How To Pick THE BEST Private Label Product To Sell On Amazon
In this article, I am going to show you our scientific, proprietary method for finding the very best product to sell as private label on Amazon. This is completely unique, something I invented myself, so you really haven’t seen this before.
This method is so powerful, it’s going to blow your mind. I promise if you apply this methodology, your odds will be as high as they can possibly be of actually finding, sourcing and selling a product that will have massive long-term success on Amazon. I’m talking about the kind of product that just explodes with success once you launch it.
This article will explain the first part of our entire methodology, which you can get full access to now in our free video Crash Course (click here to opt-in).
So let’s get started.
Identifying the Product
The first part of our methodology is to “Identify the Product.” Below is our flow chart for this process.
Now, if you look at different niches on Amazon, you’ll want to select one, based on some initial surface level research. Then from there, you will have a couple of product opportunities that you identify to be promising based on, again, some surface level research.
Now, where things get really interesting and completely unique and different in our methodology to what anyone else is doing or has done (because we invented this system) is the ‘Validation’ step. Out of those opportunities you identify, you want to pick the best ones. And you want to actually validate them.
So, you run what we call a ‘Product Validation Test’ on Amazon to actually test selling this product. Don’t worry, this doesn’t mean you’re going to have to go and do a lot of work and invest into it and all that stuff. This is something that’s very simple and only takes a couple of days. I’ll show you how we do this and very inexpensively; it costs about $50 to validate the entire product.
What this is going to enable you to do is to truly make an educated, data-driven, scientific decision about what product to go for and sell.
Because, you see, most Amazon sellers base their decision making on this critical point in the process. This is the most important decision you’ll ever make: what product to sell. It will make or break you. With the wrong product, you will struggle and just give up. With the right one, you will, like our student William, just crush it immediately. Even our other students like Ashley and Ivan & Sasha have gone through this, too.
Paid Marketing Tools
With validation, you will get data from Amazon, from their ads and everything. You will test selling and actually sell a product on Amazon to validate it. Every other seller isn’t doing it this way; they will look at surface level data only, even if they’re using some sort of tool or research software. To be frank, these types of research tools are usually marketing gimmicks.
Anything like that, to me, is rather useless. It can give you some insights, but it’s all surface level data. Nothing like that is good enough to base this critical decision on. Tools can seem quick and easy, but they’re just not good enough. They just don’t cut it, if you want to really be successful.
We use zero tools in this part of the process, because nothing beats the science of it, the actual real data that we want to get to make the best decision. But, from this phase, what you’ve arrived with is a validated winner. You will know for a fact that what you have is extremely likely to be successful.
Validating + Winning
But you don’t stop there, because you might want to validate a few products. What you’ll do to better understand what to move forward with is you’ll collect sourcing data only for those validated ideas. You’ll match the validation data with the sourcing data to create pretty accurate projections into the future to see what this product would look like if you went ahead with it and got it up and running. This means finding out exactly how much profit you would make from ads, from organic traffic, etc.
From there, you select the winners. We might do the projections for, let’s say, three products. When you’ve gone through this rigorous research process, the highest ROI-related activity of all is actually this step.
You should come out with something super solid that pretty much will just succeed, easily and quickly on its own, which I’ll show you here within this entire methodology.
But, this is really the only way to really do it, in my opinion, so that you truly succeed until it’s scalable and you can continue to put out products and be successful.
Almost everyone has it completely backwards. People truly can be really cheap at this stage and make the decision way too fast without looking at the data; they just use a quick tool to make a decision in a day and then move forward. Then, they focus all of their energy on the marketing, assuming this is the main problem. They think, “I don’t know how to market it. I need to try it with different tools and different methods.”
But, that’s completely wrong, because if you follow this process correctly and you choose the right product, you barely have to do any marketing. The marketing will just take care of itself, because you have something that is just a winner. You have something that people want to buy and that is a really great open opportunity. Once you have identified that, you move into sourcing with that product.
Now, let’s talk about this process in more detail. The first part of identifying your product is to do what we call ‘Product Research’.
This is just surface level, data-driven research. You just go to Amazon and browse inside the target niche or category you selected. It can be any niche or category. That’s not the most important thing; all niches can work. It’s not about your niche; it’s about your product. More specifically, it’s about your service terms, which we’ll talk about soon.
You can select any niche, if you have a passion for it, that’s the best thing to do, select that. Then you go to ryananddaniel.com/directory, which will take you to the correct location on Amazon to browse inside the target niche.
Dig Into a Sub-Category
Then, you dig into the sub-category. So, within that niche, find something that you’re even more excited or passionate about.
Maybe you love coffee, for example, like I do. If you like coffee, then you could go into coffee makers. Personally, I love French press coffee. So, I might look at French press coffeemakers. Coincidentally, I actually know someone, one of our students, that has been incredibly successful selling French presses.
Now, I’m not recommending that you sell French presses, as these are just some examples I’m pointing out. You’re much, much, much better off doing this process on your own and having it come from yourself, and trusting in your ability and the process.
Gather Product Data
Next, you want to gather product data. This means BSR’s or Amazon’s Best Sellers Rank, shown in the Product Research slide above. Here, you can see I’ve circled where you find that number. In this case, we’re looking at a product in the Sports and Outdoors category. And again, this is just an example – a foam roller. As you can see, it’s just randomly selected. Again, this has nothing to do with what I think you should sell, nor is it a better idea than anything else.
So you look at this number and you collect it. Then you look at the number of reviews located right above that number, so there are 3,033 for this product. You want to do this for at least three of the highest-ranking products for any given idea. Let’s say you’re selling coffeemakers, you might look at a couple of different types of coffee makers. If I look at French presses, I’d type that or go into the French presses category on Amazon. Select the top three best selling ones and collect this data from those. Then repeat this with any other product idea.
For example, if it’s a different kind of coffee maker, then that’s a different product idea. A French press is one kind of product; there could even be different product types within French presses that I don’t even know about, like plastic French presses or glass French presses. So, you can definitely look at that, too.
The main thing here is to collect the BSR, Best Sellers Rank, as you see there, as well as the number of reviews for the top three products with the most relevant search term.
And if you do type into the search the word ‘French press,’ keep it simple with the most relevant, self-explanatory term. Then when you do this, you will look at the first three products that rank.
As a side note here, do not include sponsored ad placement. So, there’s going to be a sponsored ad placement for pretty much every product and it says, “sponsored” in the search results. Don’t click on that product and collect the data on that, because that’s not what you’re looking for. You’re looking for the top three products, and I’ll explain in just a moment why that is.
Analyze Spreadsheet Data & Identify Top Ideas
The next part of identifying the product is to analyze the spreadsheet data and find the top ideas. You want to collect this on a bunch of products, like at least ten ideas, but preferably, like 25 or more. It’s worth putting the time into this. I’ll talk more about delegation, but I’ll just have my team members help me out. You can also have a virtual assistant that costs $300 a month, full-time, do this and collect 500 ideas for you, or something like that. So, you can really look at all of those and see the best ones.
You put this in the spreadsheet. You just collect the data, and you can do what we do inside Infinity Code: color code the spreadsheet. We give you a green color when something is a good idea and red when it’s not. This is what you want to look out for, and that’s how you can color code and conditionally format the spreadsheet.
When you analyze the data after you collect it, you want to take the averages from the three products. Let’s say for French press, you collected BSR and number of reviews for the top three French presses you found. You want to then average the BSR number and average the reviews, then you want to look at these numbers.
The average BSR should be under 2500. That’s generally a good sign, because this means that there’s a lot of volume. If the BSR is higher than 2500, there could still be enough volume, but chances are that it’s not really as exciting as something that has lower volume. Because these are the top three products, remember. So you want to see that this average is below 2500 in general.
You also want to look at the number of reviews. That average number of reviews should be under 200, which is generally a good thing, because that’s a sign of competition.
But, again, these are just benchmarks. You have to take everything else into account. This is good to look at as a rule of thumb, but even if none of this is true, you might still want to look into the product. It depends on your experience level and things like that as well.
But the absolute minimums I recommend is an average BSR number that’s less than 10,000, and an average review number that’s under 500 to 750. If something meets those criteria, you are free to look into this idea further. But, if not, I would skip it, because you can find something better.
There are some other considerations, too, that you’ll want to keep in mind when you look at the product.
Product Size & Weight
For example, you want to make sure that the product weight and size makes sense for you. You could sell a product of any weight and size on Amazon and be successful at it. But, if you’re just starting out, I’d suggest you try to find something that isn’t absolutely humongous or extremely heavy. For example, I would not suggest you try to sell a car on Amazon or something like that.
That doesn’t mean that it all has to be small and light. Yes, you pay more for shipping. And you will pay more for shipping for larger items, but if the profit margins are there, who cares.
But if you’re starting out on a shoestring budget, then generally speaking, you’ll want to find something that’s smaller and lighter, because it’s going to be cheaper to start. But, again, you start with five units, so even if it’s quite large, it might still be fine.
Remember that most people are only looking at small and light items, because that’s what everyone tells them to do. So, I’m going to tell you that you’re free to look at larger items.
There is so much more opportunity often times with larger, bulkier items, now, because there’s way less competition. Just bear that in mind, but you can still find amazing opportunities with products that are light and small.
Complexity and Durability
This is more important in many ways, because I would not suggest you sell something that is too complex or fragile. Fragility is more of a gray area, because it depends on what way it’s fragile. If it’s completely natural for that product to be fragile, of course, that’s fine. You just have to be careful with how you package it. Amazon knows what they’re doing with that. If your suppliers also know, which they should, then that’s fine. But, if it’s something that would break very easily by accident, then that could cause problems.
Also, I would not suggest selling a very complex product like a laptop when you’re just starting out. This is especially because it would require a lot more knowledge and support on your behalf and that could potentially cause you a lot of issues. Try to find something that’s pretty simple and straightforward, and that’s going to make your life easier.
Special Permits or Licenses
Does your product require special permits to sell it? For example, you probably don’t want to be selling weapons to start, unless you can actually get the permit or you have the permit to sell them. You may want to look into it, though. Maybe it’s easy to get that permit. Or maybe, it just requires getting a specific form from the manufacturer.
But, you just want to be mindful of this, because you shouldn’t select something that you just cannot sell. I’ve looked at things such as medical devices and then found out that I need to actually be a licensed medical professional to sell them. Of course, I’m not, so, I didn’t pursue these products.
How Dangerous is the Product?
Is the product you’re selling dangerous? You probably don’t want to be selling something like a gun or weapon, not just because of permits, but also because of the liability. It depends of course, but if it’s something that can kill a person, start someone’s house on fire, or kill their pet or their child, be very careful, because it’s just going to be a pretty situation if you’re selling something dangerous like that and something goes wrong.
I’ll talk more later about what to do if you’re selling something more dangerous or an ingestible. But, you’ll probably want to source it domestically, because then often times you can get the liability insurance off the manufacturer on your site, so you don’t have to go and get that yourself. But, the main point for dangerous products is that, if you decide to sell them, you would probably want to get a liability insurance policy, which can be very expensive. We suggest staying away from that if you’re new.
Average Selling Price
To start, your minimum average selling price for products should be $20. Do not select anything to start that’s less expensive than $20 to sell. You want to get at least $20 per sale. And of course, again, this is not a black and white kind of binary thing. There’s no right or wrong rule really. You can sell something that’s $2 and make a lot of money. But, its way less likely to do so at this low price.
You’re probably much better off in general starting out selling something that’s at least $20, so that you can make a lot of profit fast and you don’t have to sell thousands of units to make profit. You can just sell one a day.
The higher the price, the more likely it is to have great profit margins when you sell your product and especially important is the profit-per-sale in your pocket. When starting up, it would be fantastic for you to have something that’s at least 40 or 50 dollars, because now one sale could mean 20 or 30 bucks in profit. And for some products, that profit would be 100 bucks or more per sale. Then it becomes a lot easier for you to be successful much quicker.
Just like with product weight and size, by the way, 99% of people are doing the wrong thing. They are looking for cheaper priced products instead of much higher priced products, like those above $100. When you look into those kinds of products, you’ll often find that you basically will have no competition.
Being profitable is ten times easier, because all you need is a few sales a day and you could be profiting by two-, three-, or even four-hundred dollars a day and already have a profitable business. Of course, all that really matters in business is profit.
Now, let’s move on to Product Validation. Here is our Product Validation checklist.
I had to blur some things out here. I simply want to show you the most important things for you to know now.
The other ones are more specific details that you don’t have to know to start, but of course, these items will help you a lot more if you know them. But, this is a basic checklist that we have.
I’m going to show you the steps that you need to actually go ahead and do the validation. So, let’s refer to this checklist above.
Find Product Ideas
The first thing is to find the product ideas, which I already showed you. You want to find some product ideas that you really are excited about through what I just showed you and select those to validate.
Create a Basic Listing
Then, for whichever opportunities you selected, however many there are, you should create a basic listing. This allows you to do the validation. To create this listing, you star inside you’re inside of Seller Central. You just click “create a new listing,” then you’ll input a title, two bullet points, and then one sentence for the description and that’s it. You’ll also need a UPC code; you can use a re-sold one that costs about one dollar. For this, it’s fine, because this is just something that you’ll take back down. This is just a seven-day test.
Then, find one good image and upload it, and that’s it. You just need that very basic, simple listing. It’s not assigned to convert or sell at all. It is just to run the test. You’ll also want to identify the main 3-5 search terms for this product.
What do you believe are the most relevant search terms? Just logically think about it. Don’t overthink it. Don’t use any tool that’s completely useless for this.
Just logically think what search terms you would use, if you were the one searching for this kind of product on Amazon.infi
When you type your product into the search bar on Amazon, you will actually get suggested search terms. That’s where you can really get more ideas. You can do five at this stage, even up to ten if you wanted to test that many. But, I recommend 3-5 search terms here. That’s more than enough. Then, you will just put those in the title.
Let’s say, for the French press example, that you have the search term “French press.” Then you have another one, “glass French press.” Then your third is “black French press.” You should ideally see these terms in the search bar, as suggested results when you type in French press, which means there’s already search volume for it.
You then select those terms you found and just put them in the title. To incorporate those three, for example, I would do, “black, glass French press.” That’s what you need to run this test. That’s all you have to think about. Don’t think about anything else. It doesn’t have to be a fancy title or anything.
Buy 5+ Units
The next step is to buy five units or so and ship them into FBA. Once you created that basic listing, you can create a fulfillment order. Now you just need to identify five units or so to run the test. How do you do that?
Now, it’s extremely simple, because you just need five random units. Don’t sell someone else’s brand that you’re not allowed to sell. You can find a wholesale brand that you can sell. Or, there might be an unbranded piece of inventory.
My favorite way of doing it is just either go to a local store like Walmart and buy it from there and then ship it into Amazon. Or, you can buy it off of Amazon, ship it to your house and ship it back in. Or, you can go to a site like AliExpress, and usually you’ll find anything there unbranded if you want to do that. This is probably best, unless you know you can sell some wholesale brand and then you ship that in.
It doesn’t matter if someone else is selling the exact same thing already. You’ll still do it this way, create a new listing and run the test, because it’s extremely unlikely that you won’t be able to do that for seven days to run this test. And Amazon wouldn’t allow more than one listing for the same product.
You’re going to put this out for seven days or so, and then you’re going to take it back down. I’ve never had any issues with this. You just want to make sure you can get this validation up and running for this test by creating a basic listing and having five units or so shipped into FBA. That’s it.
Picking A Winner
[+] Campaign Settings
Now, I’ll show you the data components before you can actually choose the winners. So, when you set up the product, once you have the inventory in FBA and the listing goes live, you’ll just turn on an Exact Match campaign with sponsored ads. That’s right inside Seller Central. These are the exact settings you want to use: you want to set up one campaign and select an ancillary budget of 10-20 dollars.
The duration should be set to one week. You should select “manual targeting.” As a default bid, put $2. Always do this. Always use these exact metrics. This is for a reason.
Then, you’ll provide your own keywords, which we just talked about. These are the search terms – use 5-10 maximum. Never use more than 10 because it will ruin the test. As I mentioned, even using 3-5 terms is fine. Then, the match type will be “exact match.”
Now, you just run this test for seven days and look at the numbers. This is how we analyze the data.
[+] Analyzing the Data
Here are the benchmarks for Amazon Ads per search terms. These are individually looked at for any given search term. Remember that this is an Exact Match campaign, so you’re getting the exact data on the exact terms.
If you set it up like I just showed you, the ad should run for seven days. Since it’s there in these search results for seven days, you’ll collect all the data coming through that search term for seven days.
This is the real hard data. This is not some guesswork. You’re not using some tool that’s just making stuff up. You’re actually running an ad that’s collecting the real hard data and now you can make a real, scientific, winning decision
What you want to look at are these four things:
Now, you have this test running for seven days. During those seven days, a given search term should have at least 250 impressions. This will show in your data. The number of impressions in your ad report, this sponsored ad report, is the same if you use these metrics. I’ll show you in just a moment how to make sure it is showing up. When you look at those metrics, that’s real hard data.
So, now you know exactly what the search volume is. Remember we looked at the BSR to give us an indication if it’s high or low, based on how much this product is selling. If you look at those three top products and then look at their BSR, we can get a good indication if they’re selling a lot or not, which is an indication of volume. But, that’s the best we can do without running this test. Now, we can look at the actual, true data. No question about it.
2. Click-Through Rate or CTR
Now you want to look at the Click-Through Rate or CTR, which is clicks divided by impressions. This should be at 25% at minimum. Why? Because this is an indication of buyer intent.
If the CTR is lower than this, it’s an indication that people aren’t really interested in either the product that you’re testing or similar ones.
Remember, this should be representative of what you actually want to test. So, if you want to test a French press, then you use the terms black, glass, French press. Well, that’s exactly what you should be testing. You should find the black, glass, French press, because that’s the idea you have for the product.
The CTR should be above 25% because that’s an indication that people that come through the search term are actually looking to buy something and are looking at what they’re seeing. If less people are clicking yours, it’s because your product and/or that kind of product isn’t interesting to them, or this is just a search term that’s too broad and people aren’t really in shopping mode. They’re just looking at stuff or browsing for something else.
3. Cost Pre-Click or CPC
This should be about $1.5 or lower. If it’s in the UK, like in Pounds, or in Germany in Euros, for example, it should be roughly the same amount in that currency. So, you can just do a currency conversion to figure out the number there for that currency. But, it should be about 1.5 US dollars in terms of the actual cost.
If the CPC is below this, it’s a good sign. If it’s above this, it’s a bad sign because that means there’s a lot of competition and you’ll probably struggle to at least be profitable on the ads. You’ll also have a harder time ranking organically.
So we’re looking for something that’s a relatively open opportunity in terms of less competition. The lower this number is, generally speaking, the better. But if it’s high, that isn’t necessarily a bad thing. It might just mean that there’s a lot of value here, but if it’s a pretty open opportunity, it should be at least not higher than $1.50.
Remember our parameters. We were setting our CPC at $2. We’re willing to pay $2.
So as long as the cost per click, the CPC, is below $2, your ad is going to run. It’s only if the CPC is above $2 that the ad wouldn’t run. If that’s the case, you definitely want to just forget about it, because unless you’re a more advanced, experienced seller, this is going to be too competitive and is not an ideal situation for you. So if it’s above $2, your ad doesn’t run.
Now you can just strike this opportunity out. It’s not validated. But if it’s below $1.50, great sign. And remember, impressions and click-through rates should also meet the relevant criteria.
There are no sales actually needed at the product validation phase because we haven’t designed the listing to sell, so don’t be surprised if you don’t have any sales. You don’t have any reviews or anything. But price your product at about average, just in case, and if you have sales during the seven-day test, that is a fantastic sign.
If you were able to sell this way without optimizing the product at all, and you don’t have any reviews or anything, success is sure to come your way.
Now that’s especially if the A cost, which is the average cost per sale and is also found in the ad report, is below the expected profit margin you’d have with this product. That is really an incredible sign. And this does happen, quite often actually. When this happens, you just proved this opportunity, because you already did a test.
Let’s say your profit margin is 30% and the A cost is 25% through that search term. The test was actually profitable. So just imagine what’ll happen when you get your profit margins to increase, which you’ll do with time for sure. Plus, you get your listing up and running and decide to convert, and you get reviews and everything, your A cost would be 5% or lower, so you would be making substantial profit through that search term.
So this is the way we look at it, and if you see any of those incredible signs, of course this is a green light to indicate that this product is totally proven. It’s going to work, that’s pretty much guaranteed. But you don’t see those signs, as long as these criteria are met, then the opportunity is validated. You have something that looks like a great opportunity based on cold hard data. And note, if the search term is ROI positive, like I mentioned with the A cost, it’s the same thing. Then it beats anything else. Now you’ve literally proven that it’s going to work.
Two Examples: Analyzing The Data
Above is an actual example for you. This is a validation campaign that’s completed, and if you look at this data here you can see that, while I’ve blurred out the exact terms, two of them had the most impressions by far. If you look at those two, you can see that one of them has a much higher click-through rate.
Remember, that’s clicks divided by impressions. So one has 28. The other one has just 10. So the first one doesn’t meet our criteria, but the second one does through the click-through rate. Both meet the criteria with the impressions, but only one of them meets the criteria with the click-through rate. Now, when we look at the CPC, it’s a bit higher for number two, but it’s still within our criteria, which is below 1.5.
You can then look at the sales. Number two had sales and the A cost is 27%. In this case, the profit margin is at least 30%, maybe even 40%, on this product. But it is definitely is higher than 27%, which means that this search term was actually profitable in this test. So that’s a clear winner.
Now you’ve got one validated search term, which means that this product is basically validated. But we have another clearly validated term there with sales and a 5% A cost. So now we have at least two search terms we can move forward with and this idea is very much validated, because the test even here was profitable. So we can’t get any more certain than that, and it’s going to be a good idea to sell this product.
We’ve already basically made money if we only look at those two search terms. If we knew this before and we knew to only run these two search terms, because we know they’re the best, we would have made money right away with this simple test. So when you do optimize it, it will all improve like 10 times.
Now, above is another example. You can see that there are some opportunities here, but by far the most interesting term is number three, based on this test. It has a good click-through rate, and the CPC is below $1.50. We have sales and an A cost of 50%.
That’s still obviously not as good as the other one, but I know for certain it will go below 30% with some time once you improve the product and things like that. You will optimize it, which I’ll show you here a bit later in the crash course. This will definitely go into the green and be profitable.
Why Picking A Winner Is Critical
Picking a winner is the most important stage in the entire selling on Amazon process. That is, selecting the correct, winning product, or a product that’s basically guaranteed to succeed. The reason is that there’s just a 90-day difference between what’s going to happen next, based on what you select.
If you select the right product, then like William, you will experience an incredible start with your product. I mean that in month two, you could be selling over $10,000 worth of that product.
That kind of thing will happen with the right product; will just explode. It will be so easy. All marketing strategies and tactics become almost irrelevant, because it will just work. Just the simple things that Amazon provides you with are going to be enough with the right product.
If you don’t have the right product, that’s when you’re going to be searching and scrambling and being confused, doubting yourself, and thinking things don’t work, and looking at all these different things to try and test all these marketing strategies and stuff. And nothing works, because you just don’t have the right product. It’s just a tremendous upward battle.
It’s like trying to push a massive rock up a mountain versus pushing a tiny ball down the mountain. That’s the difference in your experience when you pick the right versus the wrong product.
Like I told you, people normally have it all backwards. Everyone believes that picking the product is simple and easy, in a way where you can just do it kind of randomly, by guessing and using some sort of random tool that you think is reliable, that is actually not. It’s just not the way it works.
Identifying the product is really where you should put the energy and effort in order to really find something that is good and validated through scientific, real, cold, hard data on Amazon. And to be certain that you’re selecting a winner, a ripe product, the right opportunity to then source and sell a product into.
It’s all about the opportunity, the conditions, and more precisely, it’s all about the search terms, because with any one product, you could be very successful with the right search terms and totally unsuccessful with the wrong set of search terms.
So really, what this boils down to is not only finding a good opportunity in terms of the product type, but also a fantastic opportunity in terms of the actual exact search terms you’re going to focus on and target at the beginning.
I will show you here in just a second how to really work with those search terms to promote the product and be successful right away, and why, when you select the right search terms and then source the right product into it, things will just be extremely easy, and marketing will just happen almost automatically.
You don’t have to put any thought and effort into it. It will just happen, and you’ll have much, much bigger things to think about and worry about than some strange, random, or different kind of marketing tactics. This is why picking a winner is critical. It will make or break you. When you have the right product and you fully validate it, and have found really good search terms that have amazing data, the opportunity, the idea, everything will happen easily. This is critical.
Amazon’s Flywheel: The Secret Sauce
To go deeper and explain why this is the case, why it works this way, I want to show this to you. This is what we call Amazon’s flywheel.
Amazon is set up in a way that is really, really clever. Actually, if you look at pretty much all successful online sites like YouTube, they have a similar sort of engine of growth. Every business needs an engine of growth, and this is Amazon’s engine of growth.
Let me explain this to you.
You have this engine of growth, and what happens is that the more their selection increases, meaning the more options customers have, the more products are on Amazon, the better the customer experience gets.
People have more options, better pricing, things like that.
Now, when the customer experience increases, that means there are more people that are going to come to Amazon, so the traffic of Amazon increases. There’s more people coming to the site again and again, and telling all their friends to shop there as well.
Now, that means that more and more sellers are also going to want to sell there, because it’s a bigger and bigger opportunity. What does that mean? Well, that means that the selection is improving even further, which further improves the customer experience, which further increases the traffic, and again, it increases the number of sellers. So it is a vicious upwards cycle here that happens.
When this is happening, what is happening to Amazon as they grow is they can actually have a lower and lower cost structure per product. So they’re able to set up their incredible infrastructure, which they’ve done, to ship all over the world and fulfill and deliver at record-breaking prices and speed. And their cost structure is lower and lower per product, which means that the prices for the customers are again even lower, and all the customer experience also gets better because the prices are lower. They don’t pay for shipping, and it happens in two days or a few hours.
This is how it works, and this is how Amazon just keeps growing and growing and growing as this flywheel spins. Basically, Amazon is unstoppable, and that’s the magic, right? This is really the secret sauce to how Amazon works.
You might be wondering, okay, we were just talking about product research. How is this actually relevant for me? Well, when I say picking a winner, I basically mean picking a product that aligns with Amazon’s flywheel, a product that really fits within this model they have.
Working With, Not Against, Amazon
Remember, we want to work with Amazon as a business partner. We’re not trying to take advantage of the system and break their rules and basically have them kick us out. We’re looking to build a relationship and be someone of value to them, as they are of value to us.
We’re looking to be of massive value for our customers, but also to Amazon as your business partner here.
When you help increase Amazon’s selection, that’s when the magic happens for you, too. That’s when you’re able to identify a gap or a great opportunity to come in and fill a gap when it comes to their selection. This gap could be offering better priced products, or just better products. We’re not really going to look at how to offer better-priced products, but rather we’re looking at the other option: selling better products.
Selling Better Products
Better products could mean more premium products. I remember distinctly that my first ever product that in few months’ time went from a $258 first order to $70,000 in sales in one month, all from that initial investment. This happened because I had huge profit margins, but also because I came in and created the first really premium version of that product.
So my profit margins went through the roof, and I really filled a gap, because there’s always a certain percentage of people that want the best, the finest, or something slightly different to what is already out there. There’s an improvement that everyone wants now. This is the magic. If you do what I just showed you to identify your product and validate it, it basically means that it’s right in the sweet spot; it’s within this flywheel.
Sometimes you find something incredible through the validation step, something that just blows your mind, that’s incredible and it’s really filling a gap that’s valuable. You’ll see it in the data when you do the validation.
When you do then actually source and release this product that is really filling this gap and bringing a lot of value to Amazon by basically improving their selection, it just will explode (in a good way).
That product, for you, will just take off, and it’s amazing. That’s why you want to go beyond just picking an okay product, or looking at a tool that tens of thousands of other people are looking at, and selecting.
You want to do the work and spend the time and energy to find the best one; to really find something incredible that other people aren’t finding, that no one else has actually discovered, and that’s just basically a gap that you can fill with a private label product. Then you will just have explosive results.
So that’s it for the first part of identifying your product. This is really, again, the most important part of the entire process, so I’m taking some time to explain it. But I hope it has been really, really eye-opening so far, and I’m excited to continue showing you how to identify a winner in the next article.
Remember, this is just the first part of our entire methodology. If you want full, immediate access to our entire free video Crash Course, click here.
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