Why sell on Amazon? Let’s put it this way:
Imagine you put every US retail sale from the last 12 months into a single bucket. Only 14.3% of those sales happened online. Yes. The rest happened in traditional retail brick and mortar.
The explosion of online sales has economists scratching their heads, yet we are just beginning to witness the greatest shift of wealth in modern history: from the physical store to the online store.
Some will take advantage of this. Others will ignore it and remain the consumer, not realizing that almost every time they buy a product on Amazon it’s making an Amazon seller wealthier.
Today, we at Just One Dime with Seth Kniep will walk you through four steps you can take right now to find a profitable product to sell on Amazon.
The method we’re about to show you are the lessons from 10’s of thousands of launched products—both successes and failures—all served up to show you the very best tactics for succeeding as an Amazon FBA seller.
Step 1: Choose a product niche where you can obsess over the customer experience.
Shoppers don’t buy products. They buy experiences. Understanding this can be the difference between your Amazon listing showing up on page 779 and its ranking in the top three pages of search results, selling dozens of times a day.
How do you pull this off? Build your product around your customer’s core desire.
When customers buy Nike, they aren’t buying shoes; they are buying athleticism. When customers buy Prada, they are buying sophistication.
The greatest commercials of all time say almost nothing about the product, and instead focus on the experience. That’s why Nike commercials talk 10x more about athletics than they do the shoes on your feet.
When you understand the product niche, you understand your future customer. When you understand your future customer, you know what product to choose.
The product is not the end goal. The customer is. When you build a product that grows from the soil of your future customer’s desires and needs, you won’t be growing ulcers wondering if anyone will buy your product. Instead you will be obsessing about making their experience absolutely ecstatic. Applying this single strategy can put you ahead of over half of today’s Amazon sellers who start with the product instead of with the customer.
Every single Amazon FBA store that Just One Dime builds for investors begins with this obsession.
So how do you do this? Read the critical reviews of competitor products on Amazon. Critical reviews will give you a wealth of priceless market data that Fortune 500 companies pay hundreds of millions for annually. Critical reviews are an ocean of opportunity because customers write reviews when they care. And what customers care about is what motivates them to spend money.
Step 2: Choose a product niche with high demand.
Many Amazon sellers make the mistake of looking to keyword search volume as the strongest indicator of demand for a product. It’s not. Sales are. Money talks. Searches matter but sales are king.
How do you do this?
First, type in your main product keyword on Amazon.com. Look at the top 10 ranking listings on the search results page. (Filter out Amazon listings that say “sponsored,” as these are advertisements, not organic search results).
Second, see if at least three of those top ten competitors are pulling in $5,000+ per month. If so, you know your market has demand. Many ask, “What’s so magical about the number $5,000?” Nothing. It’s just a starting point. If you want your minimum to be $10,000 in revenue per month for at least five of the top ten competitors, that’s perfectly fine. A stronger market means more competition but also more opportunity to make money.
The key is not finding the magical number of minimum sales but understanding the concept: sales = demand.
How do you find this data? We recommend a product research software tool built by Amazon sellers for Amazon sellers called Niche Hunter.
Just One Dime and Seth Kniep developed Niche Hunter to help you find the demand, ease of entry, and differentiation opportunity for the top ten ranking products for any keyword you enter.
Step 3: Choose a product niche where shoppers accept low review counts.
At least three of your top ten competitors should have fewer than 200 reviews. Under 100 is even better. Why? Because when you create a brand new listing, your product will have zero reviews.
When three or more of the top ten ranking products have a low review count, that tells you shoppers will still buy these products even when a listing has a small number of reviews. This means that your niche-market will be “easier to enter” than other markets.
Step 4: Choose a product niche with differentiation opportunity.
Seth Kniep often says, “Your product must offer value that no one else offers.”
If you launch a product on Amazon that looks just like everyone else’s, why would we buy your product? Your product must do something uniquely different than the competition. Fix a problem no one else is fixing. If garden tools create blisters, then come out with softer grips for your garden tools. If coffee mugs burn customer’s hands when coming out of the microwave, then invent a coffee mug that is heat resistant while keeping the cup’s contents piping hot.
Pro tip: If you make your differentiation visual, you can show off the differentiation in your featured photo which will increase your conversion massively. A differentiation so vague it has to be explained in many words is likely not a good differentiation at all.
Here are four practical ways you can differentiate your product:
- Improve the visual quality of your product.
- Bundle items that are frequently bought together.
- Build a new solution to a shopper’s problem.
- Solve a problem of an already existing product.
To get more help like this from Seth Kniep and Just One Dime, visit Just One Dime.
Authored by Seth Kniep