AMZ Product Research: Here’s How to Pick What to Sell on Amazon

Deciding what to sell on Amazon FBA or FBM used to be easy: it was a seller’s market, and anyone could pick a popular product and launch it to get some quick sales.

But figuring out what products to sell in 2021 is a different story. Thousands of merchants launch on the marketplace every day, and most of them won’t succeed. The marketplace is full of fierce competition, so the best products to sell on Amazon are no longer the obvious ones.

If you’ve done your research, you know you’ll need an Amazon product research tool to find a product idea with data behind it. We’ll explain how that works here, but finding a winning product to sell is a bit more complicated than that these days.

How NOT to Choose a Product to Sell

Before we get into what a good Amazon product strategy looks like, let's look at a bad strategy (one that is unfortunately way too common):

Joe is new to the Amazon Marketplace and he’s trying to come up with a big hit product. He notices that his friends are becoming increasingly eco-friendly and health-conscious, all having purchased reusable water bottles in the last year.

Joe also notices people at work, grocery stores, and movie theaters using water bottles on a regular basis.So, he hops onto Amazon and does a quick search for "water bottles.” Immediately, he's bombarded by thousands and thousands of reusable water bottle options. The ones he clicks through seem to be selling well.

Joe thinks to himself, "If I was selling water bottles, that would be me in the Amazon search results, and I’d be the one making tons of money!"

Sadly, this is the fatal flaw in Joe's plan for Amazon domination.

What Joe doesn't realize is that those water bottle brands didn't end up on the front page of Amazon's search results by accident. It took months, even years for those brands to find customers and success in the water bottle market. They've invested a lot of funds into their advertising, both on and off Amazon, and were in the market early enough to secure their place in the water bottle industry.

In other words, Joe is about to get crushed.

He doesn't have the resources to compete with thousands of successful water bottle brands, and his brand isn’t established enough to drop a new product in a crowded market with instant success. He's finished before he's even started.

On Amazon, the markets that seem the easiest to get into are usually the toughest. They're oversaturated and dominated by huge brands with deep pockets. To succeed on Amazon, you're going to need to start small.

If you’re still wondering how to find products to sell on Amazon (without doing what amounts to an informed guess), you need to read this section.

When you use a product research tool to figure out what to sell on Amazon, you can easily find niches where shoppers are searching for certain products, but not finding good options.

Even when there are good options from the competition, you can filter out your results to products where the competition isn’t selling very much.

To learn more about how Massview’s product research helps you find profitable products that sell, check out the video below.

By using Massview’s keyword data tools for product research, you'll be able to find more niche markets in an afternoon than you could find in a year on your own.

How to Find a Market Niche: 4 Methods

There’s more than one way to find a market niche, so keep your options open. As you look through potential products, remember that you’ll need to find a supplier who can get you the product at a great margin.

1. Find a Market Gap

When trying to find your niche, it's best to start in a category that's in high demand but doesn't offer a lot of products. This is what's known as a market gap.

A market gap is an opening in an industry that no business has taken advantage of. Despite how crowded today's marketplace is, market gaps are being discovered every day.

They're the simplest and fastest way to find success for your business. And since the gap hasn't been discovered by other businesses yet, you can start small and enjoy having little to no competition.

On Amazon, the way to find a market gap is to look for products that are getting a high volume of searches but that don't have a lot of reviews or products available. If everyone is looking for Wonka Bars but nobody is selling them, then it's probably time for you to open a candy shop.

Using this approach to finding a niche prevents you from falling into the water bottle trap we mentioned earlier. You'll be able to sell a popular product before anyone else even realizes it's popular. Massview’s keyword tools (mentioned above) are useful for this approach.

2. Find an Oversaturated Market with Easy Competition

If you have your heart set on selling a product that others are already selling, then you want to find a market with easy competition. These are going to be niches where lots of people are already offering products in but that no one has really dominated yet.

Using an Amazon analytics tool like Massview, you're going to want to look for products on Amazon that are getting a high volume of searches. Then, go through these products and find the ones that don't have established sellers (i.e. nobody has many reviews)

Unlike finding a market gap, this method is about entering a market that you know you can be successful in, due to the market already being established. Rather than trying to fill a gap, your goal is to stand out from the current offerings. Provide a high-quality product, give it a unique twist, get a bunch of reviews, and you'll be the obvious choice in a busy market.

3. Satisfy Unhappy Customers

Following the same tracks as method 2 is finding unhappy customers. This strategy involves looking for a popular product with a high volume of searches and poor ratings. People are buying this product and leaving reviews, but they aren't happy with what the market currently has to offer.

And that's where you come in. Finding a niche like this gives you a perfect opportunity to provide a better product to the customers that are already waiting for a better product to come around. Read some of the common complaints in competitor’s reviews, and figure out how you can improve on the product.

This method can help establish you as the go-to for a particular product since you'll be the only one offering a decent version of it.

Bonus tip: Aside from the product itself, pay attention to the way you position your product. By presenting your product in a different way, you can manage customer expectations and even reach new customers who might be more satisfied with your product than the current ones would be.

4. Create a Completely Original Product

Finally, the most difficult way to find a niche is to build it from scratch. This involves creating a product that doesn't yet exist — the old "they don't know they want it yet" strategy. This is the hardest method to make a success, but if you believe in your winning idea, you might be able to pull it off.

Again, you can brainstorm ideas for this using the Keyword Database available in Massview. This will let you see what people are searching for but not finding. The advantage here is that people sometimes search for something broad without having a specific type of product in mind, such as “outdoor games” or “home workout.”

With this data, you can create the products that people are looking for or create something completely different that fills the same need. This approach is often riskier since there’s no familiarity in the market (and competitors might take your idea once you’ve invested a lot to develop the product and test the market), but if you back it with passion and a meaningful brand, you can become the first to offer the next big thing.

Create a Product Cluster for Repeat Customers and Bundling

Now that you have your niche in hand, it's time to decide what you're actually going to sell. You may have a few ideas for the products you want to sell (especially after looking through Massview’s keyword database), but that's just the beginning.

You need to find a way to structure your product offerings in a way that caters to your brand— and Massview can help.

First, find a "big" product (something on the pricier side that people buy less often) to offer that fits neatly in your category. This is going to be the primary product that people associate with you — everything else in your store should complement this product.

Once you have this product in mind, look through Massview’s Keyword Database to find "small" products to go along with it. These are essentially tertiary products that are low in cost, small in size, and possibly even disposable.

Products like this give people a chance to get familiar with your brand, customer service, and the quality of your products. Sometimes the smaller products might work well on their own, and they provide customers with an inexpensive way to try out your brand before bigger purchases.

Over time, you can expand your product line until you build up a catalog of offerings that all fall under the same brand. And just like that, you've built a successful Amazon brand!

Test Your Product Market Before Investing (Validating an MVP)

Now that you have a solid product selection and some promising keywords, you may be tempted to make a big order of your product and start pouring your money into ranking campaigns. However, this is riskier than it might sound.

Launching any new business relies on some big assumptions. Namely, you’re assuming that enough people will want your product that you can actually make enough revenue to stay afloat.

If you’ve never read The Lean Startup by Eric Ries, the concept of a Minimum Viable Product (or MVP) is one of the most important principles for any entrepreneur to understand. The concept itself isn’t new, but the term was popularized by Ries.

With an MVP, you want to test market demand with as little investment as possible before you go all-in.

How to Validate Your Product and Keywords

Say you’ve used a product research tool to find your niche on Amazon and narrow down the product you want to sell. You find as many relevant keywords as you can (keywords that get a lot of search volume without too much competition), and you plan to promote your product through these keywords.

To rank higher in the search results for a keyword, you’ll need consistent sales through that keyword, so rebate platforms like Snagshout are powerful ranking tools.

However, these rebate campaigns can be pricey, and you want your product to sustain sales once you’ve ended the campaign.

Before you launch a ranking campaign then, you need to order a small batch of products to FBA (or your choice of fulfilment method). Why the small order size? Because if they don’t sell well, you don’t want to be stuck with a ton of useless inventory.

Now use Amazon Sponsored Products to run Pay-Per-Click (PPC) ads, putting your product in front of any Amazon shoppers searching for all the most promising keywords you selected.

Different types of shoppers might use different keywords to search for the same thing, so try to imagine how they’d search differently based off: their age, background, location, lifestyle, or how familiar they are with your product or category.

Testing a wide range of keywords can tell you a lot about how to position your Amazon product, and who you want to sell it to.

Look at CTR and Conversion Rates to Determine Success

As these ads run, Amazon collects all kinds of data for you. Three metrics to pay especially close attention to are your Clickthrough Rate (CTR), your Conversion Rate, and your Return on Ad Spend (ROAS).

Your CTR is the percentage of shoppers who click your ad when they see it. A high CTR tells you that people are interested in learning more about what you’re selling, instead of just scrolling past and clicking on a competitor. A good CTR depends on your industry, but 1% or more is generally a good sign.

Your Conversion Rate is the percentage of these people who, once on your page, actually purchase your product. A high conversion rate tells you that the shoppers landing on your page are convinced the product is worth their money.

What’s a good Conversion Rate? These rates vary widely by category and product, and while the Amazon average is 10-15%, this number is weighted down by a lot of sellers who won’t be in business very long (as well as by high-margin products that don’t need many sales), so take it with a grain of salt.

These two metrics are related, but don’t always correlate. For instance, sometimes you might have a low CTR, but a high conversion rate. This could mean your product isn’t very relevant to everyone searching the keyword you’re using (such as when the keyword isn’t very specific), but the small percentage of people do who click are finding it very relevant to what they were looking for. A different keyword might be more profitable in this case.

If you’re getting a high CTR but low conversion rate, this suggests your product still has potential. It means people are finding your listing relevant, but your page isn’t optimized for conversions yet. Learn how to optimize your product listing to improve this, and do what you can to get more product reviews. Shoppers are much more comfortable buying a product when it has a lot of reviews, so this drives up your conversion rate.

So is there a simpler way to measure success? Yep. Enter the Return on Ad Spend.

Your ROAS might be the most important metric here. Your ROAS is the amount of revenue you earn for each dollar you spend on advertising. It’s measured by taking the total conversion value of your ad campaign (revenue earned) divided by the cost of the ads. If you spend $25 on ads and earn $100, your ROAS is 4. The higher this number is, the better.

If your ROAS offsets your overall production and shipping costs with some extra cash to spare, you might just have a sustainable business model!

Avoid Losing Your Data

Be sure to download your data at the end of each experiment. Amazon deletes the data every couple of months, and you never know when you’ll need to look at it again.

Pay Attention to Shipment and Production Times

You want a short turnaround time on your orders: the faster you can get your product to the fulfilment centers after ordering, the less likely you are to run out of stock. For some products, this means it might make more sense to find domestic suppliers instead of foreign ones.

Don’t Worry About Lower Profits At First

Look at this exercise as a learning experience, because you’re paying for key insights about your business. As you get more data, you can decrease investment in lower performing keywords, and increase investment in the keywords getting you more clicks and sales.

Running ads like Sponsored Products is one of the only ways Amazon tells you what people are searching for and how they behave. Don’t ignore how powerful this data can be, even if you don’t continue running ads in the long term.

Next Steps & Further Reading

Now that you’ve found a product, figured out the best keywords, and verified that those keywords will help you sell your product at scale, it’s time to launch your business for real.

Get some more of your product stocked, and start running some ranking campaigns for your keywords, using your PPC ads and ranking campaigns like Snagshout. Familiarize yourself with the essential strategies to get more sales on Amazon.

Improve your manufacturing and shipping processes in order to get lower prices, better products, and faster customer fulfilment. Check out our product sourcing 101 article to learn more about this.

Have a great private label product? Consider the Amazon IP Accelerator to get your product trademarked and get Amazon’s brand protection (among other perks).

Make sure to avoid common Amazon seller mistakes as you grow your business, such as buying Amazon reviews.

If you want to outsource the legwork of getting your product ranking in search results, check out Massview’s Amazon product management services.

With all that, you’re set to get started with your business. Good luck!