THE

ULTIMATE
Guide to Amazon
PRODUCT RESEARCH

FIND YOUR NEXT WINNING

PRODUCT TO SELL ON
 Table of Contents
3. Introduction to the Amazon Opportunity
4. Choosing the Right Business Model
5. Why Private Label?
5. Steps of Amazon Product Research
6. Product Selection Criteria
11. Budget and Basic Startup Costs
14. Product Sourcing

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Introduction to the Amazon Opportunity
Selling on Amazon has exploded in recent years thanks in part to the e-commerce giant’s
support for 3rd-party sellers offering products on its platform.

The world of e-commerce has become more than a novelty option for buying items from a
retail store with Amazon as the spearhead of disruption in the retail industry. Whole compa-
nies and brands can now operate online without a
physical location, thus massively lowering costs for companies who decide to adopt a total
e-commerce model.

The decision to be online-only is why new, scrappy companies have been able to rise so
quickly to compete with and overtake the big box companies that we grew up buying from.

In terms of unequivocal dominance in e-commerce, Amazon has claimed the throne with no
signs of losing momentum. The company has evolved from a simple online bookstore to the
largest e-commerce platform in the world where companies can sell their products with high
visibility and an unparalleled
logistics system.

Since 2007, the percentage of products sold by third-party sellers on Amazon has doubled
from just 26 percent in Q2 2007 to 53 percent as of Q2 2018.
https://www.statista.com/statistics/259782/third-party-seller-share-of-amazon-platform/

If there was ever a time to start selling private label products on Amazon’s
platform, it is now. However, as more and more sellers join Amazon’s
marketplaces around the world, the competition becomes fiercer within certain product
niches. However, oAne thing is certain—the days of throwing a random product up on
Amazon with a few iPhone photos and forgetting altogether about the importance of
keywords are definitely over.

While many niches have become dominated by certain brands, finding the right product to
sell is the first real step to becoming a successful Amazon seller.

So, what do you need to do to get started?

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Choosing the Right Business Model
So, you’ve decided to join the ranks of many successful entrepreneurs around the world
selling products on Amazon—Congratulations!

However, you may now be wondering “Which method of selling on Amazon is right for me?”
It’s a perfectly legitimate question, and sometimes the answer can be a bit tricky. Here are
the three main styles of selling you can do on Amazon:

• Private Label - You create your own product, often modeled after existing
products already seen on Amazon, made with differentiating factors that make
it stand out among other competitors; these factors are usually improvements to
existing products to inspire customers to purchase your product over others.

• Retail Arbitrage - You purchase existing products from other companies

(typically well-known retail brands like Samsung, Nike, etc.) from a store or online and
resell their products on your own Amazon listing, typically for a higher price.

• Wholesale - You purchase products directly from a manufacturer and then sell the
items as an Amazon reseller. You are in essence like any retail store (Walmart, Target,
etc.) that obtains stock to sell to customers with the exception of being online-only via
Amazon.

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Why Private Label?
For the purposes of this Amazon product research guide, we will be focusing on the private
label business model for selling on Amazon. Private label branding can be a very profitable
way to sell products on Amazon and is fast becoming the business model of choice for most
sellers. Private label also grants you many benefits over retail arbitrage and wholesale.
Some benefits include:

• You own the rights to the product and can scale your business without
outside restrictions

• You can make changes to your product to be more competitive in the

marketplace instead of having to sell products “as is.”

• Once your business is profitable, you are free to sell it and exit the business for profit
that can be as high as 8 figures.

While you can make money on Amazon with retail arbitrage, the practice is
becoming more difficult each year. Retail brands face more competition each year and do
not want others encroaching on their online sales, especially not with their own products.

Steps of Amazon Product Research

The list below covers the basic necessities and aspects of a new Amazon business. These
are things you must consider before selecting a product to sell on Amazon:

• Product Selection Criteria

• Budget and Basic Startup Costs
• Product Sourcing
• Supplier Outreach and Negotiation
• Additional Things to Keep in Mind

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Product Selection Criteria
Now you are on to the fun part of the product research process: narrowing down your list
and deciding on which product to move forward with.

If you are a brand-new seller that has never sold anything on Amazon before, we suggest
starting with a product that is simple to manufacture and doesn’t come with a long list of
complications.

When deciding what kind of products to research, there are two generally-accepted schools
of thought:

• Choose what you love: You target products that you are familiar with,
whether you have experience using them or just find them fascinating. Some sellers will
tell you this is the better path to building a “real business.”

• Choose what sells: You target products that you may not necessarily be
familiar with but are already selling well on Amazon. While many Amazon
sellers choose this option, it is difficult to build a trusted, long-lasting brand when the
products are unrelated from different product niches. If you expand your brand into other
products, ensure that they are all interrelated and can be used in conjunction with each
other.

Whichever path you choose to use, simply typing in search terms related to your ideal
product can take many hours or even days to conduct thorough product
research on Amazon.

You can more easily discover products you are looking for by utilizing the power of Amazon
product research tools like Black Box by Helium 10 that has over 450
http://www.helium10.com/blackbox
http://www.helium10.com/blackbox
million different ASINs in its database with the relevant details you seek, all in one place.

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When evaluating product viability in your product search, pay close attention to these
factors:

Product Simplicity
The difficulty level of manufacturing the product.

NOTE: the fewer moving parts, the better.

Demand for Product Type

Demand on Amazon is partially determined by search volume for main keywords associated
with your product type, but also how many customers want your kind of product.

NOTE: Products with low demand on Amazon require more marketing efforts off of Amazon
to drive outside traffic to your listing (this can get expensive if you aren’t a traffic wizard).

Competition/Market Saturation
Competition on Amazon is determined by the number of other sellers offering the same or
similar products to your own.

NOTE: If the marketplace you plan to sell in has a high number of sellers offering something
similar, it will be tougher for you to compete in that product niche. Think to yourself, “would I
buy my own product if every product on page 1 looked the same?”

Review Count
The number of reviews a specific product ASIN (Amazon Standard Identification Number)
has.

NOTE: If most sellers on page 1 have 300+ reviews, the product may be
considered a “high barrier to entry” item, meaning that your ability to compete with existing
products will be much tougher. A higher number of reviews is usually an
indicator the listing is older and more established on Amazon, and therefore more difficult to
“bump” them from their spot or “steal” sales from them.

Successful Competitors
The number of sellers on page 1 making high revenue per month.

NOTE: It’s good to see many sellers making money on page 1. If only a few sellers are
doing well, it means they control most of the market share, making it hard to compete. To
stay competitive in this case, you must have a big budget and/or key differentiating factor
that makes you stand out in the market.

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Successful
Star Rating of Competitors
Sellers on Page 1
The number of
The approval sellers
rating on page
of specific 1 making
products givenhigh revenue per
by customers, month.
ranging from 1-5 stars (1 =
NOTE: It’s good
poor rating, 5 = goodto see many sellers making money on page 1. If only a few sellers
rating).
are doing well, it means they control most of the market share, making it hard to
NOTE: If all
compete. Tothe products
stay on page
competitive in1this
of your search
case, are between
you must have a4-5
bigStars,
budgetyouand/or
may have
key a
tough time competing; creating a better product or a unique
differentiating factor that makes you stand out in the market. feature will
differentiate your product in a market with similar products.
Star Rating of Sellers on Page 1
Pricing
The approval rating of specific products given by customers, ranging from 1-5 stars
The range of prices for similar products on page 1 is an important factor to
(1 = poorAs
consider. rating, 5 = good
a general rule ofrating).
thumb, don’t try to “reinvent the wheel” and be sure to listen to
NOTE:
what the market is saying. Ifon
If all the products page
most 1 of your
products search
on page are
1 are between
priced 4-5 $20-$25,
between Stars, you
it’s may
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have a tough
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to the market. Things couldcreating a better
get ugly product
if you try orthis
entering a unique
marketfeature
at a $50will
price
differentiate
point. That said,your product
this in a market
same market may bewith similar
primed andproducts.
ready for a premium priced product,
so don’t always let price deter you pricing your product higher than others.
Pricing
NOTE:
The While
range of price
prices can
fordepend
similaronproducts
the product itself, shipping
on page costs, etc.,factor
1 is an important we to
suggest looking for products with a retail price of at least $15
consider. As a general rule of thumb, don’t try to “reinvent the wheel” and per unit to give yoube
a decent
sure to
profit margin after FBA fees.
listen to what the market is saying. If most products on page 1 are priced between
$20-$25, it’s best to listen to the market. Things could get ugly if you try entering
Seasonality
this market the
Determines at ademand
$50 pricefor apoint. That
product said, thisthe
throughout same
year;market may
does the be primed and
product
ready for a premium priced product, so don’t always let price deter
interest people at a specific time of year, or is it considered lucrative all year youround
pricing your
(“ever-
product
green”)? higher than others.
NOTE: While price can depend on the product itself, shipping costs, etc., we
suggest
NOTE: For looking for products
new sellers, targetingwith a retail products
evergreen price of at leastsearch
in your $15 perwillunit to give you a
be less
difficult to implement because
decent profit margin after FBA fees. of the consistent demand for such products.
Seasonal products are recommended for experienced sellers due to the high
upfront capital involved and the level of risk but can be sold at a later time as a
Seasonality
supplemental revenue stream.
Determines the demand for a product throughout the year; does the product
interest people at a specific time of year, or is it considered lucrative all year round
Legal Compliance
(“evergreen”)?
The laws, regulations, and restrictions placed on specific product niches by
NOTE: For new
governments and sellers, targeting
regulatory agencies, evergreen
dependingproducts
on whichinAmazon
your search will beyou
marketplace less
plan
difficult
to sell in.to implement because of the consistent demand for such products.
Seasonal products are recommended for experienced sellers due to the high
upfront
NOTE: New capital involved
sellers wouldand the to
be wise level of products
avoid risk but can
that be soldaatsignificant
require a later time as aof
amount
government oversight,
supplemental revenue stream.ranging from the materials used to build it to fees for being imported
into the country in which your Amazon marketplace operates.

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Product Size
The physical dimensions (length, width, and height) of your product along with its weight.
The size of your product can alter some of your costs such as
manufacturing, shipping, and storage fees.

NOTE: The bigger and heavier your product is, the more your shipping costs may increase
as well as limit your transportation options. Lighter, smaller items are
recommended for new sellers.

Intellectual Property Protection

Legal restrictions instituted by patents and trademarks of another seller that
prevents you from copying or duplicating specific features or products.

NOTE: ALWAYS research into a product to see if the seller holds any particular
exclusionary or proprietary patents BEFORE pursuing a similar product to reduce your risk
of being sued or removed from Amazon.

Sales Trends
The revenue trajectory of an ASIN’s sales data; have sales increased, decreased, or
stagnated over time?

NOTE: Products that show a decline in sales across multiple ASINs may be losing demand
with customers or was a quick viral product for a short time frame (i.e. fidget spinners).
Sellers should try targeting products that are on an upward trend, which often means the
product is gaining demand. Stagnant sales may also present an opportunity for a product
with favorable differentiation.

Return Rates
The frequency at which customers return a product; of all products sold, how many are
returned?

NOTE: If you do not want to deal with a high volume of returns, you may want to
stay away from products that offer multiple varieties or sizes; customers will often
order or receive the wrong size, color, or other variation, resulting in a returned
item. Additionally, brands that have a high return rate may also have a quality
problem, which can be an opportunity for new sellers.

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IMPORTANT: The ideal product to sell on Amazon for beginners has the following
criteria:
• Little to no moving parts
• No legal or restrictive red tape
• Relatively low cost to produce per unit
• High demand
• Low competition
• Current competitors have a mediocre star rating and review count
• Can be sold year-round without demand dropping

Whatever you choose, be sure to create a list of about 10-20 different products that
fit your product criteria and budget. From that list, you can narrow it down by further
evaluating multiple factors listed above that affect the viability of a product to sell
and eventually make a profit.

http://www.helium10.com/xray
We suggest using tools in the Helium 10 Chrome Extension to expedite your
research of critical factors that impact a specific product’s viability and profitability in
the marketplace.

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Budget and Basic Startup Costs
One of the first things to consider before choosing a product to sell on Amazon is to evalu-
ate your financial commitment and risk tolerance. The amount of startup capital you have
and how much money you can afford to contribute to grow your business month after month
can be a big deciding factor in the kind of product you can afford to sell.

IMPORTANT: Your startup costs do not only cover your first batch of inventory. You have to
plan beyond that. After all, selling a private label product on Amazon is a business, and
should be treated as such.

Here are some of the basic costs to consider BEFORE conducting product research:

Amazon Seller Central account

When you first sign up for a seller account on Amazon, you will be given two
options:
• Sell as a Professional – $39.99 monthly fee
• Sell as an Individual – free account, but Amazon will charge you $0.99
per sale

However, if you’re serious about building a business on Amazon, we recommend choosing

the “Sell as a Professional” from the start, as you will get more features and a better deal in
the long run.

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Initial Inventory
When ordering your first batch of inventory, you need to ensure that you not only have
enough to sell to potentially eager customers but also for marketing purposes like product
photography, giveaways (“loss leaders” which are units sold at a huge discount to get initial
sales), or gifted units to send to influencers or bloggers.

In the beginning, order enough product for giveaways to give your early sales a boost to
rank highly for your main keywords. You also need to ensure that you have enough units to
last until your next reorder arrives (depending on what your product is and where it is
coming from. The average time from a supplier to your storage
location can range from a few weeks to a few months, so plan accordingly.)

Running out of inventory is bad and Amazon may actually show your listing to fewer
customers, even if your keyword SEO is perfect.

PRO TIP: if you run out of inventory, close your listing until you get back in stock. This
preserves the trailing sales history and momentum you had leading up to
running out of inventory).

Transportation Costs
Make sure to include shipping fees, freight costs per unit, import tariffs, and everything else
included to get the product to Amazon warehouse (a.k.a. “landed cost”).

Storage Fees
Whether you use FBA (Fulfilled by Amazon) or FBM (Fulfilled by Merchant) as your fulfill-
ment method, you must account for storing and shipping your product to
customers.

Second Batch of Inventory

In reality, you should be planning to order your second batch of inventory fairly soon. If your
product takes off in a viral way and you sell them like hotcakes, it would be wise to have
already ordered your second batch of inventory so you don’t run out. Ordering early can
prevent you from running out of stock too soon.

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UPC Codes
These unique codes are a set of numbers on a barcode that represent the digital blueprint
of your product. Retailers scan these codes into their point of sale
systems for inventory tracking and purchases, now so does Amazon. The most
legitimate organization offering UPC codes to Amazon sellers is GS1 (Global
https://www.gs1us.org/
https://www.gs1us.org/

Standard 1), which has many branches around the world depending on where you live.
You’ll need UPC codes to create your listing inside your seller central account and from
there you can generate your FNSKU codes which are needed for FBA
inventory.

Product Photography
While you can certainly take photos of your product yourself, they may not be as
attractive to customers compared to professional-grade photos. Amazon has
specific guidelines concerning product photography, and you must ensure your photos are
compliant as well as eye-catching.

Unless you are a good photographer with the necessary equipment, you are better off
paying a professional to do everything from your main white background image to your
lifestyle images so you can show your product in use.

Professional product photography can often cost up to several hundred dollars but will be
money well spent on your product’s first impression on customers. Since there are so many
options on Amazon, you may only get one shot at a first
impression.

Branding
Remember that you are not just creating a single product; you are creating an entire
business, so you will need to account for creating things that spread your brand, including:
• Brand logo
• Custom packaging
• “Thank you” inserts for personalized notes that thank customers for
purchasing your product

Product Samples
Once you have narrowed down your product selections, you will want to see
samples of your products from different manufacturers to see who best
suits your needs.

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Product Sourcing
Once you have settled on a product that you wish to sell on Amazon, you must now think
about where it will come from. Sourcing a product can carry different costs depending on
whom you contract with and where the manufacturer is located.

For most sellers, they do not have their own manufacturing facilities, so they outsource the
work to suppliers within their own country or go beyond their borders hoping for a cheaper
cost per unit. Suppliers are either one of the following:

• Domestic – Contracting with a manufacturer within your country or region. For example,
US-based sellers would source from manufacturers within the United States.
• International – Contracting with a manufacturer outside of your country or region. For
example, many US based sellers source products from China due to their immense
infrastructure of factories that produce a massive variety of goods across many industries,
often times at a lesser cost than in the US.

Both options have their pros and cons, so consider some of the factors listed below when
making your choice:

For domestic sourcing (the US and Europe), the following tends to be true:
• Manufacturing costs tend to be higher with a higher paid workforce
• Shipping products can take only weeks instead of a month or more
• Shipping costs tend to be less than shipping internationally
• Import taxes and tariffs are usually not applied
• Manufacturing quality tends to be higher (depending on the product and
materials)

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 • Cultural clashing and communication tend to not be an issue
• Domestic manufacturers are typically compliant with and knowledgeable of US and
European consumer product regulations

Examples of domestic suppliers can be found on Thomasnet.com, but others can be found
via Google Search.

For international sourcing, the following tends to be true:

• Manufacturing costs tend to be lower with a lower paid workforce
• Shipping products can take a month or more
• Shipping costs can vary depending on the weight and size of your products, distance to
your storage facility, and the method of transport (ground, air, or sea)
• Import taxes and tariffs can be applicable
• Manufacturing quality can vary based on the supplier’s reputation and quality of materi-
als
• Cultural clashing and communication issues can be present, so learning the culture of
your supplier may help with pricing and negotiation
• International manufacturers may not be as knowledgeable of US and European
consumer product regulations. Be sure to communicate clearly so you stay compliant with
all safety regulations. .

Examples of international suppliers can be found on Alibaba.com and 1688.com.

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Where Should You Have Your Product Manufactured?
Where you have your products built depends a great deal on what kind of product you have
chosen to sell on Amazon. The needs of your product may require more specialized work, or
it can be adapted from an existing mold at a factory.

According to a 2016 survey, the highest producing countries for manufacturing include:
https://www2.deloitte.com/in/en/pages/manufacturing/articles/global-manufacturing-competitiveness-index.html
https://www2.deloitte.com/in/en/pages/manufacturing/articles/global-manufacturing-competitiveness-index.html

• USA
• China
• Germany
• Japan
• India
• South Korea

While the countries above are well known, be sure to go the extra mile in your research to
uncover the areas in which they specialize.

Supplier Outreach and Negotiation

Once you have narrowed down your product selection, we recommend you reach out to
multiple suppliers and ask for sample products. Just as you might price check different
stores for the same product, you should do the same with manufacturers. By “shopping
around” for suppliers, you can judge the following factors:

• Price
• Communication Style
• Product Quality

However, if you are new to this business, you may not know where to start looking for
suppliers. While you can certainly try the websites listed above, you likely will not be able to
negotiate the best deal for yourself via a website.

PRO TIP: Try adding some personalization to your supplier outreach by getting on the
phone, or better yet a video call.

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Finding a Supplier

Cold calling around and looking suppliers up on the Internet may feel like a daunting task,
but here are some effective ways for finding suppliers:
• Sourcing Agents - Professionals that helps you find a supplier using his or
her vast network of contacts
• Industry Events - Trade shows and events that cater to your product niche
can yield companies whom you can partner with to produce your private label
product
• Manufacturer Fairs - Events such as the Canton Fair in China are held
annually to bring together the country’s many manufacturers to show off the products
they build

Use one or a combination of these options to talk with and test out different suppliers. Once
you’ve been able to gauge each supplier, you can choose the one that best fits your
business.

Negotiating Terms with Your Supplier

As in any form of business, getting to know your supplier personally and building a strong
relationship with them can go a long way when it comes time to talk
business.

Some things you can do to help strengthen your bond with a new supplier include:
• Meet in person - If they reside in another country, you may want to make the trip out to
their facility and take a tour

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 • Meet socially - Sometimes going to dinner or engage in social activities can
help you get to know the supplier personally, which can lead to a stronger
bond and better terms for you in the future

• Treat them with respect - Just like anyone else, suppliers are humans and
like to be treated fairly

IMPORTANT: It’s recommended to not beat them down on price too much at this stage as
this supplier could essentially be your business partner in the future. If you treat them poorly,
they are less likely to give you better pricing or priority
manufacturing down the road.

Once you are satisfied with your new supplier, the quality of the sample, and the terms of
your business, you can place your first order and begin to build your
listing. After your first batch of inventory is complete and you have checked the quality, it’s
time to move on to SHIPPING & LOGISTICS!

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