This is part III of how I launched my first product on Amazon. If you haven’t yet read part I on how I discovered private label selling, you can find it here: Part I.
Amazon Private Label Product Research – Digging In
After a solid week of soaking up as much knowledge as I could after work from watching youtube videos and listening to podcasts, it was time for me to test out some of these tools on my own. The main tools that I knew I would be working with were:
Jungle Scout (https://www.junglescout.com/) – for product research and Amazon statistics and
Camelcamelcamel (https://camelcamelcamel.com/) – for BSR and Historic Price data on Amazon
What these two tools enabled me to do was narrow down my product search on Amazon to specific categories and specify certain criteria that I deemed necessary to even consider a product for private label. Then I would take a few products I selected and enter them into camelcamelcamel to see if there were any drastic changes over the past year that I should worry about (whether Amazon ranking or price changes).
Another theme that I kept in mind when beginning my research and which is a common theme you will hear about if you are reading / learning about selling PL on Amazon is the 10-10-1 rule. This rule stands for a goal you are trying to reach when selling a product and that goal is: you want to find 1 product that you can sell 10 units per day at $10 profit. When you do the math, this adds up to $100 per day, $3,000 per month, $36,000 per year. And that is just one product! If you can get one product performing like this model that will create around $36k in profit. What’s next? Automate that process and find another product that fits the 10-10-1 rule! The profit continues to grow.
Jungle Scout Research Specifics
When using the Jungle Scout tool, what is it that we are specifically looking for? This was the first question through my mind when I first thought about private label selling. How would I find my product, which category should I sell in, how do I know what product is best? The benefit of Jungle Scout is that it allows you to test as many different variables as you wish. Whether you only want to look through home & garden, or maybe you want to search through all categories except electronics and apparel. You can do just this based on the filtering model available.
This is an example of how the Jungle Scout web app looks after purchasing and diving into the product database. As you can see here, we are able to select specific categories, set our price range, net profit, sales rank, est. sales, and many more options. From the research I did prior to purchasing 1 month of JS, these are the attributes I cared about and the ranges I set:
What are the filters used for?
Category: Any except appliances, electronics, clothing, jewelry. These can vary, but it mostly comes back to the idea that I want to find a simple product with as few moving parts as possible and rule out returns. So for electronics, I don’t want to have to worry about broken parts, faulty manufacturing etc. And for clothes, I just wasn’t ready to get into that category. Search based upon what categories you feel comfortable selling in!
Price: I set my price between $25-60. You can go higher than this range, but I recommend staying away from the lower priced items. There are many reasons for this but the main reason is to ensure that you have the margins after selling to cover product cost, shipping and marketing. If you sell a $10 product and it cost you $4 per unit to get it here plus marketing cost, there isn’t much profit left over. Remember the 10-10-1 goal mentioned earlier. We want to make at least $10 profit per unit sold. Selling at a price $25 or up allows us more wiggle room with these margins and weeds out many of the low entry products that are flooding amazon (fidget spinners, garlic presses, etc.)
Rank: I set my rank between 1,000-10,000. The rank is the Amazon BSR, which you can learn more about here: https://www.amazon.com/gp/help/customer/display.html?nodeId=525376. What it basically tells us is how popular the item is on amazon and from that number we have a better understanding of how many units we may possibly be able to sell. I start the filter at 1000 because below this, things get very competitive and margins tend to drop. In this sweet spot, we can usually expect to get the amount of sales needed for our 10-10-1 goal.
Est. Sales: I set my sales with just a minimum of 300. This weeds out any products that don’t sell enough for me to reach my 10-10-1 goal (10 units per day x 30 days per month = 300 units) but allows me to see what products may be selling more as well. Keep in mind, this is just an estimation by JS about what the product is most likely doing on Amazon from the data they can see, and even if that product is selling X amount of units it does not necessarily mean you will sell that many too. It just proves that the market is there, it is up to you to make a great product and market it well!
Reviews: I set a max of 100 reviews. This is a pretty important factor in terms of how easily you will be able to ramp your newly launched product up to speed against the competition. Anything over 100 reviews and it will be pretty tough for you to compete with the best selling products and your competitors. If the product you find has under 100 reviews, this leaves you more room to run some promotions, marketing and get your product out there for some initial reviews. Imagine your new product having 10 reviews and going against a 50 review product, not too bad – Amazon shoppers wouldn’t think too much of it. Now think about 10 reviews going against a product with 350 reviews. Chances are the consumer is going to go with the latter product because there is more validation from previous purchasers that it is a product worth buying over your newly launched product.
Product Size: Standard. I only stick with standard size items for now as to not incur any large storage or FBA fees by Amazon. And if you are dealing with an oversized item, chances are shipping from China is going to be more expensive as well. Try to stick with an item that is about shoe box sized or smaller!
And Finally,
Seller: I choose Fulfilled by Amazon or Merchant, but not Amazon. Why? It is tough to compete against Amazon. When Amazon starts selling an item, chances are they can get it cheaper than you or compete in price. They can also pull the strings and run their own marketing. As a rule of thumb, I would prefer to not compete against Amazon with my private label items.
Now what?
With these filters set, click ‘Filter Database’ and let Jungle Scout do the work. What JS is going to do is search all products selling on Amazon and only show you the items that fit your selected criteria based on their database. Once again, these numbers are not proven to be 100% exact by any means but they are a great way to ballpark. Use the results you have found to find growing products or categories. See where there may be openings in the market for you to jump in and grab some market share. Find products that can be easily sourced from a supplier in China for you to test the market with.
Now I won’t go too deep into specifics on what I was looking for or what product I found and decided to test further with, but here are a few tips.
- Use the product tracker tool within JS. I think with the basic account it allows you to track up to 40 products. When you find a product that may be interesting, track it. This allows you to come back and check it later and see if you still think it’s viable. It also brings in tracking data on BSR changes, price changes, etc. You also probably don’t want to go with the first item you find!
- Keep it simple. This was a tip I got in the beginning of my product research and I think it is a great tip. This is why I ignore electronics, gadgets, jewelry, etc. I want to find a product with as few moving parts as possible. It can become a big quality hassle and could result in quite a few negative reviews with could be deadly to your product if you are shipping items that weren’t the quality you were expecting. Keep it simple and order samples to make sure!
- When you find a few products you think you have an opportunity with in the market, go over to www.aliexpress.com and search for these products. See if you can find them on this platform and order a sample! Start a conversation with the supplier and see what information you can find. Minimum order quantities, manufacturing time, pricing, etc.
Thanks for reading!
