Finding great products to sell is the key factor in running a successful Amazon FBA business. It'll make or break your business. It'll determine whether you're profitable from day one or have to liquidate your products at a loss.
Having launched multiple multi-million dollar brand over the last several years, I'll share with you what has and hasn't worked for me and what can work for you.
Related Podcast: Episode 129: How to Find the Perfect Product to Sell in Ecommerce
The Easiest Formula to Finding a Successful Product to Sell on Amazon
99% of people reading this article want the easiest and cheapest path to finding a successful product on Amazon. Here's the easiest path to a successful product on Amazon:
- Find a product where the top selling product sells between $5,000 and $25,000 a month (using a tool like Jungle Scout to determine the sales). If it sells any more, the product is too competitive.
- Find a boring category – no baby products, no pet products, no electronics, no supplements (these categories are too competitive).
- Bundle the product with another accessory. For example, if you're importing fishing rods then include fishing line with it for free.
- Find a good supplier on Alibaba (again, use Jungle Scout's Supplier database to find out exact what supplier your competitors are using).
- Import the product using Amazon Global Logistics directly into Amazon warehouses to get the cheapest landed cost.
There you go – that's the easiest way to finding a successful product on Amazon. It won't make you millions unless you rinse and repeat many times for many products but it has the highest probability of making you some money (I'm not saying it's probable you will make money – Amazon sellers have a high rate of failure).
If you want to find out more details on how to find these products, keep reading below.
My Ecommerce Story
I've been selling online since 2008 when eBay and OSCommerce were the backbone of my company. Now of course, over 80% of my sales are Amazon.
In 2016, I sold one of my previous brands, Anchoring.com, in the boating niche for just under $1million. Since 2017 I've chronicled building another brand from $0 to $1million in just over a year.
I'm by no means an expert in ecommerce but I've discovered a formula that works for me to build multiple successful ecommerce brands.
Step1: Find Out How Much Products Make on Amazon
Most of your product research is going to be done on Amazon looking for products that don't have a lot of competition that you can make some small improvements to and profit from.
But how do you find out how much money a product is making on Amazon? More or less, you're going to need some type of software. Jungle Scout and Helium 10 are the most popular (by far). I'm going to include affiliate links for these products but affiliate link or not, Helium 10 and Jungle Scout are the Pepsi and Coke of Amazon software.
Both of these pieces of software are basically Chrome Extensions. With Jungle Scout's Chrome extension I can see that this Scan Disk SD card is selling about $53,000 a month. You can do this with any product on Amazon to find out how much that product is selling.
As mentioned before, you want to find a product that is selling between $5000 and $25,000 a month. Anything more is too competitive. The biggest mistake new Amazon sellers make is trying to target too big of a product to begin. There's lot of opportunity in small product categories but very little in larger product categories.
If you don't want to buy any software, you can get an idea of how competitive a product is by checking out the Best Selling Rank on the product. Typically anything with a Best Seller Rank of 5,000 or below is too competitive (the smaller the number, the more competitive).
Step 2: Find a Product You Can Change and Make A Tiny Bit Better
In today's crowded ecommerce world, you need to stand out from your competition in order to succeed. You need to change those products A BIT. You cannot just find a product to import on Alibaba, slap your logo on it, and expect to retire in a couple of years.
Changing product doesn't have to be hard. Here are some ways to easily change your products:
- Make it in different colors
- Make it in different sizes
- Bundle it with accessories (i.e. pumps, stands, etc.)
- Sell it in a multi-pack item
- Make it out of a different material (i.e. a thicker rubber)
- Dramatically improve the packaging
Bundling is my favorite way to differentiate my products because it's easy and still works incredibly effectively. Bundling is just taking one main product and including a free accessory or two with it. Take a look at the top listings on Amazon for garlic presses.
Here's another example with Yoga balls where sellers are easily differentiating their products in a variety of different ways (bundling, packaging improvements and different colors/sizes)
You can also drastically improve your products (think “building better mousetraps”) but it's a lot harder and beyond the scope of this article.
The Cockroach Method for Product Development
I mentioned that bundling has been done to death in the most competitive product categories, especially on Amazon. So what you need to do if you want to succeed is to be a cockroach and go where no one else wants to go. Two areas where many sellers avoid are oversized items and lower demand items.
Everyone wants to have a protein powder or baby product selling $250,000 of products a year and so there is a TON of competition in these spaces. You'll increase your chances of succeeding if you focus on smaller demand items, items selling $5000 to $20,000 a month.
Also, everyone wants to sell a small and easy to ship product like a garlic press that you can just slap a UPS label on and have shipped directly via air from China to Amazon. No one wants to sell boat anchors. They're big, heavy, and you need to arrange pesky sea shipping. But I also sold a business for nearly $1million selling boat anchors because very few others were doing it.
Check out my full blog post on the Cockroach Method if it sounds interesting to you.
Step 3: Find a Supplier on Alibaba
Once you find a great product idea, it's time to start looking for someone to buy that product from in China. The VAST majority of products on Amazon are being imported from China and the vast majority are being found on Alibaba. If you're not familiar with Alibaba, Alibaba is basically a directory of Chinese factories and suppliers.
I won't give a full overview of how to use Alibaba as we have a great free guide on how to use Alibaba, but basically you want to do the following on Alibaba:
- Search for your product on Alibaba
- Contact 3 to 5 suppliers to get quotes
- Get samples from the most attractive supplier
- Place an order for your products
Expect to need to spend somewhere between $2500 and $5000 on your first order from Alibaba (yes, it's a pretty big cash commitment).
Step 4: Import Your Products Using Amazon Global Logistics
Once you've placed your order with a supplier you found on Alibaba, it's time to get your products shipped to Amazon warehouses.
You basically are going to have a couple of ways you can do this:
- You can ship all of your products directly into Amazon.
- You can ship your products to your home or 3rd party warehouse and “drip” them into Amazon in small batches.
Ideally, you want to ship all of your products into Amazon at once because it's going to be the most cost effective. There's some reasons why you might not be able to do this (such as Amazon inventory limits on how much you can into Amazon at once) but assuming you can the best way to ship your products is going to be with Amazon Global Logistics (or AGL). Again, I won't go into the nuances of shipping with Amazon Global Logistics as we have a great free guide on AGL.
Ways to Make More Money on Amazon
Alright, now you have a roadmap for finding a single profitable product to sell on Amazon. If you do this correctly, you'll make some money but probably not enough money to retire (and probably not even enough to quit your day job, if you have one). So how do you make more money? Here's a few ways.
Aim to Build a Catalog of 5 to 10 Products
Here's a secret to most successful Amazon sellers – they don't get “rich” by selling one product. They sell several different products and often dozens of different products or more. Every 7 figure brand I've run has had a catalog of 10+ products. Repeat after me: to make a full time income from Amazon you will need to have multiple products.
If you know that you need to have a catalog of several products then the easiest way to make your job easier to focus on one niche. Don't aim to develop products across a bunch of different niches. It makes your job WAY harder.
How do you find a great niche? Well ideally, you have a couple of ideas for a great niche to start selling into. Natural starting points are hobbies that you're already interested in.
However, if you're like most people starting to sell online, you probably have no idea where to start.
Here are a couple of good ways to find niches:
- Amazon 5th Level Category Worksheet [Excel]: Download this Excel document of all the different categories on Amazon. Look for categories on the 5th or 6th level (these are neither too wide or narrow)
- Consumer Hobby Magazines [Google Doc]: Our good friend Andrew Youderian compiled a list of all major consumer hobby magazines in North America. These are GREAT ideas for niches.
You want to find a niche with a lot of different potential products in it. So, for example, long-distance running would be an example of a poor niche as the number of potential products is very limited. Hiking, on the other hand, would have a near-endless supply of potential products (sleeping bags, tents, hiking poles, etc).
Here are some real-world examples of niches that are too wide, too narrow, and just right:
|Too Wide||Too Narrow||Just Right|
|Wedding Products||Pink Wedding Handkerchiefs||Special Event Linens|
|Fishing Products||Salmon Flashers||Trolling Motors|
|Medical Products||Hot Water Bottles||Hot and Cold Packs|
|Boating Products||Bruce Anchors||Anchoring and Docking Products|
What are the Top Selling Products on Amazon?
Curious what the top selling products on Amazon are? Of course you are.
Here were the most popular searches on Amazon in the third quarter of 2021 as taken directly from Amazon's own Brand Analytics search tool. You'll notice many of these products reflect seasonal trends, fads, and, of course, COVID.
- Pop it
- Disposable face masks
- Halloween decorations
- iphone 12 pro max case
- iPhone 11 case
- Bluetooth headphones
- Apple watch band
Other Good and Bad Qualities of Products to Sell on Amazon
Here are some other qualities to look for when searching for products to import and sell on Amazon:
- Larger & Heavier Products: Small/light products that can be easily air-shipped have much more competition largely due to the complexity of shipping items via sea.
- Products That Sell for $25+: Higher priced items generally have higher margins which also allows for more money to be spent on paid advertising.
- Products That Are Low Risk: When you import products from China, you are responsible for any damage/harm it causes. Avoid inherently dangerous products (i.e. baby products, hoverboards, etc).
- Products That Are Labor-Intensive: The biggest cost advantages in China come when a product requires a lot of manual labor and little machine labor. Anything that requires a lot of cutting, sewing, screwing, packaging, etc. are going to be comparatively cheap to source from China. Other items that require a lot of machine labor, electronics being the obvious example, normally do not have a significant cost advantage to being made in China.
- Products That Aren't IP-Protected: IP, intellectual property, generally refers to products with trademarks and/or patents. If your product violates someone's IP the product may be suspended from Amazon and/or you may be sued.
How to Keep Your Products Profitable
One of my favorite quotes is that revenues are vanity and profits are sanity.
Comparing revenue numbers in the world of ecommerce is an endemic problem. How many times do you hear someone proudly say they are a 7 figure seller? (I'm guilty of it myself!) The problem is that you can make lots of revenue and have no profit.
Generally, good net margins in an ecommerce business are 20-30% and can often hover closer to 10%, especially for larger businesses with more overhead. Check out our podcast where we broke down the exact numbers in our brands.
There are two ways to maximize your profit: maximize selling price and minimize costs. Differentiating your products is the best way to maximize the selling price. There are several components of minimizing costs but one of the best ways is to minimize your landed product cost. For lowering your landed costs, check out our Importing from China Mega Guide.
This article should give you a good starting point for finding a niche to build your ecommerce company around and then finding products to develop. This entire process can take an enormous amount of time. For my newest brand, I spent months just determining a niche and identifying product opportunities before beginning developing and marketing them. Ultimately, finding quality niches and products lay the foundation for a successful ecommerce business.
Do you have any questions regarding finding a niche or product? If so, feel free to ask any questions in the comments below.