Amazon Product Research Tips & Insights 2022

As competition on Amazon increases, conducting thorough product research is essential for success. Every Amazon seller needs to understand the significance of Amazon product research to make informed decisions about what products to sell, how to price them, and how to position them against competitors. Sellers who invest time in researching the market can increase their chances of building a profitable and sustainable Amazon business.

Product research for Amazon FBA is one of the most important steps in the process of launching a product. Sellers need to have a comprehensive understanding of their target audience, the competition, and potential trends. Without this research, sellers might waste time and resources on products that do not perform well. In this article, we’ll delve into effective strategies for Amazon product research, the tools you can use, and tips to avoid common pitfalls.

By the end of this guide, you’ll be equipped with actionable insights to improve your Amazon product research and increase the chances of success for your Amazon business.

What Is Amazon Product Research?

At its core, Amazon product research refers to the process of identifying and evaluating potential products to sell on the Amazon marketplace. It is a multi-step process that includes understanding market trends, evaluating the competition, and analyzing the costs associated with launching a new product. The goal is to find products with high demand, low competition, and strong profit margins.

Many new sellers assume that Amazon product research is simply about finding products that are currently popular. However, advanced Amazon product research goes far beyond this. Sellers must evaluate long-term trends, analyze customer reviews, and estimate the profitability of the products they plan to sell.

Product research on Amazon involves several critical steps, including:

• Identifying product categories with high demand and low competition.
• Evaluating the potential profit margin of the product.
• Analyzing the target market and potential customer base.
• Assessing the level of competition and understanding how you can differentiate your product.
• Determining the sourcing costs and shipping fees to calculate the total costs of selling the product on Amazon.

This comprehensive approach ensures that sellers do not rush into launching a product that may not be profitable in the long run. Instead, they take a data-driven approach to selecting products that align with market demand and offer the potential for sustained success.

How to Do Amazon Product Research – Basic Guide for Beginners

For those new to selling on Amazon, understanding how to effectively conduct Amazon product research can seem overwhelming. However, by breaking it down into simple steps, any seller can perform thorough research. Below are some fundamental methods for conducting effective product research on Amazon.

Check Performance Data

Amazon provides sellers with valuable data that can help them assess product performance. One of the first places to look is the Amazon Best Sellers Rank (BSR). The BSR is a good indicator of how well a product is selling in its category. Products with a lower BSR rank are performing well, indicating high customer demand.

In addition to BSR, sellers should look at the Frequently Bought Together section on product listings. This can give insights into which products customers tend to purchase together, potentially opening up cross-selling opportunities or ideas for complementary products to add to your inventory.

By frequently checking performance data, sellers can stay informed about market shifts and identify emerging trends.

Research Competitor’s Listing

Another essential step in Amazon product research is evaluating competitors’ listings. By analyzing competitors’ best-selling items and customer reviews, sellers can identify gaps in the market and opportunities to improve upon existing products.

When reviewing competitors’ listings, pay close attention to:

• Product titles: How do they optimize for keywords?
• Bullet points: What features do they highlight?
• Images: Are the product images high-quality and do they showcase the product effectively?
• Customer reviews: What are the common complaints and praises from customers? This information is critical to improving your own product offering.

Competitors’ advertising strategies should also be monitored. Check which products are being promoted through Amazon Sponsored Products or Sponsored Brands. Typically, sellers allocate more budget to advertise their top-performing products, so this is a great indicator of what is working well.

Utilize Product Research Tools

There are numerous product research tools for Amazon that can help streamline the research process. Some popular options include:

• Helium 10: This tool allows you to perform comprehensive keyword research, track your competitors, and identify trends.
• Jungle Scout: Another powerful tool, Jungle Scout helps sellers find profitable products by analyzing sales data, market trends, and competitors’ pricing strategies.
• Black Box Amazon Product Research: This tool enables you to filter through thousands of products to find ones that meet specific criteria such as sales volume, price, and competition level.

Using an Amazon product research tool can save you hours of manual work and provide you with in-depth insights into your chosen market. These tools are designed to help sellers uncover new opportunities and make data-driven decisions.

Amazon FBA Product Research Essentials | Things to Check

When conducting Amazon FBA product research, there are several key elements that sellers must consider to ensure they are choosing the right products to sell. Below are the most critical factors to check during your research process.

Sales Performance

One of the most important indicators of a product’s potential success is its sales performance. Products that are consistently selling well are likely to continue to do so in the future. You can use product research tools Amazon provides, like the Best Sellers list, to identify high-performing products.

Product Price

The price of a product plays a significant role in determining its profitability. Many successful Amazon sellers focus on products that are priced between $15 and $30. This price range tends to attract more buyers and offers a balance between affordability and profit potential. You can use the Amazon FBA calculator to estimate potential profit based on product price and associated fees.

Profit Margin

Profit margin is the percentage of sales revenue that you get to keep after all costs have been deducted. It’s not enough to just generate sales; the goal is to generate profitable sales. To calculate the profit margin, use this formula:

Profit Margin = (Net Income / Revenue) x 100

A higher profit margin means more profitability, and sellers should aim for products that offer a strong return on investment. You can use pricing tools like Seller Snap to automate pricing strategies and increase your chances of maintaining a good profit margin.For Amazon inventory management needs, sellers can also use inventory management software.

Product Seasonality

Product seasonality is another critical factor to consider when conducting Amazon product research. Like brick and mortar stores, demand for Amazon products varies depending on the season. 

It will help if you determine whether a potential inventory item will be in demand the whole year long or perhaps only be appealing to Amazon shoppers on specific dates or holiday seasons. However, although seasonal items can be profitable during the right season, you should refrain from building your Amazon business around these inventory items.

Product Size and Weight

Small and lightweight items are easier and cheaper to ship, making them a better choice for new sellers who want to minimize shipping costs. Products that are bulky or heavy can increase your FBA fees, so it’s crucial to consider the size and weight of a product before deciding to sell it.

Product Durability

The durability of a product is another critical factor in product research for Amazon FBA. Fragile or easily breakable items are more likely to result in returns, which can hurt your profit margin. It’s best to avoid items that are delicate or have complex parts that may break during shipping.

Marketplace Competitors

The level of competition in your chosen category will significantly impact your success. Look for products that have moderate competition, meaning there’s demand for the product, but it’s not overly saturated with sellers. Highly competitive categories can make it difficult for new sellers to gain traction.

Trends

Understanding current and emerging trends is crucial for long-term success. Tools like Google Trends and Amazon’s own Best Sellers list can help you identify trending products and make informed decisions about what to sell. Keep an eye on changes in customer preferences and adjust your product offerings accordingly.

Product Restrictions

Some products are restricted on Amazon, meaning they cannot be sold by third-party sellers unless they meet certain requirements. It’s important to familiarize yourself with Amazon’s product restrictions before investing in a new product. Failing to comply with these rules could result in the suspension of your seller account.

Brand Gating

In addition to product restrictions, Amazon also implements brand gating, which prevents unauthorized sellers from selling certain brands. If you’re considering selling branded products, make sure the brand is not gated before adding it to your inventory.

Potential Liability

Products that are consumable, such as food or beauty products, carry higher liability risks due to safety concerns. As a new seller, it’s best to avoid products with high liability risks to minimize potential legal issues.

Product Complexity

Products that are complex to use, assemble, or ship can create customer dissatisfaction. Avoid selling items that have too many moving parts or require extensive customer support.

Reviews

Customer reviews are an essential part of your Amazon product research process. Look for products with mostly positive reviews but some areas for improvement. This will give you the opportunity to enhance the product and differentiate it from competitors.

Amazon Product Research Tips – Here’s What Sellers Should Not Do

To ensure your Amazon product research is effective, there are certain mistakes you should avoid. Below are some common pitfalls that can hinder your success:

Narrow Niche

While focusing on a specific niche can be beneficial, choosing a niche that is too narrow may limit your growth potential. Avoid niches with too few customers or minimal room for expansion.

Neglecting Amazon Seller Fees

Many new sellers overlook Amazon seller fees when calculating their profit margins. Make sure to factor in all fees, including referral fees, FBA fees, and shipping costs, to ensure you are making a profit.

Overlooking Product Improvements

Don’t assume that the product you are selling is perfect. Look for ways to improve upon existing products by adding unique features or better packaging. This can help you stand out from competitors.

Neglecting Legal Requirements

In addition to Amazon’s restrictions, you must also comply with local laws and regulations. Make sure the products you sell meet all legal requirements, including safety standards and labeling regulations.

Amazon Product Hunting – Categories Sellers Should Avoid

If you are new to Amazon or online selling in general, there are specific categories that you may find challenging. Here are some product categories you should avoid when selling on Amazon.

Clothing, Shoes, Jewelry, Handbags Category: Items under such categories are dominated by huge brands, so it is not easy to penetrate consumers. Furthermore, Amazon returns frequently occur under the said categories because of the products’ multiple sizes, types, and color variations.

Categories Requiring Approval: Avoid complicated categories and products if you wish to start your Amazon business smoothly. These categories and products that are deemed too difficult to manage typically require Amazon approval, which includes the following:

• Fine Art
• Jewelry
• Watches
• Made in Italy
• Music & DVD
• Postage stamps
• Collectible Coins
• Sports Collectibles
• Video, DVD, & Blu-ray
• Streaming Media Players
• Join Amazon Subscription Boxes
• Holiday Selling Requirements in Toys & Games
• Sony PlayStation Requirements in Video Games

Popular Selling Methods Under Amazon FBA Program

There are two main methods for selling on Amazon: reselling and private label. Both approaches have their advantages and disadvantages.

Reselling

Reselling involves purchasing products from major retailers at a discount and selling them on Amazon for a profit. This method is relatively simple and does not require product development or branding.

Private Label

Private labeling involves purchasing generic products and branding them as your own. This method allows sellers to create a unique brand and differentiate themselves from competitors.

Why Sellers Prefer One Over the Other

Many sellers prefer reselling because it is a quicker and less expensive way to start selling on Amazon. However, private labeling offers more control over the brand and product, allowing for greater long-term growth potential.

Fundamental Tasks for Success

While Amazon product research is essential, it is not the only task necessary for success. Sellers should also focus on:

• Listing optimization to improve product visibility.
• Inventory management to avoid stockouts or overstocking.
• Repricing strategies to stay competitive in the marketplace.
• Advertising management to drive traffic to their listings.

However, product research alone is not enough to improve the performance of your Amazon business. Together with Amazon product research, it would be best if you also accomplish other crucial aspects of the Amazon business, including listing optimization, inventory management, Amazon repricing for competitive prices, and advertising management.For expert guidance on all aspects of your Amazon business, visit Profit Whales or reach out to our team via Contact Us page.

FAQ

How long does Amazon product research typically take?

The time required for Amazon product research varies depending on the complexity of the product and the market. On average, sellers spend anywhere from a few hours to several weeks researching products.

What are the common mistakes to avoid during Amazon product research?

Common mistakes include choosing an overly competitive niche, neglecting Amazon seller fees, and failing to account for legal requirements.

How does Amazon’s algorithm influence product research and listing success?

Amazon’s algorithm prioritizes products with strong sales performance, good reviews, and optimized listings. Sellers who conduct thorough Amazon product keyword research and optimize their listings are more likely to achieve higher rankings.

What is the best way to validate product ideas before launching them on Amazon?

Using Amazon product research tools like Jungle Scout or Helium 10 is a great way to validate product ideas. These tools can help you assess market demand, competition, and profitability.

What are the risks of selling seasonal products on Amazon?

The primary risk of selling seasonal products is that demand fluctuates throughout the year. Sellers may experience slower sales outside of peak seasons, which can lead to excess inventory and reduced cash flow.