While creating an Amazon seller account is one task, much effort goes into finding a reliable product to sell and ensuring the business is successful and sustainable. With over 2 million Amazon sellers globally, the competition is fierce.
Customers are enlightened enough to conduct thorough research and choose a product that fits their preferences, from low price points to top-notch quality.
Sellers, on the other hand, seek products with high-profit margins and acceptable search volume. But what qualifies as a winning product, and how do sellers find one? This guide will help make your e-commerce journey more profitable and less daunting.
🌟 Characteristics of a Winning Product 🌟
When starting a private label business on Amazon, the aim is to find low competition and high-demand items. While the approach seems straightforward, you need to dig deeper to be confident about a product’s success on the platform.
High Demand (Search Volume)
Regardless of the product or niche you like, you’ll fail to drive sales if people aren’t searching for it. You need to search for a product that currently has medium to high search volume. An item that consumers search for regularly is popular and trending. Evergreen products are fine as well.
But how would you determine a healthy search volume?
Ideally, you must target a search volume of 5,000 when selling on a popular and crowded platform like Amazon USA. Otherwise, you’ll struggle to generate sales if the item doesn’t hit the minimum search volume or if the market is too saturated.
Low Competition
The story doesn’t end after you find a product with a good search volume. The item must also have low competition for you to sell it. Of course, many skilled entrepreneurs have been in the business for a long time, and gaining an edge over them isn’t a walk in the park.
Therefore, you should aim for a low-competition product to boost the chance of generating more sales, especially when you’re first beginning your Amazon seller journey. You can also check product reviews to learn more about the competition in a particular niche.
Ideally, a product should have less than 50 reviews. Anything above that would require extra effort on your part to sell. Similarly, avoid selling products in a niche with thousands of reviews because that’s a highly competitive item that is already established in the marketplace. It would take a large budget to compete.
A Profit Margin of At Least 15 to 20%
As a business owner, perhaps you have an ideal number in your head for calculating profits. However, we recommend targeting at least a 15-20% profit margin initially. It will keep you covered and allow you to keep things afloat in the event of business pitfalls.
For instance, earlier this year, Amazon sellers saw their FBA fulfillment and referral fees increase by up to 12%. Of course, you do not want to transfer such liabilities to your customers. Targeting a minimum 15-20% profit margin will ensure you don’t.
Price Point Above $25
Selling on Amazon doesn’t come cheap. Several things take a chunk off your annual revenue, from PPC costs to FBA fulfillment.
Therefore, you need a profitable sales price point to tackle things like a pro seller. Ideally, anything more than $25 would help lock in better profits. A higher retail price would help you achieve the goal. However, you must not start selling costly products.
It will turn away your customers, essentially, if you’re a new seller. Therefore, consider selling a product under $100, ideally.
Easier to Ship
What makes a product easier to ship than others? Anything lightweight, portable, and not-so-delicate. It must also not have excessively moveable parts.
Note that this approach doesn’t guarantee saving shipping costs or driving more sales; it does however provide the security of decreasing returns!
Wondering how?
Easily breakable products often get damaged, increasing the returns and refund rates. Surging return rates are a downside, and the platform may flag you for it.
Low Seasonality
Maintaining consistent sales on Amazon is a challenge per se; perhaps you do not want to make things more taxing by choosing a seasonal product.
Go for an evergreen, year-round product that consumers love to buy regardless of the time of the year. Yes, you may experience a fluctuation for a few months; the product would likely remain in demand year-round for the most part.
Allows for Brand Extension
Generating consistent sales for a single product is good. However, you must be on the lookout for ways to extend your brand. How do you plan to scale the brand and avoid saturation?
Successful Amazon sellers have multiple items in their catalogs. That’s what helps them become a “brand.” While starting with a single product initially doesn’t hurt, you must aim to extend the line and expand your brand presence on Amazon.
For instance, say you began your journey by selling Tie Dye T-shirts. Now is the time to sell more customized T-shirts and extend the brand by introducing tie-dye trousers or different colored shirts.
Tips to Sell a Product On Amazon
You’re a step away from becoming a brand if you find your ideal product. A look into some tips will help you drive sales and take your business to the next level.
- Consider Amazon automation. Amazon Elite Automation allows you to automate your Amazon tasks, from order fulfillment to demand, planning, and more. Investing in a fully automated Amazon FBA business makes you more productive and lets you focus on other, more crucial business tasks.
- Provide an invaluable experience. Personalization and transparency are two things customers value. The better customization you provide them and the more you’re open about brand stories, the higher the chance of generating sales.
- Write a quality product description. Nailing your product description requires excellent copywriting skills. Plus, you must strategically use relevant keywords to rank on Amazon search and boost sales.
- Get in touch with influencers. Customers seek influencer recommendations like they consider suggestions from friends. So, you can leverage your business by contacting some popular influencers in your industry.
Conclusion
Finding a profitable product can be a pain in the neck if you do not know how to look for one. Our guide highlighted the characteristics of a winning product to make the process hassle-free for you. By implementing the use of our recommended e-commerce tools you will be off to a great start.
However, once you have the product, you must seek ways to boost sales by writing SEO-optimized product descriptions, titles, and bullet points and offering a positive customer experience to encourage customers to return and purchase from you again.
The success of your e-commerce business significantly depends on seamless consumer experience. The more satisfied the customer, the more they’ll spread positive word of mouth – a win-win for you, your brand, sales, and marketplace recognition.
