Part of our Series on How to Sell on Amazon for Beginners
Everyone looking to start an ecommerce company or sell on Amazon has the same biggest problem – what do I sell? 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
- What Works Right Now with Products and What Doesn’t
- What is a Differentiated Brand and Product?
- How to Succeed with Easily Differentiated Products
- The Cockroach Method for Product Development
- How to Find the Right Niches (and then products)
- How to Find Products to Sell Online
- Product Differentiation 101
- How to Keep Your Products Profitable
My Ecommerce StoryI’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.
What Works Right Now with Products and What Doesn’tWhat works with product development has gone through a few phases over the last several years. 2005 to 2011 – The rise of Drop Shipping. eBay is Big. In this period you could sell just about anything online. Existing brands didn’t know about ecommerce and were happy to resell to internet marketers. Drop shipping was big. If you imported from China you didn’t need to differentiate your products at all. However, there was limited ecommerce demand. 2012 to 2016 – The rise of private labeling and FBA During this time private labeling is started to really take off. This means basically finding products from China, putting your company’s name and logo on it, and putting it on eBay or Amazon. Amazon FBA starts to become big. Drop shipping still works but is becoming less viable. 2018 to now – Strongly differentiated D2C brands and products This is where we are now. Today, you need to have product brand and product that is different from the competition. The Dollar Shave Clubs and Caspers of the world thrive. There’s still some opportunity for private labeling, but it’s on the fringes.
What is a Differentiated Brand and Product?In today’s crowded ecommerce world, you need to stand out from your competition in order to succeed. You can do this by either making your brand stand out or your product stand out. You cannot just find a product to import on Alibaba, slap your logo on it, and expect to retire in a couple of years. Dollar Shave Club is an example of a strongly differentiated brand from a marketing perspective. Their path to being acquired for $1billion started on one viral ad they did that framed themselves as a cheeky and young brand. However, you can also differentiate yourself simply by building a better mousetrap. The Instapot is a great example of this – it’s legitimately better slow cooker than anything else on the market. But Dave, you say, producing a highly elaborate video ad sounds hard and engineering a world class slow cooker with timers and digital screens sounds even harder. What can I do as an aspiring ecommerce entrepreneur with limited experience and limited money?
How to Succeed with Easily Differentiated ProductsThere’s still an opportunity to build a business selling on Amazon by building lightly differentiated products. Here are some ways to easily change your products:
- Bundle it with other popular items
- Offer it in different sizes
- Offer it in different colors
The Cockroach Method for Product DevelopmentI 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.
Aim to Build a Catalog of 5 to 10 ProductsHere’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.
|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
How to Find Products to SellI can’t stress enough the importance of finding a niche first and then looking for products. When it comes time to look for products I’ll give you some key pointers. Most of your product research is going to start with keyword research. You want to see what people are searching for on Amazon as this tells you what people are looking to buy. I personally use Helium 10 (affiliate link) as my keyword research tool of choice but there’s a ton of good research tools out there. First, like I mentioned before in regards to the cockroach method, I’m looking for relatively low demand items with few competitors in them. Most of the time, this means keywords with search volume of 1000 to 2500 search a month. 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: From the search volume estimates from Helium 10 we can see some great potential products are horse grooming kits, horse brushes, and saddle bags for horses.
More Keyword Research with Helium10Check 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.
How to Easily Differentiate Your ProductsThere 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
- 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.
Other Good and Bad Qualities of ProductsHere 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.