Amazon Product Research: How to Do, Best Tools, Checklist
Amazon Product Research: How to Do, Best Tools, Checklist
One of the most challenging parts of selling on Amazon is finding the right product to sell. With the sheer size of Amazon's catalog, there is a nearly endless supply of potential products. As a result, it can be hard to know where to begin.
Table of contents
- Product Research Definition and Purposes
- Ways to Research Products
- Product Research for Different Selling Strategies
- Helpful AMZScout Courses and Resources
This guide will simplify the process by teaching you how to do product research to find profitable products to sell on Amazon.
Product Research Definition and Purposes
Product research is the process of analyzing and validating the profitable potential for a particular item. The purpose of the process is for the researcher to gain an accurate idea of how successful selling a particular item can be — before you begin selling it.
After you conduct product research, you will understand:
The total demand and size of the market for a product
How competitive a product is and who the main competitors are
How interest in the product is changing over time
How much it will cost to source the product
How much you can get from selling the product
Ways to Research Products
There are several different approaches you can take to find profitable products to sell on Amazon. Below is a quick overview of the primary methods:
1. Look for Products Manually
The first way to find products to sell on Amazon is to look for them manually. This will involve you searching for products on Amazon and other eCommerce marketplaces and websites to come up with ideas.
A good starting place is the Amazon best sellers list. Amazon keeps an active list of the top-selling products for each category you can quickly use to find the most in-demand products.
You can also check trends using a platform like Google Trends to see how interest in an item is changing over time.
Manual research, by comparison, is a huge waste of time. The manual process also doesn’t give you any information on potential product profits.
2. Use Amazon Research Tools
The next approach is to use software to help you streamline the research process. With an Amazon research tool, you can view the historical sales data from current Amazon product listings to get a clear idea of how much demand there is for a certain product and how strong the competition is. We will discuss how to implement this method in more detail below.
3. Hire Freelancers or Services
Another way to research products to sell on Amazon is to hire a freelancer or company to handle the process for you. This approach can save you time as you do not need to conduct the research yourself. However, this method will cost more than the other tactics as you need to pay for the service.
Now that we’ve outlined the different ways to find products let’s take a deeper look at the most effective technique, using Amazon research tools.
Product Research for Different Selling Strategies
The “how” of your selling process changes product research. To find out more about how selling strategies impact research methods, read below.
Private Label Product Research Guide
The private label market has recently hit almost $160 billion, making up 20% of the market. It is the most popular because it offers excellent profit potential. Its intense growth mainly comes from the relatively low barriers to entry.
With private label selling, you partner with a supplier that manufactures a generic product that you can sell under your name and branding. This is one of the most common sales methods for new sellers, as it allows you to quickly create your own product without having to invest heavily in its development.
When sourcing private label products, it is important to look for simple items. Too many complexities will bog down the manufacturing process and increase your product costs.
In this step-by-step analysis, we will show you how to use the suite of AMZScout Amazon business tools to research products and niches that fit your desired criteria.
1. Generate Product Ideas
The first step is to come up with your initial product ideas using the AMZScout Product Database. The database contains an archive of millions of products listed on Amazon. You can use the tool to see sales data for different products to understand how well they perform.
Step 1: Open the AMZScout Product Database.
Step 2: Create an account and start your free trial. You do not need to provide payment card details at this point.
Step 3: Define the most important criteria for you. You can filter your search results by price, category, sales, reviews, rating, size, weight, and more. You can also use the Product Selections feature for ready-made search results with proven effectiveness.
Step 4: Check the “New Products” or “Trending Products” filter to find newly released products or those with high, recent sales.
Step 5: After you click/tap “Find Products”, you’ll see all products that fit your criteria.
Step 6: Create a list based on products you have the most interest in. If products don’t meet your needs (they might be difficult to sell or boring), you can remove them from your list.
You want to review this information to pinpoint the results that best match your business needs. If you need to refine your results you can always apply additional filters to your search.
2. Find Keyword Ideas
After you come up with your initial product ideas, the next step is to perform keyword research. This will allow you to learn what related terms customers use to find that type of product. It also tells you how many searches a product gets.
You can find this information using the AMZScout Keyword Search tool. The software lets you search for any phrase to find similar terms that customers use on Amazon.
Step 1: Login to your AMZScout Account (or create your account if you don’t have one) and open Keyword Search.
Step 2: Enter your seed phrase into the search box.
Step 3: Filter the results by the number of words or their monthly search volume.
Step 4: Click/tap Find Keywords.
Step 5: Review the list of keywords that match your criteria.
There you can find the monthly search volume for each term to see exactly how often people are looking for that product. You can drill into the search statistics to get a historical view of the changes in volume over the previous five months.
With this information, you can get a better understanding of the demand and viability of a product. You want to look for items that have a good amount of related keywords with high search traffic. This will ensure that the demand will be high enough to support your Amazon business.
To find products that correspond to a keyword, click the term. Doing so takes you to the product database which will populate results that include the target keyword.
3. Search for Niche on Amazon
The next step in your product research is to review the niche for your target product by searching it on Amazon and analyzing the niche’s performance.
Before you search for a niche on Amazon, you’ll want to download the AMZScout PRO Product Finder Extension. This Google Chrome extension lets you pull sales data for any product or category as you are browsing the Amazon marketplace.
Step 2: Go to Amazon and enter a keyword (for example, a long-tail one like “travel bags for men”) from your keyword research into the search field. Amazon will take you to their Search Engine Results Page (SERP) containing the most relevant products.
Step 3: Open the AMZScout PRO Extension to review the data. Click the round button in the bottom left corner of your browser. You will see a dashboard you can use to analyze products.
Step 4: Review the historical sales data for each niche. This information includes its estimated sales, revenue, margins, customer review numbers, and more— this offers a look similar to the AMZScout Product Database
In addition to these stats, the PRO Extension provides detailed insights into the niche as a whole so that you can assess if it is a market worth entering.
4. Analyze the Niche
You can assess the viability of a niche by reviewing two important metrics: Niche Score and Niche History.
Niche Score assigns a rating to the niche on a scale from 1 to 10. A score of 10 indicates that the niche is strong, and you will likely be successful if you try to sell that product. The further down the scale you go, the more difficult it will be to succeed in that niche.
Find and click on Niche Score in the right corner. The score is based on three focus areas: profit, demand, and competition. The extension gives you a detailed breakdown of how it scores these elements.
Niche History shows how the niche has performed over time. You can see the total number of sales for each day and how this has changed. You can also see the average rank and price for the products and how this is trending.
For a more in-depth analysis of your target products and niche, you’ll need to know the process. Our next checklist will help you through that process.
5. Estimate Products Profitability within the Niche
Once you find a high-performing niche with potential, you will want to be sure you can make a profit. The Profit Calculator in AMZScout PRO Extension can help you calculate profits for these potential products. Here’s how you use the tool:
Step 1: From the AMZScout PRO dashboard, click the arrow next to your chosen product.
Step 2: Select Profit Calculator.
Step 3: Enter product price and other costs in the new window.
Step 4: Review the product weight and sizes, Amazon FBA Fees, Net Margin, and Estimated Monthly Profit.
Having this knowledge gives you a good idea of how much profit you can earn by selling similar products.
Universal Traits to Consider When Researching a Product
Below is a checklist of the important factors to consider when performing market research to find products to sell on Amazon.
The number of sales a product receives is a direct indicator of its demand. Naturally, you want to look for items with a high number of sales. If the top-performing products in a niche do not have a lot of sales, it is generally a sign that the product is not worth pursuing.
The average sales price for a product niche lets you know how much you can sell a product for and how much revenue you can expect to generate if you gain a solid market share.
The ideal price range for Amazon products is between $30 and $70. These prices are high enough to earn strong revenue while not limiting sales due to being too expensive.
The ultimate goal of business profit. Your margins measure what percentage of your sales you keep as profit. Higher sales prices and lower product costs lead to higher margins. You can find the margin for a product by subtracting the total product cost from the sales price and then dividing this amount by the sales price.
At the very least you should aim for products with a margin of 35% if you want a sustainable business. Ideally, this number would be upwards of 60%.
Seasonality represents how the demand for products changes over the course of the year. There is a natural seasonality to all items, as consumer spending drastically increases during the holidays.
However, there are other items that are very seasonal and are only purchased at high levels at certain times of the year. For example, Halloween costumes or decorations. Most people aren’t going to buy these throughout the year.
There is a potential to profit from these types of items but it is better to not build your business around them.
Reviews are one of the most important factors customers consider when making a purchase. While products with a lot of reviews are a sign of high demand, it is also a barrier to entry. When evaluating different products, consumers will gravitate to the ones with more reviews. As a new seller, it will be harder for you to break through this niche.
6. Number of sellers
When researching products to sell on Amazon, it is important to know how many other sellers are listing similar items. If the market is saturated with a bunch of other sellers, it will be much more competitive.
7. Size and weight
The size and weight of your items directly impact your operating costs. If your products are large, it will cost more to ship them and to store your inventory. It is a best practice to look for smaller items as to not cut into your margins with fulfillment fees.
8. Gated category
Amazon’s marketplace features gated and ungated categories. Ungated categories are open to anyone while gated categories require approval. Gaining approval for a gated category will increase the time it takes for you to start selling. Plus, the restriction for some categories is stringent. If you wanted to sell fine jewelry, for instance, you would need to also have an established brick and mortar store.
9. Legal restrictions
Certain types of products must adhere to various legal requirements. For example, if you want to sell electronics you will likely need to get your items certified by the Federal Communications Commission (FCC). Getting these kinds of products ready can be complicated.
10. Best Sellers Rank (BSR):
The Amazon Best Sellers ranking measures how well a product is selling relative to others in the same category. When performing product research, you should focus on the items with a good BSR as these items often have the features and characteristics that customers value the most.
Knowing the universal traits that apply to all products gives you a good introduction to all selling strategies. Trying multiple sales strategies can help you determine what is the best fit for you.
Dropshipping, Wholesale, and Arbitrage Product Research
A big part of choosing your sales strategy is understanding the difference in product research. Below, we will go through dropshipping, wholesale, and retail/online arbitrage product research strategies.
With dropshipping you list products on Amazon before you source them from the supplier. When a customer places an order, you buy the product from the supplier and have them ship it straight to the customer.
Because you do not have to pay for dropshipping products upfront, you have a bit more flexibility when it comes to the cost of your products. This allows you to sell higher-priced items. Sizing is also not as great of a concern as you do not need to worry about big items incurring larger FBA fees.
That said, the logistics of the dropshipping fulfillment process can impact your ability to generate high sales. If you use dropshipping instead of Fulfilled by Amazon (FBA), your products will not be eligible for Amazon Prime. Furthermore, the longer delivery times that are a common part of dropshipping may cause customers to look elsewhere. When using this sales model, the quality of your supplier is just as important as the product itself.
With the traditional retail sales model, you buy items in bulk from brand owners at a wholesale price and then sell them at the marked-up retail price. When wholesaling products it is a good practice to avoid selling items from top brands. This is because most brands sell their products directly to consumers and you will not be able to compete with them in terms of price.
Retail and online arbitrage is the process of procuring a product from one marketplace and then selling it for a higher price on another. For example, let’s say you notice an item that sells for $10 at your local Walmart but $20 on Amazon. In this case, you would buy the item from Walmart and then sell it on Amazon and keep the difference as profit.
When sourcing retail arbitrage items, price is the most important consideration. The entire sales model depends on your ability to get a product at a low price and flip it for more. It is also important to make sure you have permission to sell the items. Some brands only permit verified suppliers to sell their products.
How to find products to sell for dropshipping, wholesale or arbitrage
If you source your products through dropshipping, wholesale or online arbitrage you can get deeper insights into the viability of your products by using the Amazon Dropshipping & Arbitrage tool.
The app helps you find products with high margins and low competition by providing the fees for different items as well as the number of sellers.
Here is what you need to do:
Step 1: Install the Online Arbitrage and Dropshipping extension. You can add the plugin to your browser from this link.
Step 2: Start your free trial. Enter simple details (like your email) to continue. You don’t need to insert payment details when starting.
Step 3: Browse Amazon to get product ideas. You can use the regular Amazon.com search bar to find:
Categories or niches you have a personal investment in (areas you are interested in)
Products trending on other marketplaces outside of Amazon (Walmart, eBay, etc.)
Products offered by people you already work with (dropshipping suppliers, wholesalers, etc.)
Step 4: Prioritize your product ideas. Scroll through Amazon and check through the data for each item. The Online Arbitrage and Dropshipping extension provide this information:
Margins (margins over 50% are those worth taking note of)
Fees from Amazon are necessary to pay to Amazon (including FBA fees)
Seller types (if Amazon sells the product, it will be challenging to win the buy box, focus on products with only FBM and FBA sellers)
Mark the best products based on your criteria above for later review.
Step 5: Check the TOP promising products. Open the product page and use the new built-in window provided by the app to find important information about the product. From here, you can see if the product is private label, ungated, or hazmat. Read more bout these three selling restrictions below.
Step 6: Check the historical data of the product. Check out the price history and Buy Box history. Checking out price fluctuations will help you decide upon the best sales strategy.
Step 7: Find out how much potential profit it offers. Use the profit calculator to find out whether the product can make you money. The costs depend on your business model and may include:
Shipping costs (Get these from your supplier/wholesale partner)
Advertising costs (from your PPC campaign bds)
Other (What else do you pay for to make your business functional?)
The numbers will calculate based on the information you have, producing new numbers within Profit Margin, Minimum Net, and the ROI fields. Make note of these numbers to be sure your product meets your profit expectations.
Other factors when determining what products to sell
When reselling a product on Amazon, you need a comprehensive view. The AMZScout Online Arbitrage and Dropshipping extension help you with a complete picture. Here are some other factors to consider:
If the product is a Private Label. These products are sold by a single merchant with brand ownership of the item. You won’t be able to source this exact product as a result.
If the product is in a gated category or it has hazardous materials (hazmat). Gated categories (or hazmat) require additional certifications and costs you need to be aware of.
If it has a Prime delivery. You won’t need to focus on fast shipping if you dropship items that are already under prime delivery.
Going through the complete process above gives you a comprehensive picture of profitable products you can effectively sell. Product research is an essential part of your process, so it might still take some time before you come to a good product. Using AMZScout’s lineup of tools will expedite your gathering of data.
Using the AMZScout PRO Extension for a deep analysis of potential products
A deeper analysis of your chosen products can be done through the AMZScout PRO Extension. Below, we will provide detailed steps to ensure you use this tool effectively for all sales strategies:
Step 1: Install the AMZScout PRO Extension from this link
Step 2: See the AMZScout PRO Extension in the top-right corner of your browser (alongside other extensions).
Step 3: Go to Amazon.com and search for the products you found from the Onlne Arbitrage and Dropshipping extension.
Step 4: Open the PRO extension by clicking the AMZScout icon.
Step 5: Check out the number of sellers. Having more than 20 means that there is a high chance of strong competition. You should also look at the net margin (which should be over 50%) and the date the product was first sold on Amazon.
Step 6: Analyze the product for sales potential. The product score for reselling tells you about the potential of this product for resale. Make special notes for those at seven (or higher)
Step 7: Check historical data to see how the product sells over time. Click the arrow just to the left of the product you are reviewing to check historical data. Those who offer consistent sales potential vs seasonal sales determine your sales strategy.
A deep analysis of your chosen product determines its competition and potential net margins. Historical data is also just as important, so knowing when the sales are highest can help you decide when to enter. Your sales strategy changes heavily depending on how your product historically does.
Level up Your Research with Ready-to-Go Product Ideas
Want even more help finding the most profitable products? When you sign up for an annual or lifetime bundle with AMZScout, in addition to our comprehensive toolset, you’ll also receive:
Monthly reports on Amazon's hottest products that are trending each month
19 new niche and product ideas every week, selected by AMZScout AI
This will save you valuable time and provide you with a continuous stream of items to research for your business.
Get the annual bundle and so you can discover new product ideas, worry-free.
Helpful AMZScout Courses and Resources
Once you know how to research products, it is beneficial to expand your knowledge by learning more about selling on Amazon. Here are some of the useful resources you can use to learn more about how to research products to sell on Amazon:
The Step-By-Step Amazon Seller Course is a 23 part video series that walks you through all the steps needed to get started as a new Amazon seller. The course not only covers how to find products to sell but also how to negotiate with suppliers, how to set up your seller account, and much more.
The Amazon Seller MasterClasses offer hour-plus-long trainings from experienced six and seven-figure Amazon sellers. In these webinars, the instructors teach important Amazon concepts like how to find low competition items and how to optimize your PPC ad campaigns for success.
For even more thorough training, you can enroll in one of the Amazon University courses. These comprehensive training sessions are taught by experienced Amazon sellers who walk you through less commonly used techniques to give you advanced knowledge for running your Amazon business.
The monthly trends reports provide details about emerging opportunities to sell on Amazon. You can use the reports to see what markets have been growing in demand and to find interesting ideas for profitable products.
As you can see, there are many things to consider when beginning Amazon product research. Following the guidelines and tips in this post will help you get started with your research process.
If you want to streamline your research, AMZScout provides fast and accurate insights to give sellers time to do what they love — grow their business — without having to spend hours manually researching marketplaces and trying new tactics every day.