Picking products is one of Amazon sellers’ biggest issues when looking to start or grow their Amazon business. Here are my top 5 thoughts when selecting a product:
- Sales Potential, not passion. It’s not about passion, it’s about sales. If you want to make a lot of money, you must choose products that attract a lot of eyeballs. I’m not sure how many sales you can get from knitting products, but if it’s a hobby that doesn’t have a lot of traffic; don’t walk into the light. It’s all about finding a good balance under high market saturation and above medium sales velocity. You want products that can eventually turn a couple of thousand units per month. Slow selling products create a bottleneck on growth and capital. Try sticking with the lower BSR products.
- Profit Margin. The win is in the buy. You make your money by how discounted you purchase the product for, not when you sell it. Keeping profit margins high facilitates growth, sustainability and a good lifestyle. Finding high profit margin products is not easy, but it’s your job to locate these products or bundle your way into higher profit margins. Some people choose low profit margin products with high velocity, this is ok also, but it will take a lot of resources and is not recommended for new or lower capital sellers.
- Beware of Competition. Does your product compete with a huge name brand? There may be a scenario you can compete, but I wouldn’t spend my money trying. Its very hard to compete with brands that influence Amazon customers on a daily basis through TV and radio. Stick to products with a low brand barrier to entry.
- Depth of market. Make sure all the money within your product’s market is not being sucked up by the top 1-3 sellers. There should be a healthy amount of Amazon traffic and revenue being circulated to all sellers within the first page of results when you search for the product’s most relevant keywords..
- Make sure your product and its sales can’t be compromised in the future, by either Amazon or other merchants. Your chosen product should be clear of legal issues, fad/trends, certification hurdles, high defect rates and most importantly stay away from products with the race to the bottom scenario.
I can go on and on, but I would say these are my top 5 scenarios for choosing the best products. All that said, no one can truly tell a good vs bad product pick until you try selling it. However, at least with the 5 step criteria you eliminate about 80% of the losing product choices. To find out if you’re choosing the wrong products stay tuned for part 2 of the series where we dig deeper into each section.