as the clear (and growing) choice for online shoppers.  Because of its popularity among online shoppers, Amazon is a great place for merchants to sell their products. As Amazon’s popularity has grown, more and more sellers have jumped onboard to take advantage of this incredible selling opportunity.  But is it too late to start selling on Amazon? 

In their 2017 letter to shareholders, Amazon shared, “For the first time in our history, more than half of the units sold on Amazon worldwide were from our third-party sellers, including small and medium-sized businesses (SMBs) … Over 300,000 U.S.-based SMBs started selling on Amazon in 2017.”

With so many new sellers listings products, is it too late to take advantage of this income opportunity? Yes, certain markets are becoming overcrowded. And yes, shopper expectations continue to climb.  It might seem like it’s too late to start selling on Amazon, but there is still plenty of opportunity.  

How to Find Non-Competitive Products to Sell

In the early days of Amazon, finding a product to sell was easy. You might have taken a sip from your water bottle after a workout, and thought: “I wonder if water bottles are a good product to sell on Amazon?” Upon investigating, you would have found a handful of sub-par listings on Amazon with very little product information.  These would be accompanied by one blurry image taken with an iPhone and only a handful of reviews.

Well, it’s 2018 now, and gone are the days of just happening upon a profitable product market after your morning workout. But that doesn’t mean these markets are gone or you’re too late to start selling on Amazon. They’re just harder to find. In order to discover the markets with good sales and low reviews, you either have to spend a lot of time sifting through products on Amazon or use a product finder.  

Product finders, like Product Discovery, make it easy to uncover the best product markets. You can filter the Amazon catalogue to show you only the products, markets, categories, or brands with a certain number of sales or a certain number of reviews. Filters like Average Revenue, Average Price, and Average Monthly Sales allow you to find products that meet your ROI goals.

Not sure where to start? Use one of the Product Discovery presets like Low Barrier to Entry, Quick Wins, or High Margin Markets. These pre-made searches will show you products with low competition and high profit without having to input much information.

Many new sellers may start out by looking for products that sell for $15 – $30 in markets that have about 1,000 average monthly sales per product and less than 100-300 reviews on average per product. But the best product for you depends a lot on how much you have to invest and your profit goals. Click here to learn more about how to use Product Discovery to quickly find your next great product idea.  

How to Fight the Growing Competition

The best way to combat growing competition on Amazon is to out-market your competitors from the start. From the moment your product arrives in Amazon’s warehouses, you need a strong Amazon SEO (search engine optimization) listing that compels shoppers to purchase. You need product photos that clearly display your product and increase their desirability. And finally, you need a strong promotion strategy to gain initial ranking.

If you can market your product effectively, you can earn keyword ranking in search and build up a strong sales history that will be difficult for new sellers to compete with. With good ranking, you will sell more products. And the more products you sell, the more reviews you will likely get. Reviews are a huge advantage for your product over new sellers coming into your market further down the road.

Especially if you’re just starting out, spending money on marketing your product may seem frivolous. But, promoting your product is just as important to your success as finding the right product or shipping it to Amazon’s warehouses.

If your product doesn’t have good Amazon SEO, no one is going to find it and you won’t see sales. Which is pretty much the same thing as not shipping it. And if your product photo looks bad on a search result page, you’ll see fewer clicks and less traffic. Your marketing budget is not frivolous. It is vital.

Recap

The window of opportunity is still open! It’s not too late to start selling on Amazon, though success today does look different than before. You need to carefully and strategically identify product markets that still have low competition. And then you need to execute on a solid marketing strategy in order to curb future competition. That marketing strategy includes an Amazon SEO listing, stunning product photography, and product promotions that can push your listing to page 1 of search results.

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How You Can Find Products to Sell on Amazon

Amazon’s FBA program provides an incredible opportunity for driven individuals to make money online with a small upfront investment. Amazon is a well-established platform where hundreds of thousands of shoppers go every day to purchase products.

If someone buys your product, Amazon will pack and ship the item with their guaranteed 2-day delivery. All you have to do is find a product to source, list it on Amazon, and convince shoppers to purchase.

Sounds easy enough. But not all products are created equal. The price point might be too low or competition too high.  These factors can leave you stuck paying Amazon’s storage fees for inventory that won’t sell.  If you want to reap all the rewards of the Amazon FBA program, you must pick a product with potential. Here’s how to find products to sell on Amazon.

1. Generate Ideas for Products to Sell on Amazon

Before you can dive in and start evaluating potential profit for a market, you need a handful of product ideas. Think of small items that are within Amazon’s standard size requirements—18” x 14” x 8”—and are mechanically and electronically simple.

PRODUCT MARKET: A product market refers to the products that appear on a search result page for a keyword.

Most people want to start with something that is easy to manufacture and lightweight to ship. You also want to find an item that sells at a good price point between $15 and $30. Don’t feel boxed in by these criteria, but this is a great first step to find products to sell on Amazon.

You can walk around your house or the store to look at the items and start writing a list. You can also browse on Amazon to try to find ideas to add to your list. Or to quickly find a list of profitable ideas, you can use a product finder tool, like the Viral Launch Product Discovery tool.

Product finders are really helpful because they allow you to filter for the kind of product you want to sell.  For example, you can filter a product in a certain category or one that sells about 1,000 units a month.   It allows you to specify several filters within the tool and see catered results that are much more likely to be favorable markets.

You can get a pretty good list going by just looking around your house. But when you do your market research, you might find that all of the ideas on your list have too low of a price point. And then you’re back to square one. With a product finder, the product ideas that you’re starting with are much more likely to end up being ideal markets. For more information on how to use Product Discovery to find product ideas, check out our Product Discovery strategy guide videos.

2. Do Market Research

Once you have a list of product ideas, it’s time to do market research to make sure the market is favorable. You can try to do this manually, but with affordable tools like our market research software, Market Intelligence, there’s really no reason for the extra work.

A market research tool will quickly gather all the data for an Amazon product market for you. You can see estimated monthly sales, price point, number of reviews, etc. And with Market Intelligence, you can see sales, price, and review trends as well. Trends are helpful because they can show you whether a market is on the up and up or if it’s declining.

Market research helps you ensure success for your products to sell on Amazon. You want to know that you will achieve sales and make your money back multiple times over. As you look at the markets for the products on your idea list, here are a few things you’ll want to look for:

    • Monthly Sales: Typically, well-priced products with about 1,000 monthly sales per product provide great revenue for someone just getting started. However, if you are looking at a product with a higher price point, lower monthly sales may be just as lucrative.
    • Price: Products that sell for about $15 – $30 are the sweet spot for new private label sellers. They offer a healthy margin as long as the product is mechanically and electronically simple and easy to manufacture. This is just a guideline, and products to sell on Amazon outside of this range can be profitable with the right margins and sales numbers.  
    • Sales Distribution: By looking at estimated monthly sales for page one products in the market, you can see sales distribution. Sales distribution is how often shoppers purchase products on the lower half of the first page of results for the product’s main keywords. Design-oriented products typically have better sales distribution because shoppers browse for the product that is the color, pattern, or design they prefer. Distribution matters because the more shoppers browse, the easier and cheaper it is for you to win a sale without having to fight for that very top slot.
    • Number of Reviews: The fewer reviews top sellers have, the easier it is to launch a new product in that market. Shoppers look to reviews for social proof of a product’s desirability and quality. If you can get a competitive number of reviews in your market, your product can quickly sell competitively.
    • Product Ratings: If the average rating for top products in a market is low, there is likely room for product improvement. Read customer reviews and find out what the common complaints are. Then ask your manufacturer to make changes to your product to address these pain points. And, continue to make product quality your number one priority with regular inspections. If your product is the only 5-star product in the market, you’re going to win the majority of the sales.
    • Sales Trends: Using Market Intelligence, you can see sales, price, and review trends. Trends help you understand the trajectory of a market. For example, if you look at the sales estimates for beach towels in the coming months, they will be much higher than if you had looked in January. Make sure you know what to expect from the market you’re getting into. Most new sellers want a product that sells consistently all year around. You’ll want to beware of fad products that are seeing  recent spikes in sales and drop in price. You don’t want to have to sell your product at or below cost just to get rid of it.
    • Other Obstacles: Don’t forget to consider your competition. Take note of whether or not Amazon is an active seller in the market. Make sure that the main keyword for your market is not trademarked. For example, Band Aids is a trademarked term, and the top seller in the market is a recognizable brand. Do your due diligence to ensure you understand the market that you’re getting into as you’re finding products to sell on Amazon.

 

3. Calculate Upfront Cost and Profitability

Once you’ve narrowed down your product ideas, calculate your upfront cost and potential profitability. To help with this step you can use the free Viral Launch FBA Calculator. Just plug in a competitor ASIN and edit the weight, dimensions, and unit cost for your product. You can get this information from prospective suppliers before you purchase.

Remember to err on the side of pessimism with your profit projections. Just because the top product in your market sells 5,000 units a month doesn’t mean you can replicate those numbers. They could be running constant promotions or using black hat tactics to drive sales. Don’t base your projections on a single listing. Look at market averages, and be realistic.

You’re well on your way to FBA success!  Remember to put together a good list of product ideas, do thorough market research, and calculate your costs and profits. 

For more information on finding profitable products to sell on Amazon, download our guide: 3 Steps to Finding Your Next Great Product

 

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