Selling products on Amazon is one of the best eCommerce business. People and companies are selling almost everything on the platform. Name a product and go to Amazon, you will easily find it. Now if you want to join Amazon as a seller the most important question is what is the perfect product to sell at Amazon? This article will give you an insight into the product selection process in the Amazon FBA business.
The product selection process includes certain factors that should be kept in mind while finalizing the product. You need to check the product details from different platforms like Jungle Scout and Helium 10. Ignoring this most important step can bring a loss of money and time. Moreover, another process related to this is checking the viability of the product.
The product selection process is mostly a one time process. However, viability checking is a continuous process that helps you to keep your product according to the market need. For example, you are selling one piece pack of a towel. However, now the market is changing and people are preferring pack of 3 or 6. So now you have to create a variation and make your product viable for the Amazon marketplace.
Best Product to Sell on Amazon:
To select a product for Amazon one has to keep in mind the following factors. These factors ensure that the product, in the long run, can be sold on the marketplace. Furthermore, compliance with these criteria means a high chance of success in the Amazon business.
High Search Volume:
The first factor to chose the product is that people are searching for that product. It means the product is in demand and people come to Amazon especially to buy it. There are many products that are less in demand so try to avoid them.
For example, people usually search for home crockery items and many times specific items like spoons. So try to select one of the searched items and then check the remaining other criteria.
Low Competition:
The second thing to check is that there is less number of sellers selling that item. Otherwise, it becomes difficult to compete with them. Many times Amazon is selling by itself with different variations. Selecting such items is a bad idea.
For example, you select a product which 10-15 other people are selling. Moreover, they have a lot of sales and review numbers and have ages of more than 3 years. How can you compete with them. So try to find a product that has low competition.
Reasonable Sales Velocity:
Sale velocity is another factor that tells that the product is in demand. Check the daily and monthly sale velocities of the existing sellers. While checking the velocity always keep in mind that it should not be too high that when you start selling after 4-6 months, you cannot compete with them. So the product should have reasonable sale velocity. Not too high, not too low.
Good Overall Product Rating:
The rating tells us the complaint level of the products. Some products naturally attract bad reviews and hence have more complaints and returns. This decreases your profit ratio.
For example, a food product is not a good idea to sell. Everyone has its own tastebuds and there are chances that you start getting bad reviews.
So try to select the product with an overall rating of more than 4.3. If the existing products have ratings below 4, it means they should be ignored while selecting.
From Non-Gated Category:
Amazon has two categories of products, gated and non-gated. The gated products are those which need special approval from Amazon before selling. So it adds to more processes and complications. That’s why try to select the product that lies under the non-gated category.
No Brand Dominance:
Selecting a branded product has always a threat in the future. There are chances that the brand starts selling by itself and so Amazon restrict you from selling that item. So never select an item that has a brand dominance.
More Profit Margin:
People usually don’t do the profit calculations right. So after the launch, they get less profit than expected before, causing difficulty in managing the business. Keep in mind all costs including the taxes and Amazon share and then finalize the profit margin.
Try to select the product that gives you at least a 30% margin. In this way, if in the future there is any price hike or any other cost added you have room to play with a similar price tag.
More Potential to Grow:
As there are many people selling on Amazon, so you should do a competitive analysis with their products. Select the product that has more potential to grow. Check BSR (Best Seller Rank) for the top seller. It will give you a rough idea that your product has chances to grow in the future.
Bottom line:
Spend your maximum time on the product selection process and check the viability of the product from time to time. Never launch a product that is no more viable. Take your time and check maximum products and then finalize the best option. This will increase the chances of success in the Amazon FBA business.