Product selection is a big part of how successful you will be as an Amazon seller. You need to choose high-demand, high-quality products that won’t get you in trouble with Amazon or the law.
Amazon has millions of products sold by hundreds of thousands of sellers, so you need to choose products that sell well and in large quantities.
In this article, we give you ten tips for choosing products that sell well, make money, and won’t give you any trouble.
1. Recognize Key Product Selection Criteria
As you look for product ideas on the market, keep the following criteria in mind:
- Solid profit margin: Make sure you can sell a product for a profit that makes your time and effort worthwhile. When estimating your profit margin, be sure to account for all fees, commissions, and other costs you’re likely to incur.
- Popular in online searches: Choose products that match commonly searched for words and phrases. Use keyword research tools such as Google Ads to identify keywords that are popular in terms of monthly search volumes and relevancy.
- Small and light: The smaller and lighter a product, the cheaper it is to store, pack, ship, and return. Avoid large, heavy products that can destroy your profit margin in shipping costs alone.
- Heavily advertised: Look for products that are heavily advertised on Amazon and other marketplaces and on the Internet in general. If you find a significant number of advertisements for a certain product, you know that a lot of sellers are betting on the product’s salability.
Check out social media and discussion forums to get ideas for more products that meet these criteria. Listening to the problems people have or the things they talk about can often help you find opportunities.
2. Find a Niche
Instead of trying to sell every imaginable product on Amazon, consider choosing a product category or even a subcategory to specialize in, such as lawn and garden, home entertainment, beauty products, silver jewelry, books, cellphones, or sports.
The more specific it is, the better. For example, you can start with a general category such as Clothing, Shoes, Jewelry, & Watches, narrow that down to Women, and then Jewelry, and Rings. You can always expand your scope to other subcategories within the selected category as demand for other items grows.
Choosing a niche offers several benefits, including the following:
- You can become an expert on a specific product type, which enables you to write better product descriptions and offer shoppers better guidance on how to select products that meet their needs and desires.
- You spend less time and resources than if you were to try to compete on a broader selection of products.
- You face less competition.
- You can more easily establish yourself as a leading seller in your niche market, increasing your visibility.
A product that doesn’t have a product video posted by a competitor on YouTube may be a good candidate to offer as a niche product because you can create a YouTube channel around the product. Cornering the market with a popular video can make a huge impact on sales, increasing your visibility both on YouTube and among search engines.
3. Sell What You Know and Love
The best salespeople know their product and love it so much that they feel compelled to get it into the hands of everyone they know. They’re excited to show it off to everyone, knowing that their customers’ lives will be better or more enjoyable as soon as they start using the product.
When choosing products to sell, think about the products you have or wish you had, activities and hobbies you enjoy, and products you know a lot about, whether it’s power tools, haircare products, jewelry, drones, home entertainment systems, personal fitness equipment, dietary supplements, or educational toys.
Don’t sell products you know little or nothing about. For example, unless you’re at least a weekend mechanic, don’t sell tools or supplies for repairing and maintaining vehicles.
4. Do Your Own Thing
Amazon is overcrowded with me-too sellers. Too many sellers look at the competition and want to be just like them. They list the same products with the same copy and photos for about the same price, trying to ride the competitors’ coattails of success.
To be highly successful in the retail industry, be unique. Amazon isn’t the place to blend in. Be yourself. Have fun in every aspect of your business, from selecting your product to composing product listings to delivering customer service. Let your personality shine, and express your enthusiasm over the products you’re selling. When you’re unique and having fun, people will be drawn to you and be more likely to buy from you than from other, run-of-the-mill sellers, even if you charge a little more.
“Do your own thing” can also mean manufacturing your own products to sell on Amazon. When you design your own product, patent it, and produce it, you eliminate the competition and reap several benefits, including the following:
The freedom to price the product to sell at whatever margin you desire and the market will support.
The ability to brand your products. As brand owner, you can claim additional benefits on Amazon, including the following:
- The ability to create brand pages, promote your brand, and engage with the customers more effectively.
- Amazon’s protection against counterfeit products, assuming you own the patent and trademark rights. Amazon will come to your rescue if anyone tries to sell knock-offs of your popular brand.
The opportunity to define the market through product innovation and perhaps even create an entirely new line of products around your ideas.
Control over the quality of the product, thus improving customer satisfaction leading to increased sales.
5. Don’t Expect Seasonal Products to Sell Year-Round
Seasonal products are great for boosting sales and profits at specific times of the year, but don’t expect seasonal items to sell year-round. Seasonal items are those that sell well during only certain periods of the year, such as the following:
- Holidays, including Christmas, Hanukkah, Easter, and Halloween
- Fashion items (such as winter boots and coats or swimming suits and flip-flops)
- Recreation and leisure activities (such as swimming and boating)
- Back to school
- Winter (shovels, ice-scrapers, space heaters)
Carrying some seasonal inventory is fine, but be sure your inventory includes mostly products that sell year-round.
Though some experienced sellers do well selling seasonal products, they usually have built-in alternatives to accommodate off-season sales slumps. As a new seller, you’d be hard-pressed to achieve success with seasonal-only products.
6. Decide Whether to Pursue Best Sellers
One strategy for increasing sales on Amazon is to list products that are in high demand on Amazon. Amazon encourages and facilitates this strategy by highlighting its 100 Best Sellers in every category and subcategory. These lists are updated hourly based on real-time sales data.
To find Amazon’s best sellers, go to Amazon.com and click Best Sellers in the menu bar near the top of the page. Amazon displays a list of Departments on the left and a list of Best Sellers in currently popular departments on the right. Use the Department list to navigate to the desired product category and subcategory. When you select a category or subcategory on the left, its Best Sellers are displayed on the right.
Pursuing Amazon Best Seller may not always be a wise move. Whenever a product becomes popular among Amazon customers, Amazon Sellers swarm to it to get their share of the sales and profits. If it’s a big enough seller and has a high enough profit margin, chances are good that Amazon will start to sell it, too, and perhaps even create its own Amazon brand equivalent. As competition stiffens, profit margins tend to drop.
7. Capitalize on Low Competition
For sellers on Amazon, the holy grail is a high-demand product with a great profit margin that few, if any, other people are selling. To find your holy grail, start by searching for products that are popular or are growing in popularity. Here are a few places to look:
- Amazon Best Sellers: Go to Amazon.com and click Best Sellers, in the menu bar near the top of the page. Use the Any Department list on the left to see the Best Sellers in specific product categories or subcategories.
- Pinterest: Search Pinterest for a product category or subcategory. The top search results are likely to show the most popular products in the specified category or subcategory.
- AliExpress: Go to AliExpress.com, choose the desired product category or subcategory, and choose Sort by Orders. This presents the products in the selected category by the number of items sold.
- Amazon product finder: Use an Amazon product finder, such as JungleScout (www.junglescout.com) or Helium 10’s Black Box (www.helium10.com/tools/black-box) to research products.
- Google Trends: Go to Google Trends (trends.google.com), search for the desired product category or subcategory, and scroll down the page to view a list of popular search terms in the category. For example, if you search for “fashion,” you’re likely to see a currently popular new fashion, such as camp style (which regards clothing that’s appealing because of its bad taste).
After finding a popular product, size up your competition on Amazon. Search for the product on Amazon to determine how many Amazon Sellers list the product. If nobody is selling it, you’ve struck gold.
If others are selling it, check out their reviews, as we explain in the later section “Check Competitors’ Reviews.” If one or more sellers have only a few (or no) reviews, you’ve found a product with relatively low competition. On the other hand, if one or more sellers have lots of reviews, you may be wise to pass on this product.
8. Focus on Products That Sell for More than 20 Bucks
Selling low-priced products on Amazon is a loser’s game. Even if you have a markup exceeding 300 percent, if you buy a product for $3.25 and sell it for $10, you’re lucky if you break even and very likely to sell at a loss. Shipping costs and Amazon fees will gobble up any profits.
Choose products that sell for more than $20 and comply with the 3x Rule. The 3x Rule is a method estimating whether a product will be profitable. Assuming you want to double your money, aim to triple it, figuring that your costs will eat about a third of your profit; for example, if you buy a product for $10, sell it for $30, and subtract $10 for costs, your net profit is $10 or 100 percent.
Consider selling a product that sells for $2 with net profit margin of 50 percent earning $1 every sale. Even though product margin is very good, you need to sell a lot of that product to generate a considerable profit. On the other hand, you can sell a product that costs $40 with a net profit margin of 30 percent, earning you about $13 every sale. You sell one item to earn $13 instead of having to sell 13 of a lower priced product.
9. Check Competitors’ Reviews
Prior to listing a product, search for it on Amazon to find out if other sellers list the product. If they do, check the product reviews for the following criteria:
- Number of reviews: If a product has hundreds or thousands of reviews, the seller is probably very well established, and you’ll have a tough time competing. Number of reviews and number of sales are closely related; so unless you’re sure you can compete with the top sellers on the number of reviews, you probably won’t be able to compete on sales.
- Number of negative reviews: If a product has dozens of negative reviews, you may be looking at a dud or an opportunity. If the negative reviews highlight defects or shortcomings in the product, you may want to steer clear of it. However, if the negative reviews point to problems with customer service, you may have success selling the product by offering superior customer service.
Use an Amazon product research tool, such as JungleScout or Seller App, to conduct your research. With such a tool, you can usually search for a specific product and then sort the list by number of sales and number of reviews.
10. Avoid Legal Issues
When selecting products, steer clear of those that have a high risk of presenting legal issues, which can be very expensive and time-consuming, not to mention harmful to your relationship with Amazon.
Make sure products or brands you’re planning to sell have no exclusive trademark deals, distribution agreements, or patents. If you want to sell such products, obtain written authorization in advance from the patent, trademark, or brand owner.