How to Find the Perfect Product to Import and Sell On AmazonSeptember 1, 2019 in Blog, Buying Products, Chinese Importing, Portal: Amazon, Portal: Products, Product Sourcing
Updated in September 2019 with up-to-date information for finding products in 2019.
Looking to start selling on Amazon? If so, then you first need to find a product to sell.
Finding great products to import and sell is the key factor in running a success FBA business. In this article, I’ll discuss strategies for finding great niches and even better products.
Related Podcast: Episode 129: How to Find the Perfect Product to Sell in Ecommerce
My Ecommerce Story
I’ve been selling online since 2008 when eBay and OSCommerce were the backbone of my company.
In 2016, I sold one of my previous brands 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, relatively successful, ecommerce brands.
How to Find Niches (and then products)
This part is going to bore you as you probably just want the secret formula for finding profitable products that are going to make you billions of dollars. I’ll give you that part in a minute, but you’ll be doing yourself a disservice if you don’t first read this very important section about the importance of finding a niche.
Why Are Niches Important?
The biggest mistake people make when trying to find products to import from China and sell on Amazon is that they start importing a catalog of unrelated and disparate products.
In order to succeed, you need to have a catalog of closely related products in a niche. Over several years, we have built out several different brands in very tight niches including:
- 4×4 products
- Adult coloring books
- Physical therapy products
- Boating products
- And more
We sell lots of products in hyper-focused niches.
When selling online, you are unlikely to have one product making you hundreds of thousands of dollars in profit a year. Instead, you will likely have many products making you thousands or tens-of-thousands of dollars in profit (see the example below from my boating brand). In other words, to be successful you need to have lots of products and it’s MUCH easier to have lots of products in one niche.
Here are some other reasons why you need to pick a niche first and products second:
- You need to sell multiple products to make a reasonable full-time salary
- It’s easier to become an expert in one niche than many
- It’s easier to identify product opportunities
- It’s easier to identify your customer
- It’s easier to upsell
- It’s easier to find manufacturers
Pick a niche and then find products within that niche. It’s much easier this way.
How to Find Niches
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 niches that are neither too wide nor too narrow. My rule of thumb is that I want to find a niche that can support at least fifty or more 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|
How to Find Products to Sell Online
Finding profitable products to sell online has drastically changed over the years.
When I first started selling online, I could find nearly any product on Alibaba, do nothing to change it, slap it on eBay, and start selling units. Today this doesn’t work. Today, you need to think about creating better products.
The good news is that over the last ten years or so, ecommerce has roughly tripled in size, logistics are infinitely easier, and there are far more resources to help sellers.
Here’s my super-secret formula for finding products:
- Find a product with low to medium search volume
- Make one or two perceivable differences to the product
I’ve used this formula for multiple million-dollar brands. There might be better ways, but this way has worked for me.
Identify Products with Low to Medium Search Volume
Most people start by trying to find a unicorn product that sells millions of dollars a month and that has very low competition. These don’t exist.
However, there are LOTS of potential products that you can sell $5,000-$20,000 of each month with very little competition.
For me, I consider anything around $5,000-$9,999 in monthly sales a good product. Anything above this I consider a home run product. A good rule of thumb is to assume you have to mark up your costs by 300% (i.e. you buy something for $10 and sell it for $30). However, after all your costs are taken into account you will probably have a profit margin of around 20-30%
Take for example this horse grooming product below which is priced at $39.95. Assuming the product cost is $13.33 and a total inbound shipping cost of $2, AMZ Scout (a good profit estimation tool) predicts the total profit to be $12.38 per unit or 30.98% after all Amazon fees are taken into account
To find these products, generally, I am looking at search volume first NOT existing product sales. A lot of people will use a tool like Jungle Scout to find products already selling well. This means lots of competition. It’s better to look at search volume first to identify products with lots of demand but, potentially, not a lot of supply or competitors.
I am looking for keywords with existing search volume of 1,000 to 2,500 searches a month. In my experience, for a product with a $50 price point, this will normally translate to a $5,000-$15,000/month product if I manage to get a top-10 search result on Amazon.
My favorite tool to do keyword research is Helium 10. It has very accurate sales keyword volume estimates and the most robust set of tools. The link above is an affiliate link and there are other tools that do keyword estimates as well.
Let’s imagine I plan to sell horse riding accessories. Using Helium 10’s Magnet keyword tool, I type in one of the top product ideas that first comes to mind: horse saddles.
I can see from my search that horse saddle gets about 5,000 searches a month which is too many based on my criteria. However, under Word Frequency I can start to get some other good ideas for potential products such as horse grooming, horse bag, etc. However, I am going to go and input my search criteria to have a minimum of 1000 searches and a maximum of 2,500.
After I apply my search filter, I now have an excellent list of some great potential products:
Now with this keyword volume, a lot of excellent potential product ideas come up including horse brush, horse grooming kits, and western saddle.
Now with these product ideas, I can focus on the next important step of finding successful products to sell on Amazon: product differentiation.
More Keyword Research with Helium10
Check out the video below to see how we use this tool to find the top keywords from our competitors so we can target them. Use the discount code Helium50 to get 50% off your first month of Helium 10.
Want more Helium 10 training? Subscribe to our free three part video course.
Product Differentiation 101
There’s one reason why most people fail when trying to sell products online: their products have no competitive advantage.
To create a competitive advantage for your products, they need to have either perceived or real differences from the competition. In other words, product differentiation.
There are two ways to make your product better:
- Making actual physical changes to a product
- Giving the impression of perceived physical differences
In low competition niches and products, simply having better marketing for your products (specifically, better photos, videos, product descriptions, and packaging) is often enough to differentiate your products from the competition. You don’t really need to change your products. However, for most products and niches you will need to actually change your product a bit.
Giving the Impression of Perceived Physical Differences – The Case of Coke vs Pepsi
Giving perceived and not real differences is a tried, tested, and true marketing strategy that nearly everyone has fallen for.
One of the most famous examples of the perception of a product not reflecting reality is between Pepsi and Coca Cola. Pepsi, in almost every blind taste test done, is almost always overwhelmingly chosen by consumers as the better tasting drink yet Coke holds a 42% market share compared to 30% for Pepsi. There’s a number of reasons for this but there’s no denying that one of the main reasons is the marketing behind Coke. Coke has made consumers perceive it is the superior product.
Take for example this Kent Mountain Bike. It has two photos, terrible bullet points, and ungroomed reviews.
By selling the exact same bike but improving the photography and description you could give the impression you, in fact, have a different and better bike.
How to Easily Differentiate Your Products
There are some very easy ways to physically differentiate a product with incremental product improvements. These ways include:
- 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
For some products, nearly every one of these incremental improvements has been made. Yoga balls are an example where it is perfectly marketed and has near-perfect incremental product improvements.
However, many product categories are not perfectly optimized. Take, for example, the case of horse grooming kits, one of the potential products our keyword search revealed above. Immediately when searching for horse grooming kits I can see one easy differentiation possibility: simply bundling horse grooming gloves and a brush kit together.
Why could this potentially work? For two reasons:
- The horse grooming gloves are almost certainly a low-cost item where shipping makes up a significant portion of the cost and bundling it with another item would nearly eliminate this shipping cost.
- These gloves are likely to be of demand and use for anyone purchasing a brush grooming kit.
Bundling opportunities like this exist in a lot of low to medium demand product categories.
Other Good and Bad Qualities of Products
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.
Dave Bryant has been importing from China for over 10 years and has started numerous product brands. He sold his multi-million dollar ecommerce business in 2016 and create another 7-figure business within 18 months. He’s also a former Amazon warehouse employee of one week.