Episode #42: Greg Mercer of Jungle Scout Interview (Product Research – PART ONE)
(Note: all links to Jungle Scouts are affiliate links).
How did you come to be selling on Amazon? & Why Private Label?
Greg started with a day job as a civil engineer. About 3 years ago, he started buying items wholesale and sold them on Amazon. As that got more competitive, he switched to Private Label products.
What is difference between Private Label vs. Wholesale model?
Wholesale: buy welk known brands from wholesaler, then sell on existing listings and rotate through the buy box, which is normally about the lowest price. 3 years ago that was okay, but it became very competitive.
With PL, you own the listing; since it is your product, you can justify work getting reviews, nice photos etc. Greg never did the Retail Arbitrage (RA) model because it is not scalable. Greg was looking for a system, not exchanging hours for dollars
Why develop Jungle Scout?
The biggest bottle neck in Greg’s business was finding more products. At one point he had a team of 8 VAs in the Philippines who would look at ideas, fill out a spreadsheet. This is when he created the Jungle Scout Chrome extension is the same as the VAs – instead of 30 minutes, it takes 2 seconds.
Greg was trying to scale fast, so with a list of 200 keywords, one person (VA) could only get through 20 a day.
What is Jungle Scout and how do you use it?
Two tools: Chrome extension and Web App. (Chrome is a free browser you can download)
Extension integrates into browser – look on Amazon, click on JS button – pop gives you the relevant data to make decisions on products or sales. Data like price, how much you nett after fees.
Web App: Web based software that runs on the Jungle Scout website. It has several features – the most popular is the product Dat abase. It’s a rebuild of Amazon’s catalogue for Sellers, rather than buyers (which is what Amazon.com is designed for), with filters with your criteria -for example:
Sales: over 300 a month; and under 50 reviews; priced over $20, under 1 lb weight” .
What are your criteria for product selection?
This is for the USA store but a variation would work in UK etc. For example for keyword “Glass cups”-
Demand: 3000 units a month of demand [on page 1 of search results]. If doing manually, add up all the sales of “glass cups” (eliminate irrelevant results).
That is a good number if you are aiming to sell 10 a day yourself (300 a month) – which is 10% of the total market. That’s easy to find but we want lower competition.
Competition: 1 or 2 sellers in top 5 listings with under 50 reviews. And in top 10 sellers, 3 or 4 listings with under 50 reviews. This tells you it’s not too mature a niche. IF competition has hundreds of reviews, you’ll find it hard to compete.
Big picture: it’s a small %age of all listings on Amazon – but there are 100s of Millions of products on Amazon so that’s a lot of items!
Price: $20 or more. The smaller the simpler the better- easier for storage etc.
These are just rules of thumb – it can be good if it’s a bit less demand but a bit Less competition.
Every time I found a product I liked using the Product tracker, it looked hyper competitive. How can I use the Chrome extension to find lower competition products?
The best tool is actually not the Extension, it’s best to use the Product Database on the Web App.
You can put in your criteria for products with under 50 reviews and min 3000 units sold a month.
You can do this with the Chrome Extension. Once you HAVE an idea, the Extension is the best tool to have.
But if you don’t already have product/ Keyword ideas, it’s not the best tool .
In every category it looks like it’s good to PL. What are the other criteria for selection?
If every opportunity looks good, your criteria for competition is too lax. There are tons of opportunities with high demand but they have a lot of competition. Look for something with under 50 reviews in some of those top spots – easy to do with the Extension.
Only add up the demand for relevant listing results. Eliminate irrelevant searches.
The Extension is for $90 or $150 (more features) one off costs
The Web App at the monthly $40 level is good for most people but goes up to $100 a month. There is a free trial – and you can find lots of products.
Are there plans to make the Web App available in the UK?
The Extension already works in the UK. The Web App will be built for UK in the near future.
But UK or Germany based sellers still use the Web App for the USA to get product ideas – you could then search in the UK store and verify that. A lot of the times you’ll find a good opportunity in the USA and it will be in the UK.
“There seem to be three schools of thought with product selection – 1. find & build a niche brand of related products so you can sell over and over to the same customers, 2. hunt for single superstars / hidden gems, 3. gut instinct. perhaps you find/invent a product you think would do great, or it’s selling in another venue and has no rep/history on amazon to give informed decisions.
Jungle Scout and tools like it seem to be targeted at product selection style 2 [Superstars], how can it best be used to help with styles 1[Niche] & 3 [Instinct], or indeed does Greg believe in these styles or have a different view entirely?”
For Greg, gut instinct is out because it’s risky- he likes to use the data. It might work for some people!
GM has about 3 dozen items – When Greg first started, he was advised to create a whole line of products to get better sales [cross sales]. Greg didn’t find that to be true. He did it start with but didn’t see increase in sales.
When people shop on Amazon, they are not looking for particular brand, they just want the best reviews at the best price. So now Greg just finds opportunities and sells them.
However, If you wanted to find products similar to your existing products, in the Web App, you could select the product category.
The marketplace has given feedback that “finding gems” has worked better than Niche market approach. Maybe in certain categories, brand Is more important; just not in Greg’s market.
People are searching for the item and then getting one of the top 3 depending on reviews and price.
How do you deal with the competition? Especially how do you avoid a price war?
Greg never competes on price – he always works on pictures, the listing; improvements to product. If his competitor lowers price, he doesn’t. When launching new products, get into area that isn’t too competitive. Then by the time competition comes in, secure the top spot with lots of reviews.
Lots of people think they are too late to the party. Not true. It’s still a great opportunity. Greg is still launching new products. BUT You just have to be good with product research. If you pick an item that’s in a very competitive niche, it’s very hard to get anywhere.
You can’t fix a product at the marketing stage if the product selection is wrong!
If sales volume is dropping, Instead of lowering your price, do some giveaways and keep sales rank and overall, it will make you more money.
BUT Product selection is so important that lots of people get hung up on it. How do get round the selection deadlock (Paralysis analysis)?
Use the criteria that Greg gave – it’s proven, including a case study
Once you’ve done lots of research, you will have a better feel for a particular market.
If in doubt, if you’re worried and just beginning, just choose even lower competition product even if you just sell say 5 a day. And or place an order for fewer units.
I know the Pro Extension will give extra info like FBA Fees, FBA Fulfillment category (eg oversize), net price after fees and so on. Is this available for Amazon UK?
Yes, it is!
How about .de (Germany) or other European marketplaces?
Not yet, but this summer (2016), it should be available.
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