Introduction
Most sellers don’t know how to find viable products to sell on Amazon, but the solution lies in conducting effective product research.
After all, it’s not enough to just follow your hunch because products that seem like good ideas can ultimately be flops, whereas other products that don’t seem promising at first can end up killing it.
So, how do you make the right decision?
By researching and studying the market for different opportunities to sell profitable products.
But, what if you’re still clueless about what kind of product you want to launch on Amazon?
Well, guess no more because, in the following section, we’ll discuss tools that will help you come up with a viable product idea. So, follow along!
Amazon’s Product Opportunity Explorer
This free product research tool lets you unearth promising product opportunities through different metrics as well as make recommendations about which categories to go for.
It’s accurate, easy to use, and will help you make data-driven decisions, so let’s find out how to discover new product ideas using it.
Step 1: Log in to your Seller Central account and go to the left-hand side menu. Then hover over “Growth”. Then, click on “Product Opportunity Explorer”.
Step 2: Enter a keyword related to a product idea you want to explore.
Based on different metrics, Amazon will show you all the examples of products similar to the keywords you used. These metrics are as follows:
– Search Terms. The top three highest-volume search terms for the products that align with the keyword you used.
–Search Volume. This shows how often customers use certain search terms to look up a product.
-Search Volume Growth. A percentage showing any increase or decrease in search volume for the search terms.
-Number of top-clicked products. The number of top products that receive 90% of clicks and sales.
-Average Price. The average selling price of the products that are relevant to the search terms.
–Price Range. The range between the maximum and minimum selling price for products.
Step 3: You can filter the results to narrow your search to what you want. For example, you can set a price range from $50 to $80 if you want to avoid selling low-price products.
Step 4: Identify a niche based on the Search Volume and Search Volume Growth metrics. You can choose between two cycles (90 days and 365 days) to spot fast-growing niches.
Step 5: Evaluate the niche by clicking on it to view the following information:
-Products
-Trends
-Customer Review Insights
-Search Terms
Products
Under “Products,” you can view several metrics for niche products, such as click-share, click count, average selling price, and total ratings.
But why is this important?
These metrics can help you sift through the products to see which ones are doing comparatively better and know what customers gravitate towards by knowing the important features and buying criteria for these customers.
Plus, you can check out the price ranges customers are willing to pay, which will help you come up with a suitable end price for your product.
Quality-Driven Customers
These metrics can also gauge how much customers prioritize quality.
Key factors like review count, ratings, and price shape buying decisions.
By analyzing average price and click share, you can determine if your customers are quality-focused.
If lower-priced products don’t get high click shares, it signals that shoppers value factors beyond price—like quality and reviews—making them willing to pay more for better products.
Trends
Another section you can probe deeper into is “Trends,” which shows a product’s click count, total offer depth, and BSR (Best Seller Rank) over a year.
Just like the Pumpkin Spice latte is in high demand in the autumn or string lights’ sales soar around Christmas time, you can check out when certain products sell best.
Let’s take a look at this trend graph for a yoga mat.
It’s quite obvious that this product witnessed a peak in the click count around mid-July and in December.
A plausible interpretation is that customers are invested in getting in good shape around summertime and the end of the year.
This shows that yoga mats might be a seasonal product, with a click count that remains relatively low throughout the year.
So, if you’ve set your eyes on selling an all-year-round product, you may want to steer away from products similar to the one above.
Customer Review Insights
This section includes detailed information about the forces influencing customers’ opinions and reviews about a given product. It comes in handy when you want to detect any gaps existing products haven’t addressed yet.
Here’s a snippet of the two most pressing issues with a particular yoga mat: producing bad odors and having a poor grip.
If you’re interested in launching a similar product, you can channel the development into addressing these two issues.
Moreover, the Amazon Product Opportunity Explorer provides you with a bar graph that shows the impact of certain issues on star ratings.
As mentioned above, both the grip and smell of this yoga mat received negative reviews; however, the odor had a more negative impact on the reviews compared to the grip, as the bar graph shows.
Search Terms
This section deals with the search terms customers tend to use while searching for products.
It shows several metrics, such as search volume, click share, and search volume growth (past 90/180 days).
You can check out the search terms’ volume and top-clicked products for the search terms that are most relevant to your product idea to see what is already being purchased.
Amazon Best Seller Rank (BSR)
The Amazon Best Seller Rank (BSR) tool can be your go-to if you want to find different ideas for high-volume products.
Amazon’s BSR is a list of products by category that shows the best-selling products.
You can navigate the highest-selling products across different categories and develop your own idea based on that.
You can check out the best sellers in a chosen category by visiting https://www.amazon.com/gp/bestsellers.
A holistic way of using both Amazon’s BSR and Product Opportunity Explorer together is to first look up the highest-selling products in a category that interests you using the BSR. Once a product piques your interest, you can evaluate it using the Product Opportunity Explorer.
Helium 10 Black Box and X-ray Product Research Tools
Outside of Amazon, there are several tools that can help you find new product ideas, so in this section, we’ll cover two of the Helium 10 tools: Black Box and X-ray.
Let’s get started with Helium 10 Black Box.
Black Box
This is a tool to unearth product opportunities on Amazon by sifting through all the products available through simple criteria.
There are two ways of doing research using Black Box: Products and Keywords.
We’ll start by researching “Products” and covering the important fields to fill out.
Step 1: Hover over the “Tools” section on your Helium 10 dashboard, then select “Black Box”.
Step 2: Once you open Black Box, you’ll land on this page titled “Products.” This means you’ll sift through different products based on the fields you fill out.
Step 3: Choose your marketplace.
Step 4: To filter different product opportunities, fill out different fields such as:
- Product: Under “Product”, select the categories and subcategories that interest you. For our research here, we picked several categories such as Arts, Crafts & Sewing, Baby Products, and Pets Supplies.
- Review Count: As shown in the screenshot, we set the review count range between 15 and 450. Avoid targeting products with thousands of reviews—they’re often dominated by well-established competitors, making it harder to compete effectively.
- Ratings: Make sure to select ratings that don’t exceed 4.5, as products with 4.5+ ratings are more difficult to improve.
After you run the search, each product will be displayed along with its monthly sales, revenues, price, reviews, etc.
Now, let’s move to the second way of doing product research using the Black Box: Keywords.
This tool shows you estimated data from Helium 10 for how much revenue and how many searches a keyword gets per month. It does so by giving you a list that fits the filters that you apply.
This comes in handy when you want to find out whether or not the products for these keywords are viable enough to pursue.
Step 1: On the Black Box tool page, choose “Keywords”.
Step 2: Fill out fields such as:
- Search Volume: Specify the keywords’ search volume, which shows you how many times a keyword has been looked up on Amazon. You need to go for medium to high search volume to find the popular queries.
- Review Count
- Price
Step 3: If you want to check out a product that matches a certain keyword, go to the right-hand side of the table, click on the three dots, then select “View on Amazon”.
Helium 10 X-ray
Another way of doing product research using one of Helium 10’s tools is to use the Helium 10 X-ray.
This tool comes in handy when you want to estimate how much a product sells to determine whether the opportunity is big enough for you to pursue before launching your product. We’ll cover two usages for this tool: sales volume and fees. So, let’s find out how it works.
Sales Volume
Step 1: Go to Amazon.com and type in the product that interests you in the search bar.
Step 2: Open the X-ray tool, then select “Amazon Product Research”.
Step 3: Once all the data populates, you can navigate several metrics to gauge how much sales the existing products on Amazon are making to infer how much you will be able to make as well.
The important metrics you need to look at are:
- Amazon Fees: These are the fees that go to Amazon for each of the products that are in the search results.
- You can open the sales graph for each competing product to see what the sales look like for a specific date range (30 days/90 days/1 year/All time).
Fees & Profitabiltiy
Step 4: Leverage X-ray’s Profitability Calculator. You need to be sure you’ll be profitable, so you can use this tool to calculate your expenses with the price you’ll be selling your product at to see if it’s viable.
You can activate it by opening a product listing and clicking on the Chrome Extension.
It will automatically populate the FBA fees, referral fees, and storage fees your product will incur. As such, it will show how much a product is making in profit per unit sold.
Finally, you can use the profitability calculator to play around with your product’s dimensions to see how much you’re likely to make or lose in profits if you design your product with specific dimensions.
Now that you have gone through your product research phase and you might have some ideas you need to validate, we’ll take you through two important factors you need to consider:
-Market
-Financials
We’ll go over each one in detail, so let’s dive in!
Market
One of the most important aspects that will determine your product’s success is the market.
For the market, there are several aspects you need to consider first. These are:
-Market size
-Nature of competition
-Nature of advertising in certain categories
Market Size
The largest determinant of whether or not your product will take off is the market size.
For example, your product is much more likely to hit $100,000 in revenue in a market where the top product is doing a million a month than in a market where the top-selling product is doing only $50,000.
Nature of Competition
Second, you must understand the nature of the competition you’ll be up against. To do so, you need to think carefully not only about which categories to go for but also the ones you need to avoid at all costs.
These categories could be anything from highly competitive, oversaturated categories with low-profit margins to categories with the least product differentiation.
Highly Competitive & Oversaturated Categories
Some categories you need to avoid because they can harm your business.
This is because the competition tends to be fierce, and the brands you’re competing with are well-established, household names that you won’t have any advantage over.
These are some of the highly competitive and oversaturated categories:
-Accessories and cellphones
-Supplements
-Food and nutrition
Cellphones and Accessories
Unless your product is innovative and brings something new to the table, it’ll be extremely difficult to make it work. The point is that no one needs to buy another iPhone case or USB cable while shopping on Amazon.
Think about it in this way: does the market lack cellphone accessories? Are your products capable of competing with the well-established ones out there? If the answer is no, you’re better off with a different product idea altogether.
Supplements
Another classic example of an oversaturated category is supplements. Here’s a screenshot of a product research tool showing the top vitamin C products on the market.
The sheer number of brands selling vitamin C is telling competition-wise.
So, to get your sales going, you’ll have to compete on price only, which will hurt your profit margins. Also, wrestling with such fierce competition will require spending a fortune on advertising campaigns, again taking away from your profits.
In other words, the supplements category is highly competitive, saturated, and lacks differentiation.
No-differentiation Categories
Naturally, you want your product to stand out from the competition and appeal to as many customers as possible.
Be it your marketing strategy, packaging, or product design, you want to leverage this competitive advantage to make your product sell more.
Yet, some categories leave you no room to offer a differentiated product. As a result, you’ll end up competing only on price, which means you are eating away at your profit margins.
So, how do you make your product stand out from the competition?
Here are several ways to do so:
- Differentiate your product by highlighting features your competition lacks
You can differentiate your product by reading the negative reviews on your competitors’ listings and addressing the points brought up by these reviews.
Generally speaking, use competitors’ listings with star ratings under 4.5 to end up with an ample number of negative reviews.
Read these reviews to figure out the main reason why customers dislike this product, and only then can you work on launching an improved version.
Now, let’s elaborate more through the following example.
Say you want to start a brand in the healthy food category on Amazon.
So, while looking up different competitors, you notice these reviews on many of your competitors’ pages.
All the reviews mention the bad taste and difficulty of getting a refund.
So, you take it from there and start working on a new protein bar line with tasty flavors in addition to having more customer-friendly refund policies set in place.
- Differentiate your product by packaging
This might be an overlooked way of making your product stand out, but think about all the products that could’ve been sold in bags or cups instead of bottles. Wouldn’t they have caught your attention more easily?
Here’s an example of a pet supplement brand that has set itself apart by packaging its product in a bag, unlike the rest of the market.
When you come to think about it, this is an effective way for this brand to cut down on its manufacturing costs as well as grab customers’ attention.
Even better, they could be offering their product in eco-friendly bags that can easily cater to eco-conscious customers, something that would reflect positively on the brand image.
Nature of Advertising
Spending money on PPC campaigns is a must to make it in Amazon’s competitive environment. Yet, you need to realize that you pay differently for ads depending on the category.
For example, the cost-per-click (CPC) can be as high as $4 to advertise a product that sells for $20!
Categories that tend to have a higher CPC are:
-Health & Beauty
-Foods and Groceries
-Apparel
Financials
Your ultimate goal as a seller is to make as much profit as possible, so getting the hang of your financials is important.
From setting your profit margin to deciding on your pricing strategy, this section will have you covered with the necessary information, so follow along!
Profit margin
As long as your revenue covers all your costs with a healthy gap, you’ll have a decent profit margin.
But, to be able to do so, you need to be aware of the several costs you’ll pay to be an Amazon seller.
Costs
- Landed Costs: These are all the expenses that your product incurs as it makes its journey from the supplier to your warehouse. They include the product’s manufacturing costs, shipping fees, customs duties, taxes, etc).
- Referral Fees: This is similar to a commission Amazon gets for providing sellers with a platform to list and sell their products as well as securing payment processing, among many services. The fee usually varies based on your product price and category, but it’s generally 15% with a $0.30 minimum per item.
- Fulfillment Fees: In exchange for letting Amazon handle the picking, packing, and shipping of your products to customers, you’ll pay a fulfillment fee. This fee is simply calculated based on your product’s size, weight, and dimensions.
- Ad Costs: To generate sales, you know that spending money on PPC is inescapable. These costs include CPC, ACoS, and TACoS.
As a rule of thumb, you can estimate your profit margin by breaking down the money you get from sales in the following way:
- ⅓ goes towards landed costs
- ⅓ goes towards other fees
- ⅓ goes to you as gross profit
After calculating all your costs, you’ll start getting an idea of your profit margins. Yet, you may be wondering what’s considered a good profit margin. On average, you should maintain a 25%-30% profit margin before ads.
True, sometimes it would be difficult to reach this margin in certain categories, whereas it’s easier to aim for higher in others. Still, the rule of thumb holds: the higher the profit margin, the better.
Now that you know the profit margin you should aim for, you need to know how to accurately price your product to achieve and maintain this margin.
Pricing Your Product
Knowing the right price for your product is similar to walking a fine line.
After all, you don’t want to set a price for your product too high because this will push customers towards buying from your competitors.
You also need to steer clear of setting the price too low.
This obviously can start a price war, and it’ll be only a matter of time before you and your competitors will be set for a race toward the bottom with your profit margins hurt considerably.
So, deciding on your product price has to be data-driven, and the good thing is that there’s more than one way to go about it. But you can simply do it in the following manner.
With the 25%-30% profit margin in mind, you can calculate your end price by calculating the total cost per unit and then dividing it by 0.7.
Next, check out the market price to see how the price you’ve just calculated stands in comparison.
It can’t be overemphasized how important this is to gauge whether or not the price you’ve arrived at will be reasonable for customers.
Wrapping Up
Effective product research is the key to success on Amazon—guesswork won’t cut it.
By leveraging tools like Amazon’s Product Opportunity Explorer, Helium 10, and BSR rankings, you can make data-driven decisions that give you a competitive edge.
Now that you know how to spot profitable opportunities, it’s time to validate your market, crunch the numbers, and launch a winning product!