Starting an Amazon FBA business can feel overwhelming, especially when it comes to selecting the right product. Many beginners find themselves lost in the vast ocean of possibilities, wondering which items will bring them success and which ones might lead to disappointment. The product selection process requires careful analysis, research, and understanding of market dynamics that can make or break a new Amazon venture.
For those just beginning their Amazon FBA journey, having a structured approach to product research can mean the difference between success and failure. This guide breaks down the essential criteria successful sellers use to identify profitable products, helping new entrepreneurs navigate the complex landscape of Amazon marketplace with confidence.
Top 10 Checklist to Follow for Amazon FBA Product Research
Product research forms the cornerstone of any successful Amazon FBA business. Each element of this checklist has been proven crucial for long-term success in the marketplace. Let’s explore each criterion in detail to understand why they matter and how to evaluate them effectively.
High Demand
Product demand serves as the foundation of any successful Amazon FBA venture. When analyzing demand, sellers should look beyond simple monthly sales numbers and dig deeper into the market’s overall health. A healthy product typically sees consistent sales of at least 300 units per month across the top 10 listings, but this number alone doesn’t tell the whole story.
Sellers should examine sales trends over time using tools like Jungle Scout or Helium 10. These tools provide historical data that reveals whether demand is growing, stable, or declining. For instance, if examining the market for yoga blocks, one might discover that while the top seller moves 1,000 units monthly, the overall market shows steady growth with multiple sellers maintaining consistent 300+ unit sales months. This pattern indicates a healthy, sustainable market rather than one dominated by a single seller.
Sales Price
The optimal price range for Amazon FBA products typically falls between $15 and $50, but understanding the reasoning behind this range proves crucial. Products priced below $15 often struggle to generate sufficient profit after accounting for Amazon’s fees, shipping costs, and marketing expenses. Conversely, items priced above $50 frequently face longer sales cycles and increased customer scrutiny.
Consider a premium yoga mat priced at $35. This price point allows for manufacturing costs around $7-10, shipping costs of $3-4, and Amazon fees of approximately $5-6, leaving enough margin for marketing expenses and healthy profit. The price remains low enough for customers to make relatively quick purchasing decisions while high enough to support quality materials and construction.
Marketability
Marketability extends far beyond simple product features. Successful products solve specific problems or fulfill distinct needs in ways that can be clearly communicated through Amazon’s platform. This aspect involves understanding both the product’s core benefits and how to effectively convey them through listings.
Take, for example, a kitchen knife organizer. Beyond basic storage, a marketable product might feature magnetic strips to prevent dulling, adjustable compartments for different knife sizes, and child-safety locks. These features solve multiple common problems: knife maintenance, storage flexibility, and safety concerns. The product’s marketability lies not just in these features but in how effectively they can be demonstrated through product images, bullet points, and description copy.
Sales are Evenly Distributed
Market distribution patterns reveal crucial information about competition and market health. In a healthy market, sales should be distributed relatively evenly among the top sellers, indicating room for new entrants. When examining sales distribution, look beyond just the top few listings to understand the full market landscape.
For instance, in a market for silicone baking mats, a healthy distribution might show the top seller moving 1,200 units monthly, with the tenth-ranked seller still achieving 600-700 units. This pattern suggests that multiple sellers can succeed in the space. Conversely, if the top seller moves 3,000 units while the tenth seller barely manages 100, this indicates a potentially difficult market for new entrants.
High Search Volume
Search volume represents customer interest and market potential, but understanding how to interpret these numbers requires more nuance than simply looking at total searches. Successful sellers analyze both broad and specific search terms related to their potential product, creating a comprehensive picture of market demand.
For instance, a seller researching bamboo cutting boards might find the main keyword generates 50,000 monthly searches. However, diving deeper reveals related terms like “large bamboo cutting board with juice groove” (8,000 searches) and “organic bamboo cutting board with compartments” (6,000 searches). These specific searches often indicate buyer intent and highlight potential product features that could differentiate a new offering. The key lies in identifying search patterns that suggest not just interest, but purchasing intent.
Uniqueness
Product uniqueness in the Amazon marketplace doesn’t necessarily mean inventing something entirely new. Instead, it involves identifying existing product weaknesses and making meaningful improvements. This approach requires thorough analysis of customer reviews, questions, and complaints about current market offerings.
Consider a seller entering the market for garden pruning shears. After analyzing hundreds of reviews, they might discover common complaints about handle comfort during extended use, blade durability, and difficulty cutting at awkward angles. By addressing these specific issues – perhaps with ergonomic handle designs, premium steel blades, and a rotating head mechanism – they create a unique offering that solves real customer pain points while building on an established product concept.
Profitability
Profitability analysis must go beyond simple calculations of revenue minus costs. Successful sellers consider multiple cost layers and market factors that impact long-term profitability. The traditional advice of targeting 30% profit margins serves as a starting point, but understanding the complete financial picture requires deeper analysis.
Let’s break down a real-world example: Consider selling a premium pet brush at $29.99. The cost breakdown might look like this: Manufacturing cost: $4.50 Shipping to Amazon: $1.75 Amazon FBA fees: $8.50 PPC advertising cost per unit: $3.00 Packaging and inserts: $1.25 Returns and customer service: $0.75
This leaves approximately $10.24 in profit per unit. However, successful sellers also consider additional factors like seasonal pricing fluctuations, potential competition-driven price reductions, and the need for occasional promotions. A truly profitable product maintains healthy margins even when accounting for these variables.
Low Seasonality
Seasonal fluctuations can dramatically impact business stability, and understanding seasonality patterns requires analyzing multiple data points throughout the year. While some seasonality might be acceptable, successful sellers look for products that maintain consistent demand across multiple seasons.
Take, for example, a seller considering entering the market for reusable water bottles. By analyzing sales data across several years, they might notice only minor fluctuations between summer and winter months, with perhaps a 20-30% variation in sales. Compare this to beach toys, which might see 80-90% of their sales concentrated in just three months. The key lies in identifying products that can generate consistent revenue throughout the year, even if some seasonal peaks exist.
Avoid Patented Products
Patent avoidance requires more than a simple patent search. Successful sellers understand different types of patents (utility, design, and plant patents) and how they might affect product development. This knowledge helps prevent costly legal issues and guides product modification decisions.
For instance, when developing a new phone holder for cars, sellers must research not just exact matches but similar products and technologies. This includes examining patents for mounting mechanisms, adjustment features, and even specific design elements. Sometimes, what seems like a minor feature – such as a particular type of spring-loaded grip – might be protected by patents. Thorough patent research might reveal that while the basic concept is free to use, specific features require modification to avoid infringement.
Avoid Potential Restrictions
Understanding Amazon’s restrictions goes beyond checking the obvious prohibited items list. Successful sellers research category-specific requirements, seasonal restrictions, and potential future regulatory changes that might affect their product.
For example, a seller considering bamboo kitchenware must understand food contact material regulations, requirements for bamboo processing certifications, and potential restrictions on environmental claims. They should also consider shipping restrictions – certain types of finishes or treatments might classify the product as hazardous materials, complicating the fulfillment process.
Products You Should Avoid For Selling on Amazon
Understanding what products to avoid can be just as crucial as knowing what to sell. Let’s examine in detail why certain product categories present particular challenges for new sellers.
High Competition
Markets with intense competition require more than just competitive pricing to succeed. High-competition products often exist in markets where major brands have established strong customer loyalty and efficient operations over years or decades. These markets typically show several warning signs:
When examining a market for phone cases, for instance, a new seller might find thousands of listings, numerous established brands with high review counts, and aggressive pricing strategies. The top sellers often maintain razor-thin margins while investing heavily in advertising and brand building. Breaking into such markets requires significant capital, unique value propositions, and extensive marketing expertise – resources most new sellers lack.
Breakables and/or Electronics
Products prone to damage or malfunction present unique challenges that can quickly overwhelm new sellers. The issues extend beyond simple shipping damage to include customer service demands, return rates, and potential safety liabilities.
Consider bluetooth earbuds as an example. Beyond physical damage during shipping, sellers must deal with connectivity issues, battery problems, and compatibility questions. Customer service becomes technically complex, requiring detailed product knowledge and troubleshooting skills. Returns might reach 20% or higher, significantly impacting profitability. Additionally, electronic products often face strict safety certifications and regulatory requirements that add complexity and cost.
Grocery Items, Supplements, Health Products
These categories present multiple layers of complexity that new sellers often underestimate. Beyond basic Amazon restrictions, sellers must navigate various regulatory requirements, expiration date management, and potential liability issues.
For example, selling protein supplements requires understanding FDA regulations, maintaining proper storage conditions throughout the supply chain, managing batch numbers and expiration dates, and potentially obtaining various certifications (GMP, organic, etc.). Additionally, these products often face intense scrutiny from customers regarding ingredients, effectiveness, and safety claims. One adverse reaction or failed inspection could lead to account suspension or legal issues.
Trending Products
While trending products might seem attractive due to their rapid sales growth, they often present significant risks for new sellers. The challenges go beyond just timing the market correctly.
Consider the case of fidget spinners: During their peak, many sellers rushed to stock inventory, only to face rapidly declining prices as market saturation occurred. Similar patterns appear with many trending products – initial high demand drives up competition and production, leading to oversupply and price crashes. By the time new sellers enter the market, margins often have eroded significantly. Additionally, trending products frequently face quality issues as manufacturers rush production to meet demand, leading to higher return rates and customer complaints.
Conclusion
Successful Amazon FBA product selection requires a methodical approach combining thorough research, careful analysis, and strategic thinking. The process might seem overwhelming at first, but breaking it down into manageable steps makes it more approachable and increases the chances of success.
Understanding these criteria and avoiding common pitfalls positions new sellers for success in the competitive Amazon marketplace. Remember that while no product is perfect, finding one that satisfies most of these criteria significantly improves the chances of building a sustainable Amazon FBA business.