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Doing product research for Amazon needs to be done carefully. Get yourself up and running with PL on Amazon with Stephen Somers.
How to do Product Research for Amazon (amazon.com figures)
PL Winner Percentage
6-7 out of 10 in Stephen’s case succeed.
Out of the 3, 1 sells slowly.
One is a loser. It will take 18 months to sell through.
Defining a winner
They define a double initial investment within 9 months
Even a product that is selling 1 unit a day.
BEST products
- Boring
- Established
- Sustainable
- Tangible – if you do a bonus item, it’s always physical (no ebooks or downloads).
- Start at a category level
- Then look at the top 100 products to get you started
Filter 1 avoid list
Click into products that don’t have reasons to avoid (checklist of 15)
- Sharp edges
- Hazardous
Look at generic keyword/search term eg “plastic shoebox”.
Look at what number of results does Amazon return eg 1 of 2000 results.
Typically they like to have sub-1000 results.
Filter 3 DS Amazon quick view
Shows you the BSR of different products scrolling down the page.
What BSRs are the products on the first page
Sub 30,000 BSR
They don’t bother with tools that estimate sales data.
They want real data from own sales.
If everything is 100, 500 BSR, they get nervous because the market is big.
When the Results are low and the BSR is low, they get excited (big demand, modest competition).
But if BSR is around 40,000, 200,000 not so exciting.
Sweet spot
Roughly 1200, 5000, 6000 BSR means…
- Decent demand
- Manageable competition.
Subcategories and related items
Do the same with subcategories and related items:
- Sponsored
- Also viewed
- Also bought
Then you find “hidden gem” products.
It does take time- but by using those filters…
Putting in a generic/short tail keyword
You start to see opportunity with bad listings.
“Too big” BSR cf Units sales
They used to sell a wholesale item (satellite box from Labgear) that was BSR 2 and literally hundreds of units a day sold.
Stephen considers a decent product – sells out in 6-9 months
Say it does £1000 in revenue per continent (US or EU), it’s still of interest!
That’s £30 a day!
It’s still making you £300 profit at 30%
It is better to build a business with 100 SKUs doing £1000 each month than one with 2 SKUs with the same revenue.
Rolling with changes
They follow Amazon’s TOS -one day the all caps etc. will get wiped out by Amazon.
Because selling lower competition products.
Conversion rates can be as high as 60%
Why?
- No fitting issues
- Don’t have to consider forever
- Not that much competition.
Odd Niches work
For example a hunting mount (like a moose’s head) – a member had 60% conversion rate
“Bacon bandages” – had something like 7,000 searches a month
Supplements
Yes, you can make outrageous money selling supplements.
But everyone is competing with you.
You have to bid against others for Amazon ads space.
Brand building
Their volume on Amazon is really high BUT had to build a massive brand off Amazon to start with.
Ryan has a hair-replacement company
Amazon is just a distribution platform
- Website building
- Traffic
MPSH aim: Boring works even better – “marketplace products”
Covers that go under the feet of a washing machine.
They do YouTube videos about this to be transparent
Example: stud finder – finding studs in the wall
Bought from the wholesaler at the time.
Listed poorly on Amazon
- Improved listing
Did NOTHING.
Then it suddenly took off
Stephen went back to the company asking for 2000 stud finders and company said they didn’t do them any more.
Developing expertise in
Robert will find 4-5 products in an hour now.
Get marketplace validation first
Yes, you need to create a brand, get a trademark etc.
But you can’t even get a trademark without trading!
You start with a “house brand name” – get it trademarked.
Then you put all the products under that brand.
Real high-end eCommerce is great when you know what you’re doing.
But it comes with lots to learn.
Get yourself up and running with PL on Amazon.
Get excited again – the fact you can trade in multiple countries.
Your goal is to amass as many products as you can.
Then you can start scaling your brand.
You’ve learned your skills
- Calculating P & L
- PPC costs etc.
Book: Nassim Nicholas Taleb: “Skin in the Game”
Taleb was an options trader who had some of his own money in the game and made himself “F…. You money”, retired and now writes books and lectures, essentially because he cares about it.
His simple contention is: having skin in the game means you make better decisions.
(And not having skin in the game leads to poorer decisions).
What Amazon does well
If Stephen had tried to do eCommerce with no knowledge, he would have failed.
Amazon takes care of a lot of things:
- Millions of customers
- Do all shipping via FBA in multiple countries
- Pick pack and ship
- Inbound customer service in many languages
- When someone clicks on your listing, Amazon retargets people on social platforms
- Include your product in newsletters
- Their SEO is unbeatable in most cases
- They bid on keywords on Adwords and Bing eg “plastic shoebox”
“Where is my item?”
Stephen used to answer 150 Customer Service tickets a day.
Everyone was“Where is my item?”
They didn’t KNOW!
Whereas Amazon does track this all.
Off Amazon eCommerce
A friend of Stephen sold a high-end high priced kitchen cabinets for $2000-3000
That’s not what Amazon is designed for.
The price is so high, so you need videos etc. etc.
The profit is higher, so you can afford to drive traffic to it.
If it is $20, you better have a backend!
You need more interesting products – kitsch/weird
Dollar Shave Club for example.
How to learn more from Stephen and Marketplace Superheroes
Free training
Redirect to an affiliate link (ask Stephen)
Including:
- the “Rule of 5” – the framework for products in multiple companies
- The research process, including the kind of products you shouldn’t be selling
- Why you don’t want to do warehousing yourself
@stephenjsomers
http://instagram.com/stephenjsomers
Watch my full interview with Stephen Somers
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