- By Steve Smith
- December 23, 2021
It is neither easy nor difficult to find out what to sell on Amazon. Which product should you sell on Amazon? How do you know consumers will buy it? How do you know how to value it so that you can make a profit? We’ll cover all of these questions and more, and we’ll show you exactly how to find product-winning ideas in this Amazon FBA for beginners guide.
Before engaging you with the process, a few best practices that will help you in your product research quest:
For all products you’re considering, analyze them for:
Before selling any product evaluate and think. Can I source and ship this product to Amazon for substantially less than it’s selling for?
In general, you can consider the “3s rule” to estimate this. The sale of each product is broken up into ⅓ for fees, ⅓ in landed costs, and ⅓ for you. It seems as if the product sells for $15, you are more likely to get a profit of $5.
Now here’s a disruption of how you can estimate the possibility of getting profit by assessing costs and revenue for each product.
The landed costs associated with getting a shipment to its destination. It is the collective cost including the shipping from the manufacturer into Amazon or your warehouse.
Cost of inventory
Any preparation or inspection fees
Referral fee: Basically Amazon’s “commission” for everything sold on the platform, usually a flat 15% that you have to pay when you sell a product on Amazon.
Selling plan fee: If you’re an Amazon seller then you have to pay a fee of $39.99 monthly and for an individual per sales transaction will be $0.99 per sales.
Amazon FBA fulfillment fee: For FBA sellers, Amazon’s cost for packaging and shipping products covers in fee per product, and it depends on the weight and dimensions of your product and the market in which you are selling.
Amazon FBA Storage fees: FBA sellers pay either a monthly storage fee or long-term storage fees.
Of course, your take of any sale will depend on how much you can buy the product for, and what fees come out along the way.
No doubt, taking any sale will depend on your worth for buying the product and the fees you have to pay along. Generally, every seller wants to sell products for $20-$50 in order to gain healthy profit, and below $20, profit margins are considered as minimal. But above $50 most customers don’t want to spend higher amounts on unrecognizable brands. So, make your price engaging for the customers and calculate your profits by subtracting fees and costs from your potential revenue.
The key component of a good product to sell on Amazon is demand. Do people want this product? Are they looking for it or is there a need or pain point this product could solve? We use data to answer these questions.
The key metric that helps us determine demand on Amazon is sales.
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Next, we want to evaluate the competition, determining how many similar products exist and whether there is an opportunity in the market for a newcomer.
The key metrics that help determine competition are the number of products and the number of quality reviews and ratings they have. In simple words, are the products already listed on Amazon any good? Amazon FBA is one of the best techniques that beginners should use to increase the rate of getting known by the customers.
You can use several research tools to uncover these metrics. These will help you find the most profitable products to sell on Amazon.
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