FBA How-To, Part 2: Selecting a Product

September 10, 2019    fba howto side projects product selection

I’m finally going to continue my series on Amazon FBA private-labeling, after a 2-year (!) wait. In this installment I discuss a strategy for choosing what product you’d like to sell. I do want to mention that this is not the only possible strategy, and I’m sure there are others who have found success with FBA taking completely different approaches to the problem.

Goal

The object of this exercise is to go from having zero idea about what products you want to sell, to having a candidate list of at least several (and hopefully many) products that are potentially a good fit. You absolutely do not want to commit to a single product at this stage, because you have several more steps to go through before determining whether any particular product is going to work (more on those in upcoming installments of this series).

Definitions

First, bear with me while I define a few terms that I’m going to use in this post:

BSR (Best Sellers Rank) is the sales rank of a product in its given top-level category. For example, headphones are typically categorized in Amazon’s “Electronics” top-level category. A particular pair of headphones with a BSR of 123 would be the 123rd best selling item overall in the Electronics category.

Competition describes the other sellers on Amazon who are selling identical or similar products to the one you’re researching.

Demand describes the number of potential buyers of your product who are seeking it out on Amazon.

Private Label is what we call the process of taking a generic product (typically manufactured overseas), and making it your own via branding, customization, and adding value to the product via free ebooks, videos, product accessories, etc. A great Private Label product will have some combination of all three techniques. The idea is that you want your product to be unique to your brand and difficult for a competitor to clone.

Initial Product List

You’re going to start by making a spreadsheet, text document, or whatever works best for you for keeping a list of the products you’re researching. You can use with handwritten/paper notes when doing this initial list, but you’re going to want to make it electronic at some point in the process for ease of editing and annotating. I chose to start with a spreadsheet, but do whatever works for you.

Now, stop. Don’t go to Amazon just yet. Take 10-15 minutes and seed this list with product ideas. If you’re drawing a blank, take a walk around your house or outside, or even just look around you. I guarantee there are dozens of potential product ideas in your immediate vicinity right now. For example, as I write this post in my office, here are some things within a few feet of me:

  • Over-ear headphones
  • Monitor shelf
  • Pen holder
  • Tape dispenser
  • Laptop stand
  • Ethernet cable
  • Wooden 4x6 picture frame
  • Three-ring binder
  • Coaster

Try not to think too much about potential sales, competition, etc just yet – the more ideas you can get down, the better. We’ll whittle them down later. Stop when you have at least 20 ideas. More than that would be great!

Once you have your list, your first goal will be to eliminate non-viable product ideas as quickly as possible. I went through a multi-step process to do this which I’ll attempt to go through next.

Product Elimination, Part 1

I know you’re itching to go search for all your ideas on Amazon, but there’s one more thing I recommend doing. Make a first pass through your list to eliminate some ideas right off the bat:

  1. Is your product some kind of electronic item, and/or does it contain a battery? You’re going to have additional considerations down the road regarding shipping and storage of this item, and likely a higher-than-average defect rate from your manufacturer. I don’t recommend starting your FBA journey with an item like this. Strike it from your list.
  2. When you think about the average selling price of your item, is it below $10? If so, unless you can easily sell a multi-item bundle for more than $10, I’d recommend striking it from your list. Given FBA fees, the margins on a cheaper item like this will be slim and you’re better off waiting until you know FBA selling in and out before trying to tackle it.
  3. Similarly, is the average selling price of your item relatively high (say, over $100)? If so, you’re almost certainly going to face lower than average demand simply due to the high price. High-priced items are a territory where experienced sellers have made a lot of money, but I don’t recommend starting out with one. Once again, strike it from your list.

Now you have a list of reasonably-priced, non-electronic items to begin with. Do yourself a favor and don’t be married to any particular idea on the list. You will be eliminating a lot of ideas in the next step.

Product Elimination, Part 2

OK! Now go to Amazon. Start with the first idea in your list and search for it. You’re going to get a page that looks like this:

Amazon results for monitor stand

Here, I’ve searched for “monitor stand” and gotten a fairly typical-looking Amazon search results page back.

For ease of product comparison, make sure you disregard the “Sponsored” listings that typically appear near the top of the search results. I’ll have a lot more to say about sponsored listings in a later installment, but these are products whose sellers have paid to appear at the top of the list. We want to start by looking only at the rest of the list, called the “organic” listings.

Keeping in the spirit of eliminating ideas as quickly as possible, you want to make a quick decision about whether this particular product warrants further research. Here are some red flags which might cause me to move on to the next product in my list:

  • Zero or very few products listed at all: this means either you’ve stumbled onto a goldmine, or there’s close to zero demand for your product. It is incredibly likely that it’s the latter. Move on.
  • Many products listed, all of which have a lot of reviews (500-1000+): this is likely a high-demand item with a lot of competition. It’s going to take a lot of work to get this item to appear on the first page of search results for this product. Maybe a good target for your second or later product, but not right now. Next.
  • Listings dominated by a brand with lots of name recognition: you are going to have a hard time ranking above the name brand item. If there are only a couple of name-brand items, it’s possible you could do alright by ranking 3rd+ on the page, but you will likely never rank above the name-brand item. Better off staying away from these types of items at first. Note: I made the mistake of picking a product that fell into this category for my first product. Learn from my mistake!

An ideal product will have a balance of some competition (but not too much), and as much demand as possible. I doubt there are many product ideas left that have very high demand but very low competition, but it’s possible they’re out there.

Scrolling through my results for “monitor stand,” I would probably eliminate this idea from my list as there are many items on the page with hundreds or thousands of good reviews.

Hopefully, after making this second pass through your ideas, you still have 3+ candidate products left. Great! That was the goal of this process! If not, go back to your list, come up with a set of new ideas, and start the process over. You can also take any of your eliminated ideas, but make them more specific and try again. For example, searching for “coasters” may have given you a search results page with tons of products that look like tough competition, but maybe “wooden coasters” is less competitive. Treat each search results page as a separate product idea, even if it’s related to another one you’ve already looked at.

Now, go back to the search results pages for each of the product ideas that are still in the running. Click on the first non-sponsored product, and find the “Product information” section. Look for the BSR (Best Sellers Rank). You’re looking for a product with a good BSR (generally speaking, somewhere between 1 and roughly 200). If the product has a good BSR, star it in your list; this will be a high priority product to research. Does the product have a BSR in the tens of thousands (10,000 or greater)? You might want to consider eliminating it from your list as the demand is likely not high enough.

Conclusion

Now you have a short list of product ideas which have passed your initial tests for viability. In the next installment of this series, I will discuss the other (equally important) side of product research: finding suppliers which will be able to manufacture and sell you your product.

Tools

Finally, here are a few tools that helped me immensely with the process that I’ve outlined here:

The Amazing Seller Podcast

TAS by Scott Voelker is a podcast that I listened to as I was starting the process of choosing my FBA product. Scott is super enthusiastic and offers some good advice for every step of the FBA private label process. Disclaimer: the first few dozen episodes probably contain some advice that is quite outdated and potentially against Amazon policy at this point, which if put into practice could cause your account to get shut down. When in doubt, check with someone who has done this before. Account bans are no fun!

Jungle Scout

Jungle Scout is a great tool for researching products. It consists of a browser extension and web-based app that make it incredibly easy to see competition levels, demand, and BSRs for any product you’re researching. I’ll probably do a separate article just about this tool at a later date.

MerchantWords

MerchantWords is a tool for assessing demand of your products. You can research particular keywords and see how many people are searching for those keywords on Amazon. Jungle Scout also contains some of this information, but MerchantWords has a better data set, in my opinion.



Have you used any other tools that you enjoy, or do you have any other tips for selecing a private-label product? Have a question about this article or about the FBA process in general? Shoot me an email or reach out on Mastodon!