Researching a Product
Episode #3 of the course Amazon FBA fundamentals: From no-experience to selling your product by Erik Rogne
If you remember from the last lesson, I said that researching a product is by far the most important part of creating an Amazon FBA business. Let’s get into why it is so important and what you need to know to research better than anyone else!
Why Is It So Important?
You may be thinking, “Uh, because you’re always supposed to do market research, duh.” This may seem simple on the surface, but no one does it!
I’m assuming since you’re here, you’re always trying to learn more and spread the wisdom to your friends. How often do you tell them to do something and they love the concept, then they never do it?
Humans are naturally lazy, and it is hard for them to do something in which they “see” no results. Product research can be boring for some, and they may feel as if they are making no progress.
Naturally, most people want to get to the fun part of selling their product. And guess what—they just skipped the most important part of the process. Now they will continue building their business and putting a lot of effort into it just to realize that they are going to fail.
Basically, that person is selling something no one wants and is attributing that failure to Amazon. Don’t be that person. Know that you’ve done the research and it will sell. Sure it may be slow in the beginning, but it will ramp up—you can back your claim with research!
Let me give you a little personal story. When I started this business, a new iPhone was coming out in the next few months. I thought I did my research by getting into the market before anyone else with a brand new iPhone case. Boy was I wrong. You must do the RIGHT research, not just ANY research.
The Basic Criteria
So what kind of things will you need to research for a product to be successful on Amazon? I’ll just give you the basics, but trust me—there is a lot more.
1. Size. Size should be smaller than 8x8x8 inches. Put both your hands together—about that size. This is because the bigger the item, the more expensive to ship it.
2. Lightweight. Products should weigh less than two pounds. This is because shipping will eat up your margins when a product is very heavy.
3. Price. Similarly priced products should be between $15 and $75. The reason for this is because items below $15 will eat up your profits because of the margins that Amazon takes. For anything above $75, customers start thinking before blindly ordering something.
4. Durability. The product must be durable and not break. This is pretty obvious. If it breaks, the customer will return it and you lose money!
5. Simplicity. The product is simple, and there are no moving parts. If a customer doesn’t know how to use your item, expect more returns or expect them to never even buy it in the first place!
6. Reviews. 10 of the top 15 products have less than 200 reviews. Three of the products on the first page have less than 75 reviews. Reviews are an important criteria. People like items that are reviewed well, and if one product dominates the market, good luck getting sales!
7. Best Seller Rank. None of the top 10 products have a BSR below 500. Five of the top 10 products have a BSR between 2,500 and 25,000. Best seller rank is similar to reviews, but instead it is how Amazon decides to rank your item.
The Best Seller Rank tells you how well an item is selling within a given category (i.e., an item in the Pet Supplies category with a BSR of 500 is the 500th best selling item in the Pet Supplies category).
When you have competition with BSRs below 500, you’re not going to sell anything. You want to target BSRs between 2,500 and 25,000 because this is where you can compete, but you’re still selling a good amount of product.
In this lesson, we talked about why it’s so important to spend time researching your product. In the next lesson, we will talk about how to import and source your products.
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