Tons of merchants have been incredibly successful in selling through Amazon FBA. What could start out as a small side hustle can be scaled to reap the equivalent salary of a full-time job.
Of course, it takes a bit of trial and error before you know what products and categories could be an Amazon gold mine. Keep reading for our tips on how to find the perfect products for success on Amazon FBA.
#1. Research, Research, Research, Research
Before beginning to sell on Amazon, take your time with product research to determine profitable products.
A great first step in figuring out what products are in demand is through the Amazon Best Sellers list. Amazon has more than 200 million users who are searching for essentials in every category you can think of.
Diving into categories and sub-categories helps paint a picture of where items rank as far as popularity and can also indicate if there is an opportunity in the market or if it is over-saturated.
It’s also important to consider profit margins and how much experience you need to excel, you can learn more about how to excel as a seller in top Amazon product categories here.
Helium10 also shares tips and tricks for how to ace Amazon research in Amazon product Research 101.
#2: Find opportunities without too much competition
Amazon sellers will have the most potential in categories that aren’t overly saturated.
Take a look at JungleScout’s 2400+ Low Competition Niche Products to Sell on Amazon and mix in the easy techniques below into your search to instantly identify if a category is too competitive.
- Top-rated products with minimal reviews are a good sign that the product hasn’t been discovered by too many users.
- If you research keywords for hypothetical PPC campaigns relating to a product and notice the prices are higher than $2/keyword this is a red flag that there is strong competition in this category.Learn more about advertising on our post, Amazon Advertising 101.
- Pricing trends help indicate whether a product has longevity. If you notice prices dropping this means sellers can’t retain customers and need to lower prices to stay competitive. You can use tools such as Keepa to track price drops and price histories for nearly 2,000 Amazon products.
Pro Tip: If the market in the US is too competitive for a certain category, a quick solution could be bringing the category to consumers on Amazon Canada.
#3: Read product reviews, then read them 2 more times
Reviews help build credibility and are an opportunity for Amazon sellers to show how and why potential customers can trust the purchases they are making.
Dive deeper into why reviews are important in Pattern’s post, Why Are Reviews Important on Amazon?
Pro Tip: Listening to what customers are saying can give you great insights as to what could be improved for that particular product. That way, you can find out how to offer something better than the competition.
#4: Do not violate trademark/licenses
This one is a no-brainer. Do a quick search to make sure you’re not selling something that’s already been trademarked.
There are different types of trademarks and licenses to be wary of. Some trademarks such as Disney or Mcdonald’s are obviously off-limits, but if you aren’t sure use USPTO to search trademarks to ensure you’re in the clear.
Amazon has very strict rules around infringing trademarks – review their protocol and Intellectual Property Rights policies for more information.
#5: Keep a watch on identified products
Amazon FBA Product Research | How to Use Jungle Scout – Product Database | 2021 Tutorial
Don’t just jump into it. Monitor prospective products to see if their rankings remain stable for 2-4 weeks before deciding which is the right one. Great tools to view this include Keepa, CamelCamelCamel, and Helliums 10 Sales History Tool.
Use Google Trends to see how consistent keywords are throughout the year in specific regions that you are interested in selling in.
#6: Avoid seasonal products in the beginning
The idea is to grow an e-commerce business that gives you year-round earning potential. In the early stages, seasonal products will limit your profitable months and decrease consistency in sales month over month.
Choose a product that helps you generate revenue throughout the year because it is something that people always need. When you’re ready to experiment with seasonal products, check out Helium10’s guide to How To Win Selling Seasonal Amazon Products.
#7: Ensure High Quality
Reputation is everything. Remember, Amazon verified purchasers will leave product reviews that can either make or break your FBA business. Make sure that your product quality is top-notch and offers value to your customers.
Pro Tip: Before committing to your manufacturer, do a sample order so you can test the product before going to market. AMZ Prep is partners with Alibaba, so our team is happy to help facilitate logistics around samples for wholesale orders.
#8: Start Small, Think Big
Your budget plays a role in dictating which product you can afford to start selling on FBA. Buying inexpensive products is the way to start.
Inexpensive doesn’t have to mean poor quality. There are a few flexible options you can select from when you’re getting started on Amazon.
All the information on pricing out what plan makes sense for you can be found on Amazon here.
If you want to set a small budget before you start, check out our post on what to do with $1000 and no FBA experience for tips and tricks on how to make the most with the least amount of risk.
#9: Identify products that offer good margins
Amazon FBA Calculator | How To Calculate Your Profits | Jungle Scout
What are the margins you can earn from selling a product through Seller central Amazon Canada? Whatever that number is, you need to make sure it’s actually profitable for you, and that it keeps you motivated to go all in.
A healthy margin to begin is around 25-30% after everything, including your launching & marketing spend. Use Amazon FBA Calculator to ensure the numbers make sense.
#10: Avoid awkward or fragile products
Taking into consideration products that are easy to prep and store in an Amazon warehouse is important. Choose products that are going to simply go through the fulfillment process.
Products that are small and light are easy and cheap to ship which is great for beginners.
Avoid selling anything with a limited shelf-life or that is super fragile or awkwardly shaped. Refresh yourself on the expiration dates on FBA products to ensure you’re not going to run into short timelines to sell merchandise.
Prepping your FBA products is more important than you might realize. If it’s not done right, Amazon will reject your product coming into their facility.
#11: Find manufacturers offering reasonable minimum order quantities
Find manufacturers or suppliers who can sell you their products at a good margin. Make sure their minimum order quantity (MOQ) is within your initial investment limit.
Review Alibaba’s wholesale tips for minimum order quantity. Determine a minimum inventory level that you feel comfortable storing in your Amazon warehouse and check in with your supplier to ensure it will be easy to get more units when needed.
If you’re scaling your Amazon business beyond 20 units, you’ll need to use Amazon FBM, which prevents restrictions and will allow for more revenue and growth.
Ensure you have 2-3 times the inventory in your Amazon warehouse that you predict you will sell in a month so that you are able to seamlessly process orders for Amazon Fulfilment.
#12: Sell white labelled products
Another useful way to increase margins is by selling your own Amazon private label. To do this, you need to find manufacturers who can supply products that you can sell under your own brand.
This is a great way to start establishing a brand that you can eventually use to diversify your product.
#13: Make sure the product isn’t restricted
Amazon FBA allows thousands of products to be sold, but they do have a list of products that are prohibited. This list can be found on FBA’s Seller Central page under FBA Prohibited Products.
Some products also require specific approvals from Amazon, double-check what products fall under this category if you’re selling in the US on Amazon Seller Central.
#14: Avoid competing with Amazon (Trust us)
Remember that while Amazon allows third parties to sell on their marketplace, they also sell their own products. Make sure to stay clear of products that Amazon sells because the competition with Amazon is too tough to rival.
Amazon has the clout to sell at a much lower cost than sellers and which can kill your business before it even gets off the ground.
Use the “Amazon.com” seller filter on the lefthand side of the Amazon website when searching for products to confirm if Amazon is the vendor.
#15: Figure out Fulfillment
Depending on what you are selling you’ll use Amazon FBA or Amazon FBM to ship your products to customers.
Amazon FBM: Amazon fulfillment by the merchant, or FBM, is a fulfillment method where you, as a seller, are responsible for distributing your product to your customer base directly; this includes controlling, handling, and shipping to your buyer. Whether it is through self-fulfillment or a 3PL (third-party logistics company), Amazon plays no part in the physical distribution of the product. Download the AMZ Prep Amazon FBM Guide here.
Amazon FBA: Amazon fulfillment by Amazon, or FBA is when Amazon takes care of the shipping and handling of a product. If you’re selling a smaller number of units and are ok with paying a fee to Amazon, FBA is a great strategy if you’re looking to strictly handle sales and let Amazon do the rest. Learn more about FBA here.
We hope these tips allow you to sell faster, more effectively and with less stress on Amazon.