When selling on Amazon, choosing the right product can make or break your success. Here’s a comprehensive guide to help you determine if a product is worth selling on Amazon.
1. Assess the Demand
**The first step is to check the demand.** This can be done by:
– **Checking the Search Volume:** High search volume indicates that people are actively looking for the product.
– **Analyzing Competitors’ Sales:** Investigate how many units your competitors are selling. Tools like Helium 10 can be invaluable for this purpose.
2. Evaluate the Competition
**Once you’ve confirmed demand, it’s time to assess the competition.** Here’s how:
– **BSR (Best Seller Rank) vs. Reviews vs. Sales:** Compare the BSR with the number of reviews to gauge the competitiveness of the niche.
– **Review Analysis:** Check the number of reviews for the top sellers in your niche. If many sellers have more than 10,000 reviews, competition is likely very high.
– **Newcomer Performance:** Look at how new sellers with 10-100 reviews are doing. If they’re succeeding, it might indicate an opportunity; if they’re struggling, investigate why.
3. Determine Your Sourcing Price and Margins
**Now, calculate your potential profit margin.** Here’s how to approach it:
– **Negotiate Your Sourcing Price:** Get the best possible price from your supplier.
– **Use the Amazon Revenue Calculator:** Input the ASIN of a top seller in your niche, then enter your sourcing price plus an additional $0.50 to $1 for shipping.
– **Analyze the Margin:** A 15-30% margin is considered good, depending on the product’s price. For products under $30, aim for a 30% margin. For higher-priced items, a 15% margin may suffice.
4. Start Small and Test the Waters
**Even if everything looks good, don’t order a large quantity upfront.** Start with a smaller batch to test the market before fully committing.
5. Consider Product Differentiation
**Differentiate your product** by offering something unique that competitors don’t have. This could be in terms of features, design, or packaging.
6. Avoid Seasonal Products
**New sellers should avoid seasonal products** like Christmas or Halloween items. These products often have a narrow selling window and can be risky for beginners.
