How to choose products when opening an Amazon store? (Upper)

Choosing products is a big topic with multiple methods. But the fundamental goal is to reduce operational difficulty and failure rate by selecting the right product for any type of seller (manufacturer, large trader, small and medium-sized trader), with the ultimate goal of profitability.

Below, I will share with you a commonly used product selection method. This article will explain it from four dimensions: basic logic, operating methods, tools, and actual cases. I hope it can be helpful for everyone.

1、 Selection logic

As mentioned above, whether we have an existing product or are looking for a product in the sea of supply, the fundamental goal is to gain profits by selling it on Amazon. So the following questions are particularly important:

How much operating costs should be deducted from selling on Amazon? What is the appropriate net profit?  

2. With so many product categories, if there is sufficient funds, which vertical category should we focus on?

Based on the current level of market competition for this product, can we still get a piece of the pie after entering?

How to view the sales volume of competitors' products? Does the daily sales volume of the target ranking meet your expectations?

5. How long is the product's lifecycle left?

6. What affordable optimizations can stand out from existing products?

7. Some products are easy to sell in the United States. Do you want to go to Japan and Europe to do it? Do you want to do it for the newly opened site?

8. Where are the products purchased? How much is suitable for buying for the first time?

2、 Specific methods

1. Confirm that the selected product has a reasonable profit margin and has undergone market validation.

(1) Choose products that have undergone market validation, and do not make mice unless thorough research has been conducted.

(2) How to calculate profits?

① Reasonable profit margin: A reasonable profit margin can provide financial support for future operations. Generally speaking, the profit of marine products ranges from 30% to 40%; The profit of air freight products ranges from 20% to 25%.

If there is a manufacturer advantage, the procurement cost of the product can be within 15%, and if it is a trader, it should not exceed 30%, otherwise it is difficult to push it into a popular model. Here is a reminder to everyone that we must avoid products with brand monopolies, as it is difficult for us to compete with their strong brand influence and ultra-low product costs.

② Calculation method

The following is my own cost accounting header, which temporarily does not include "other operating expenses". After listing, it will be added when calculating the actual net profit. This includes many uncertain expenses, such as return fees and long-term storage fees.

The 'FBA Fee Calculation' tool is required（ https://amzn.to/1HOEml5 ）To calculate FBA and commission fees.

Calculation method: Fill in the target ASIN and click Calculate directly to calculate the FBA and commission fees for this product. Alternatively, you can use the（ http://www.amz123.com ）Enter, there are massive Amazon utilities in amz123.

2. Choosing the categories supported by the platform will have more advantages

(1) Direction of choice: Amazon has a wide range of categories, and the platform provides key support for certain categories every year to ensure good sales in each category. If you are a factory in this category, some investment managers may even proactively come to your doorstep.

(2) How to Find Categories

Method 1:

① Search by keyword (e.g. men's underwear) and click on the most similar product

② Then flip through the product page and find the precise category to enter

③ Find the first, second, third, and fourth level categories represented by the same product (precise category)

Method 2:

Use the search box to directly search level by level, and understand what each category means

⑶ Category review

If a product needs category review, simply search for ASINs of similar products on sale in the backend before listing. If there are publishing restrictions, request approval based on the required information. If there are any questions, consult online. It's usually easy, it can be passed in about a week. It should be noted that any information provided on Amazon cannot be falsified, otherwise the account suspension will only take a few minutes.

3. What level of competition can you participate in

(1) Less than 5 out of the top 10 precision categories with over 1000 reviews

(2) Use 3-5 core keywords to search for less than 5 BSRs

The number of reviews and BSRs can reflect the level of competition for a type of product. High selling merchants enter early, have high sales, and have much advantages over new entrants in terms of supplier, service provider, and logistics resources.