Conducting market research for Amazon products is a crucial step in identifying profitable products to sell and understanding the competitive landscape. This research will help you assess demand, competition, pricing, and customer preferences to make informed decisions. Here’s a step-by-step guide on how to conduct effective market research for Amazon products:
- Define Your Product Criteria Before diving into market research, clarify the type of products you’re interested in selling. Determine your criteria based on factors like:
- Category: Decide on the product category (e.g., electronics, home goods, beauty, etc.).
- Price Range: Set a price range based on the profit margin you want to achieve and what customers are willing to pay.
- Product Size/Weight: This will affect shipping costs and storage fees, particularly with Fulfillment by Amazon (FBA).
- Competition Level: Consider whether you want to enter a competitive market or focus on niche products with lower competition.
- Use Amazon’s Best Seller Rankings Amazon’s Best Sellers page is a great starting point for understanding which products are in demand. This page shows the most popular items across various categories, allowing you to spot trends and popular products. By analyzing the Best Seller rankings, you can gain insights into:
- Product demand
- Price points
- Categories with steady demand
- The types of products that dominate top rankings
The goal is to identify profitable products within those categories that align with your product criteria.
- Keyword Research and Search Volume Understanding search volume is vital to assess demand for specific products. Use tools like Helium 10, Jungle Scout, or AMZScout to discover keywords related to your products and identify their search volume. Keyword tools will provide the number of searches for specific product terms, helping you gauge market demand. For example:
- If a product has many searches but few competing sellers, it could indicate an opportunity.
- If a product has high search volume but is dominated by big sellers, it could indicate high competition.
By understanding which keywords generate traffic, you can target the right products and optimize your listings for better visibility.
- Analyze Product Listings on Amazon Evaluate current listings for potential products. Look at:
- Title and Description: Assess how competitors are presenting their products, what features they highlight, and their pricing strategies.
- Customer Reviews: Customer feedback provides invaluable insights into what people like and dislike about products. Identify recurring complaints or common praises to improve your offering.
- Pricing: Analyze how competitors are pricing their products. Are there high-end, low-end, or mid-range options? Pricing can help you understand the target audience and determine potential profit margins.
- Images and Branding: Evaluate the quality of product images, descriptions, and overall branding. Can you improve upon these elements or create a unique brand presence?
- Use Tools to Gauge Demand and Competition Market research tools can simplify your analysis and provide comprehensive data on products’ demand and competition. Some of the most popular tools include:
- Helium 10: Provides tools for keyword research, product tracking, and competitor analysis. Features like the Black Box help you find products with high demand but low competition.
- Jungle Scout: Offers a suite of tools designed for product research, including a product database, product tracker, and keyword scout. It provides data on sales estimates, competition, and product reviews.
- AMZScout: Similar to Jungle Scout, this tool offers a product database, sales tracker, and competitor analysis. It helps assess the profit potential and competitive environment of products.
- Keepa: A price-tracking tool that provides historical pricing data and sales rank data, helping you analyze product performance over time.
By using these tools, you can filter through Amazon’s vast product listings to find profitable items with high demand and moderate competition.
- Evaluate Product Seasonality Some products are seasonal, meaning their demand fluctuates throughout the year. Use Google Trends to assess the seasonality of products and predict when demand will peak. For example, holiday decorations, outdoor gear, and winter clothing may see surges in demand during certain months.
Also, check Keepa’s price tracking features to observe whether a product’s price fluctuates with seasons. It’s essential to understand when a product might experience low or high sales periods to adjust your inventory levels and marketing strategy accordingly.
- Assess the Reviews and Feedback Go through the customer reviews for similar products to understand their pain points and areas of satisfaction. Look for:
- Common Complaints: Are customers dissatisfied with any product features? Use this information to identify product improvements or gaps in the market.
- Product Features: What features do customers rave about? Consider these features when selecting or sourcing your product.
- Rating and Volume: A high volume of positive reviews typically indicates a product with strong demand. However, too many negative reviews might signal issues that could hinder sales.
You can use tools like ReviewMeta or Fakespot to analyze the authenticity of reviews and ensure you’re making decisions based on legitimate feedback.
- Competitive Analysis Thorough competitive analysis is essential to understand how much effort and capital you will need to succeed in a particular market. Examine competitors’:
- Branding: Are there any leading brands, or is the market open for new entrants?
- Price: Are the products priced higher or lower than your target range? Can you find a unique angle to price your product competitively?
- Sales Rank: Use Amazon’s sales rank (BSR) to gauge the popularity of competing products. Generally, the lower the BSR, the higher the sales volume.
- Listing Quality: Assess the quality of the product listings, including descriptions, images, and overall presentation. Can you improve on them?
Use Amazon’s Product Opportunity Explorer tool (available for professional sellers) to get data on sales volume, competition, and pricing trends for any product category.
- Consider Product Sourcing and Profitability Once you have identified a potential product, research suppliers and calculate the total cost of goods sold (COGS). This includes:
- Manufacturing Costs: Can you source the product at a low enough cost to be competitive while still maintaining a healthy margin?
- Shipping Costs: What are the shipping costs from your supplier to Amazon’s fulfillment center (if using FBA)?
- Amazon Fees: Factor in Amazon’s referral fees, FBA fees, and other charges.
Tools like Alibaba and Global Sources can help you find suppliers and get price estimates. Be sure to consider factors like product quality, order minimums, and shipping times.
- Test Your Product Idea Before committing to large-scale orders, consider testing the product in smaller quantities. Running a small ad campaign or a trial launch can help you gauge how well the product will sell. This allows you to test the waters, get feedback, and refine your offering without the risk of large financial investment.
In conclusion, conducting thorough market research for Amazon products involves analyzing demand, competition, pricing, customer feedback, and sourcing opportunities. By using Amazon’s tools and third-party resources like Helium 10, Jungle Scout, and Google Trends, you can gain insights into which products will perform well and identify potential gaps in the market. Once you’ve identified a product with high demand, moderate competition, and healthy profit margins, you can move forward with sourcing and testing it on Amazon.