Amazon’s meteoric rise has created a gold rush, with thousands of entrepreneurs eager to stake their claim. You want a piece of the action, too. But with millions of products sold on Amazon, it’s not as simple as picking any item and watching the sales roll in. Big sellers with deep pockets dominate significant chunks of the marketplace. To stand out, you need to be clever in selecting winning products.
It’s all about finding the right balance – a product with proven demand but not so much competition that you get crowded out.
This article will explain the concept of product research and how it can help find just that. We’ll also provide actionable tactics to help you identify profitable niches and products in 2024.
Why is it Important to do Product Research?
Product research for Amazon FBA is all about risk management. You have two things to invest in your ecommerce business: your precious time and hard-earned money. If you pick a product that doesn’t sell well, you could lose both.
What if you order 5000 units expecting red-hot sales, but the product bombs instead? Now you’re stuck with a garage full of worthless merch. Years of profit piled up and collecting dust. Or maybe you spent months building the perfect lead generation funnel and driving traffic to it but made no sales. Your efforts were in vain because you didn’t first confirm market demand.
And it’s not just about whether a product sells or not. It may sell well across Amazon already. The problem is if all the established sellers got there first. They now dominate the listings with thousands of reviews and great margins from bulk purchasing power, leaving you in an impossible game of catch-up.
In other words, doing your product research homework sets you up for success. You select winners, avoid landmines, and align with the Amazon algorithm’s preference for the next hot new thing.
What Is A Profitable Amazon Product?
So, what exactly should you be on the hunt for? What does a profitable Amazon product look like?
At its core, a “profitable product” means that it brings in more money than it costs to source and sell. Naturally, you need to look at the cost of goods sold (COGS) versus profit margin.
But that’s not all. Our definition of profitability goes beyond the basic definition. Consistent demand and relatively low competition are also factors.
Consistent Demand
The first factor only makes sense. It’s the fundamental law of supply and demand. If nobody needs your product, it simply won’t sell, and that incredible margin will be meaningless.
The “consistent” part of “consistent demand” can mean different things to different people. Some sellers are after hot trends. Fidget spinners skyrocketed and then crashed, yet people still made money from them.
Other business owners want to build a long-lasting brand around their products. In that case, they should think about how long the demand will last. Will people still want this product 6 months from now? A year? 5 years? It depends on the type of product. Something people will always need, like socks, will have more consistent demand than a fad item.
Both approaches have merit.
Low Competition
Low competition is relative in Amazon’s massive marketplace. Every product that people keep buying will have some competition. The two go hand in hand. But there’s a difference between high competition and relatively low competition.
We call markets “saturated” when there are tons of listings and reviews on the first page, all with great sales. These are usually controlled by top players who can offer the best prices because they buy in large quantities.
Also, some products have competition you can’t really beat, either because they have special deals with the maker or they’re made by Amazon itself. It’s best to stay away from these.
5 Amazon Product Research Tactics You Need in 2024
Now, let’s explore actionable techniques you can try during your Amazon product analysis. You can use these tips in any order, and you can mix and match them to get a clearer picture. These tactics will help you figure out if a product is profitable based on what we learned earlier.
Pro Tip: Amazon seller product research requires data-driven decisions, not gut feelings. Resist choosing products just because you “love” them. The data indicates what sells, not personal preference.
1. Take a Peek at the Amazon Best Sellers Lists
The Best Sellers list is the obvious go-to starting point when researching winning products. After all, it neatly packages the hottest sellers across all categories right at your fingertips. Why not begin your search where Amazon aggregates the proven winners?
To find it, start from Amazon’s home page search bar. Scroll down to the navigation bar and look toward the left side, then click “Best Sellers.” This brings you to the Best Sellers hub.
Here, you’ll see yet another menu with useful options to click through:
Best Sellers:
This shows the overall highest volume products across all of Amazon. For instance, in the broad “Home & Kitchen” section, you may see everything from stand mixers to sheets to mattresses as the category-wide best sellers.
The issue is these macro categories encompass tons of products, so competition is fierce. We’ll soon discuss ways to niche down, but for now, scan the best sellers for initial ideas.
Hot New Releases
New Releases are also selling well, although not always as much as the best-seller list.
What’s good about this section is that they are newer products, meaning they recently saw a jump in demand. You might be able to cash in on them with less competition if you move quickly.
Movers & Shakers
Movers & Shakers similarly tracks fast rising products in the past 24 hours. But the difference is these aren’t necessarily newly launched items – these are existing products experiencing a sharp uptick in sales velocity.
This is useful for timing your product launches. For example, when approaching Christmas, you may suddenly see Christmas lights and gift wrap making the Movers & Shakers list. That signals consumers are actively shopping for these seasonal items.
Most Wished For
This one is pretty self-explanatory. As you know, Amazon has a wishlist feature where users can save a product for later. They can also share their wishlist with others for gift ideas. The Most Wished For list indicates consumer interest – so people clearly want these items.
One thing to think about is why they didn’t buy it yet. Maybe there’s something you could do better that would make people add it to their cart instead of their wishlist.
Most Gifted
The Gift Ideas report shows the all-star products that get sent as gifts most frequently on Amazon.
Gifts represent a compelling market because customers often spend more freely when buying for others rather than themselves. Amazon’s gifting occasion feature makes sending presents easier than ever.
Scan Most Gifted to uncover what people commonly give as gifts, even if those items aren’t stereotypical gifts like flowers or jewelry. Then, consider how your own products could be positioned or marketed as ideal gifts for birthdays, holidays, weddings, graduations, and more.
2. Niche Down Based on Your Target Audience
You can’t be everything to everyone, especially if you’re working with a limited budget. Instead, niche down into a tighter category that big brands ignore. For example, look at white tank tops in the Clothing Best Sellers. Brands like Gildan and Amazon Essentials are at the top of the list. If we’re honest, you probably won’t outsell them because you can’t match their brand recognition and quality/price ratio.
That means even if white tank tops are in very high demand, they won’t be a profitable product for you.
So niche down. Focus on a smaller, more specific part of a bigger market. Think about what your target audience wants, ideally using your brand analytics. Who are you selling to? What do they need?
For example, new moms represent an underserved niche. Provide value by specially designing nursing-friendly tank tops.
To niche down within Amazon’s site architecture, use the left navigation bar on the Best Sellers page. Click into subcategories to see the most popular items specifically within that niche. You can go many levels deep into subcategories to find promising niche opportunities.
3. Look at Google Trends
The only search engine that can rival Amazon in terms of insight is Google. After identifying a promising product idea on Amazon, cross-reference it on Google Trends. Here, you can enter relevant keywords to get an idea of how many people are searching for it.
Google assigns a 0 to 100 relative popularity score. It doesn’t show absolute numbers of searches but instead allows you to benchmark the interest for one term against others.
For instance, after researching bed sheets on Amazon, you might compare search trends for terms like “silk sheets” vs “flannel sheets” vs “Egyptian cotton sheets.” The higher score indicates which keyword sees more consistent interest over time.
You can also set up alerts so that you instantly get notifications about trending or popular topics.
4. Vist AliExpress and Ebay for Inspiration
While Amazon obviously shows what sells best in their particular marketplace, expanding your view to international e-commerce platforms provides a unique perspective.
Alibaba’s AliExpress and eBay serve as bellwethers for growing consumer demand out of China and across the world.
AliExpress
AliExpress is probably where a lot of the products you see on Amazon come from.
So, if you see something start selling well on AliExpress, chances are you’ll see it popping up on Amazon’s best-selling list soon enough.
You can go on the Choice list or New and look at the number of orders and reviews. If you choose a category, it will also show you the best-selling items first.
Then, you can double-check with trends or Amazon to see how much demand there is. That’s what you have to be careful with here. AliExpress has all types of manufactured products, some of which are in no demand at all.
eBay
Some call eBay the little sister of Amazon. Typically popular products on one platform resonate on the other too. So studying eBay’s best sellers provides early signals around rising consumer demand.
Maybe something is hot on eBay but hasn’t made its way to Amazon yet. You can take advantage of that. The demand has been proven, and competition is still low. And don’t stop there. Any marketplace can give you ideas about what’s selling well: Etsy, Walmart, and more!
5. Use AI-Powered Product Research Tools
In a perfect world with unlimited time, manually researching products across Amazon categories, Google Trends, AliExpress, and eBay seems feasible.
Researching, taking notes, comparing, evaluating, and making decisions can take all of your time and energy. Thankfully, technology can automate much of this heavy lifting for you. AI-powered product research tools now exist for that very purpose.
Instead of digging endlessly for needles in a haystack, these machine learning algorithms do the grunt work and surface only the most viable products for you to evaluate. They rapidly filter big data into relevant, actionable, money-making insights.
You can get a detailed analysis of a single or multiple products and receive all the information you need to decide if it’s worth a shot.
AI can also look for trends automatically. You can’t keep track of hundreds of products all the time looking for patterns in sales, but AI can, and it will alert you when it finds something interesting.
Product Criteria for Amazon Product Research
The tactics we talked about are just the first step. After that, you need to analyze what you’ve found. So, what should you look at when you have a potential product in front of you? The Amazon product research criteria will depend on the product but usually revolve around the following:
- Monthly Sales: Monthly sales give you an idea of how big the market is for a particular product and whether there’s space for you. Another thing to look at is sales velocity, so you can see if the product is consistently selling well or if it’s only a temporary trend.
- Ranking History: Study ranking patterns across months and years. A steady high ranking signals enduring broad appeal.
- Price Sensitivity: When you enter the market, there are many pricing strategies you can choose from. You could offer more value for a higher price, offer less for a lower price, or meet in the middle. Some products tolerate variable pricing well. Others see sales plummet from even tiny price hikes. Understand flexibility.
- User Reviews: Reviews indicate buyer satisfaction levels and reveal desired product improvements. Address those gaps in your version.
- Costs: Carefully calculate all costs – materials, manufacturing, storage, shipping, etc. Confirm you can price profitably.
Final Thoughts
Product research holds the key to ecommerce success. Lackluster demand or excessive competition spells doom for any product. But choose wisely in a promising niche, and the rewards can prove tremendous.
We’ve learned how to do product research for Amazon, what makes a product profitable, and five key tactics to find great products to sell. We also looked at important criteria to consider when evaluating potential products.
For easy automated product research, try Algopix. Our AI-powered engine assesses demand, competition, trends, and more across 2B+ products. Optimize your 2024 product selection and join the Amazon gold rush!
