After taking the decision to start selling on Amazon, it can be overwhelming, confusing and frustrating trying to decide what product niche to sell, and then specifically the products you’ll sell. Here are some tips that I’ve learned since I started.
Many sellers set up on Amazon as Joe Bloggs Ltd, and sell anything and everything. They sell salad tongs, knitting needles, car polishing kits and toothbrush holders. You can absolutely do that…but I wouldn’t recommend it.
Amazon is not the be all and end all. Amazon is a fantastic place to sell products, and you should absolutely always have a presence on Amazon. But eventually you want Amazon to be one of several income streams. For example you will eventually have your own e-commerce website, you might sell on eBay. Who knows, maybe you’ll be selling in the shops!
And, in my opinion, you can’t do all of those things well if you are selling anything and everything. You need an identity.
Nike are the sports guys. Hoselock are the garden guys. Joseph Joseph are the kitchen guys. And YOU will be…
Well what will you be? What do you love? You have to do something you are interested in and passionate about. Sure, I could probably make some money selling in the baby niche, or the model niche. But I’m not into those things. Choose something you know about, you enjoy, that excites you and that you can offer genuine value in!
Thought of something? Good.
Now take 5 minutes to think of all the things you use, or do related to that thing you love. It might be a good idea to go and look at all your kit, or visualise a typical day doing this activity. Grab a pen, and start writing everything that comes to mind.
Let’s say you’re like me and you love scuba diving. Can you imagine your typical day of diving, and all the things you do? I keep all my kit in special storage bags, I have special clips and bungee cords to organise my kit, I have special straps on my fins and mask to make them more comfortable and easier to get on and off. I wear a novelty dive hood with horns on, I have branded diving t-shirt and a diving thermos for my hot chocolate to warm me up after diving in the chilly north sea.
Would I use Amazon to buy any of these things? Are these things small, light, and relatively cheap to make? Absolutely.
So we now have some ideas for products, we can start to think about whether any of these are viable. To do this, I recommend using the Jungle Scout chrome extension.
Jungle Scout is a neat bit of kit which analyses the Amazon market place and will estimate the sales for products listed on Amazon. After you install it in chrome, all you need to do is search for something in Amazon, and press the Jungle Scout button in the chrome toolbar. A dialogue box will appear with the results of the analysis, which you can export if you wish.
So what are you looking for?
3. Not too many reviews
4. Competition is realistic
Depth and sales
You need depth in the market. You may search for something (say…neoprene scuba mask straps) and you find that there re only two sellers! “Wow! Only two sellers! I’m going to come in and dominate this market”…not so fast! This probably means there just isn’t enough demand for this product or problem. Don’t get me wrong, if you have thought of a brand new innovative product to fix a problem, then that’s great. But launching it on Amazon isn’t usually the best place for such new ideas, at least at first.
What you are looking for are at least 10 sellers all selling a decent number of units. What is a decent number of units? Well that depends. Some ‘gurus’ will tell you they need to be shifting hundreds per month. That may be true for the US marketplace. But I sell in the UK and certainly I am happy to sell products that are only shifting 50-80 units per month. If everyone else is going after the ‘hot’ stuff, and I sell 20 different products at 70 units per month each, that’s quite nice thank you very much. This will also depend on your profit margin and the type of product. Selling a £50 product with a 30% margin…great! Selling a £5 product with a 10% margin, not so good – you’ll need enough sales volume to make it worth while.
Really you want the top ten competitors to have under 300 reviews each. It doesn’t take too long to rack up 100 reviews, IF you are following up with customers via email, selling quality products and offer good customer service. Selling a product where all the completion have 2,000 reviews each is going to be very tough indeed! What are customers going to choose? Your product with 3 reviews from your granny and your mates, or the brand with 1,500 five star ratings?
In many ways this is a combination of depth, sales, reviews and your instinct. Ask yourself, “Can I realistically take a decent share of the market with my product?” Is your brand good enough to take sales away from the competition? Is your product going to be as good or better than the others? Is the depth sufficient to support your product? Are there enough sales? Are you confident of getting good reviews? (The answer to this should always be YES – you should only sell products you stand behind and would use yourself).
So, to sum up:
- You need to choose a niche you are excited about and that you are willing to put time, energy and money into.
- Take the time to consider all the small, lightweight and low-cost items associated with that niche, and consider whether you can brand them yourself, and even better – can you improve upon them?
- Analyse the competition using Jungle Scout and take the time to carefully consider if the product is viable.
Once you have chosen your product, there are many other aspects to consider, such as branding, standing out from the crowd, and sourcing. These are beyond the scope of this article, so stay tuned for more updates!