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How to Research A Profitable Product? – [Day 3 of 7] How To Find & Launch A Profitable Product On Amazon

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Day 3: How to Research A Profitable Product?


Reading Time: 10 Minutes
Timeline Goal: By the end of Week 1, the aim is for you to have chosen 10 potential winner products using the strategy outlined below
Notes: All resources and links mentioned will also be made available at the end.

Amazon Product Search

 

There are so many products floating on Amazon today with some products having 1000’s of sellers. So in this sea of competition, how do we figure out a product that we can private label and sell on Amazon? More importantly,  how can we do it profitably, so we don’t go broke? The last thing we want is to do all this research and analysis, commit to a supplier to manufacture your product, expend your capital to get it manufactured and shipped to Amazon only to find one of the following pitfalls:

 

  • There was not enough demand for the product
  • The competition was too much
  • There wasn’t enough wiggle room in your margins so things like shipping fees, FBA fees, and advertising fees were eliminating any profits and you were losing money on each sale
  • The supplier was providing inferior product which hurt your brand and your sales

 

So how do we do avoid these pitfalls and is there a magical “Amazon product finder” tool? Or some method to the madness to find the best amazon products to sell profitably?

 

You’re in luck, none of this is rocket science and we’ll take you through it – there are more amazon entrepreneurs today making 7+ figures yearly than there has ever been. So sit back and read through our process on how to find your next product and ensure its a profitable one before you even start selling on Amazon.

 

Product Research Tool

 

It starts with a good product research tool. We love technology and when there is a tool that does what we want to do, there is no need for us to re-invent the wheel. The tool I have personally used and is hands-down the best for product research is the Product Database feature in Jungle Scout – it is a web app that basically downloads almost all of the product inventory on Amazon with their metrics like best seller rank, weight, price, estimated sales, rating, # of reviews, etc. This is huge as it gives you the power to sort through products very efficiently and quickly filter the promising ones from the duds with a click of a few buttons. It couldn’t be any easier!

 

So first off you’ll need to sign up here for the Jungle Scout Free Trial for their web app. It’s worth every dollar in your future investment to become successful at sourcing profitable products. Don’t want to spend the time downloading the tool and searching yourself? No worries, we have an FBA Product Research service that helps you fast track this process in a few days.

 

Now, once you have access to the tool, let’s go through the filters I typically use to find a profitable product.

 

I log into my Jungle Scout account and go to the “Product Database”. Then choose my Marketplace, category, product tier, seller, and other filters as illustrated in the image below:

 

When you choose your marketplace – for me it’s the US, if you reside in the UK or Europe – start with the UK, respectively for the other areas. It is recommended you sell your product in the country/marketplace you reside in. Obvious reasons would be that you understand your consumer market and its laws to some extent. Selling in different countries makes sense when you’ve already dominated in your marketplace and now need to scale globally.

 

 

Profitable Amazon Categories

 

2nd most important filter are categories – Amazon has a lot of main categories to choose your niche in but not all are considered equal or worth your time

 

Here is the list of our 11 best categories that have had profitable products with little barrier to entry based on public research:
– Arts, Crafts & Sewing
– Baby
– Health & Household
– Health & Personal Care
– Home & Kitchen
– Home Improvement
– Industrial & Scientific
– Patio, Lawn & Garden
– Pet Supplies
– Tools & Home Improvement
– Sports & Outdoors

 

Why did I suggest the above categories? A few reasons… they are easy to source for and not complicated. Additionally, none of them are considered a “gated” category as they have stringent approval processes. No Electronics (dead wires, explosions, etc.). Also, try to stay away from any products that you could consume or topically put on your body as they have higher regulations and need to be FDA compliant. Stay away from products that have a big brand presence or brand loyalty as they are not best suited for private labeling. You want more niche type or obscure products that are easy to private label and the consumer doesn’t rely on brand familiarity.

 

For this example walk-through, I’m just going to choose the “Home & Kitchen” category and see if we can search for a profitable product within that space.

 

Jungle Scout Product Filter Criteria

 

Below are some other filters I typically apply:
  • Product Tier: Standard ( we want to avoid oversize products if possible as bulkiness comes with its own complications)
  • Seller: FBA (since we are looking to become an FBA seller, we want to know what other FBA sellers are selling profitably)
  • Price: 15.65 to 34.83 ( you want some odd numbers that are not just rounded up or down to get more obscure results)
  • Revenue: 12,201 to 38,209 (again odd not rounded numbers to get more edge cases)
  • Reviews: I like to set it to up to 25 (if you get too small a result set in the niche, you can go up to 250 reviews without the product getting too competitive)
  • Weight: I prefer to stay under 2 lbs so that we don’t pay more on shipping
  • BSR: I like to look for products exhibiting high revenue with a BSR between 4,999 and 15,001
I typically don’t add anything in the keywords fields since we’re “browsing” in the product searching phase and don’t know what we want yet.

 

You should get back all the products on Amazon that fall within the criteria you chose:

 

Awesome, we found just 164 results…not a huge haystack in which for us to find our “needle”! ?

 

So we’d go through this list – you can either browse through them on the page or just download them all into a CSV file if you’re big on excel. Either ways, you want to look out for products that exhibit the following:
  • Unique and exciting
  • Don’t have too many reviews
  • Good revenue
  • Good “net” (This is the amount you stand to make off each sale after Amazon’s FBA fees. This is not your profit but your net – your actual profit will be the Net subtracted from your cost to manufacture and ship 1 unit to the warehouse. A good rule of thumb is to have your Net be equal to or more than 3 times your cost to manufacture – we’ll get into that more in the next lesson on sourcing)
  • Not “breakable” (I typically stay away from product that uses glass. For example, glass bottles, cups, show pieces, etc., as you can bet that some of your product would break on reaching the customer no matter how good the manufacturer or the warehouse fulfillment crew. In the end, people are people and it doesn’t take much for a delivery guy to knock your box a little and break glass.)

 

Great! Now that you know the parameters – follow me as I’ve just applied the above and found this unique product idea that we can dive into further so you see what we do “under the hood”:

 

Egg Bites Molds?? Whoa! Never heard of it but I want one now to go with my Instant Pot. Sign me up!
Ok, got too excited…let’s evaluate this further to make sure it is actually something people WANT and will be profitable.

 

Evaluate Further

 

There’s a few different ways to do this. Our best strategy is to use a combination of the following:

 

First thing I do is take that product name and get its most relevant keywords. In this case it would look something like “Egg Bites Mold” – I then go to amazon.com (or your own marketplace version of Amazon), type that phrase in the search box and hit search so that it shows me all the main results on the 1st page.

 

 

Using Jungle Scout’s Paid Chrome Extension [Quick Way]

 

Once you’ve installed the Jungle Scout Product (Chrome Extension), let’s run it to do some “fact-checking” of the listings on the 1st page for this product type. What we want to see are how the sellers of this product doing on page 1 and what their individual revenue is, is 1 seller doing the bulk of the sales and the others barely anything, how many reviews does it take to be on page 1 and overall what the competition and demand is like. Below is a screenshot of how to run the Jungle Scout chrome extension.

 

It takes the extension literally 30 seconds to crunch all the numbers and display what we want in a neat way as illustrated below:

 

Did you notice a few things?
  • With just 41 reviews “Jelacy” the brand is selling in the Toys & Games category with literally no competition (as other sellers are selling under the Kitchen & Dining category)
  • That brand had an estimate sales of $14,999 last month with 938 sales and just 41 reviews!
  • There are more than 1 seller under under 60 reviews making decent revenue – this means you are able to share the profits in this niche than have 1 seller dominate.
  • “Opportunity Score” of 7 in Jungle Scout’s proprietary score that they use to determine demand and competition. You typically want your opportunity score to be 7 or above when choosing your product. Unfortunately you can’t get this info using the free sales estimator link.

 

So far so good. This product is definitely a viable option. We’ve concluded it has sold in the last month, has less competition and we don’t need a bunch of reviews to get ranked on page 1 results for the keywords “Egg bites mold”.

 

Can we choose this product? Not yet. We have to confirm 2 more things:
  • What is the trend of this product (we want to avoid seasonal products to keep our revenue predictable all year long)
  • Can we source this product for 3 times lesser than what we could potentially net (i.e. the 3 times rule which I’ll go through in the next lesson on “Sourcing”)

 

Great, If you decided to use the Keepa Chrome Extension, then you can skip to the “Reading Keepa” Section towards the end of this post.

 

Using Jungle Scout’s Free Sales Estimator [Manual Way]

 

Now, if you decided to use the free sales estimator, you’d need to do this manually once for each of the listings in the top page by entering the ASIN’s best seller rank (you can get this from the listing page by scrolling to the bottom to the product information info. Looks something like this:

 

For this example, the specific listing we chose has a 11,313 rank in the Kitchen & Dining category. There are sub-categories, but we don’t care about that. In the free sales estimator – choose the marketplace, the category (Kitchen & Dining), and the sales rank and hit enter to get the estimated sales. You can determine the estimated revenue by multiplying the sales number by its price and calculate the profit by subtracting the amazon fees (you can estimate around $5-$7 for this depending on how conservative you want to be without complicating the process too much). Save your numbers into an excel sheet and rinse-repeat for the next 9 listings on page 1 so that you effectively put together what the chrome extension did for us as illustrated above. Not 30 seconds but hey, still does the trick!

 

Reading Keepa

 

Things to do after you get a general idea of sales estimates and want to investigate the products/niche further:
A) Get the Keepa Chrome Extension so you can actually track the price & rank history of this product and see how it’s changed over the last 3 months, 1 year, and lifetime.Once you have, let’s proceed. The motive here with Keepa is that we want to check how this product has been doing not just in the last month, but also over the last 3 months and preferably last 6 months so that we can get an “average best seller rank” and average out the revenue. Why do we do this? We’re trying to make sure this product is selling not because of a trend or season but is “evergreen”. Also, I recommend checking Google Trends for the keywords “egg bites molds” to check for low activity followed by spikes which would suggest seasonality. You want an evenly spread search volume.

 

That said, let’s go back to the product listing and you should be able to see its statistics load from Keepa right before the “frequently bought together” section:
You want to watch out for how the best seller rank has been doing over time in the most simplest way of describing it. There are legends on the right that tell you how to decipher the graph.

 

That’s it!

 

Want to be an Expert at Using Keepa Charts in your Amazon Business?

If you want an in-depth understanding of how to read a Keepa chart so you limit your downside risk and plan for pricing changes, then I highly recommend the “How to Keepa Camel” video course!

 

See you in tomorrow’s lesson on finding overseas suppliers for your private label product!

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P.S: Want to be guided step-by-step by Bashar Katou, an expert Amazon FBA mentor that’s in the trenches every day selling over $50,000 per month with private label? Join Bashar as an FosterLabs member, where he’ll show you how to get your profitable product launched quickly on Amazon and guide you every step of the way.
Sign-up for FosterLabs Mentorship risk free for 30 days for just $45 today!

P.P.S: If you don’t want to spend 7 days figuring out your Amazon FBA business, then we recommend Bashar Katou’s step-by-step Amazon FBA course that also comes with 2 FREE months of bronze membership to FosterLabs where you get unlimited mentorship & support! Psst. we’ve even got a $50 off coupon just for you! Use:  FOSTERFBA50

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