Amazon continues to grow every single year.
In the process, it’s making millions and millions of dollars for sellers all over the world. You’re probably reading this because you figure it’s high time you get some of those profits.
Well, you’re in the right place. Because today, I’m going to tell you six very important ideas you need to consider before choosing your first product to sell on Amazon.
Price Points and Margins
Amazon is a game of margins. The better your margin, the more profit you make on each sale. This opens up all kinds of opportunities to buy more inventory, invest in new products, advertising costs and more.
For your first product, we strongly recommend a price point above $15. This is for two reasons.
First, if your product is below $15, you’re unlikely to make much profit when you sell it, given the costs of shipping and marketing. Also, if you’re only making $1 – $2 per sale, you need a LOT of sales to make any real money. This means you have to be ranking high on Amazon, which won’t happen until you have a lot of sales.
With a better margin, you make more money with less sales, which is exactly where you want to be as a beginner.
Another factor to consider is how much your product weighs. The more it weighs, the higher the shipping cost will be. This cuts into your margin.
On the other hand, the high shipping costs means there’s a large barrier to entry, meaning most likely less competition. So if you find an amazing product with a great margin that’s heavy, it’s still worth looking into.
Name Brand Recognition
Competition on Amazon can be ruthless. So before you pick a product, you want to look into your competitors. Is there already a brand-name leader that is dominating the market? For example, if you sell glue, the first brand most people would buy from is Elmer’s.
However, just because there’s a well-known brand in the market doesn’t mean it’s impossible to compete. For example, even though Elmer’s may dominate glue, there are submarkets within that niche you may be able to take over.
For example, you may be able to sell a 100% organic glue made from coconut oil. The point is, if there’s a demand in the market that the larger brand ISN’T solving, it’s a major opportunity for you.
This is where it pays to track trends. Lately, people prefer to buy “green” products that are carbon-neutral. If there isn’t a current option for that in the niche you’re looking into, it may be worth looking into.
Quality Product Sourcing
Although this one may seem obvious, most Amazon sellers overlook it. The fact is, everything on Amazon becomes easier when you have a quality product. A product that genuinely is better than the other options out there.
When that’s the case, you’ll get 5-star reviews like crazy. And you’ll also get a boost in the rankings as your feedback exceeds your competition’s. For this reason, don’t go into selling on Amazon unless you’re committed to really learning the market and figuring out how to improve on the customer experience somehow.
This is another obvious idea that most Amazon sellers skip. It’s even true for sellers with profitable stores. Before you sell a product on Amazon, you should have a keen idea of exactly who your target market is.
- You should know what gender they are
- What age range they fall into
- What kind of “social class” they may identify with
- What kinds of sports teams they like
- What music they like
- Why they are even looking for this product
- What problem they hope it will solve
- What problems your product solves that may keep them up at night
In marketing, there’s an idea of creating a “customer avatar”. This involves doing in-depth research on your customers and building up a profile of who they are. In many cases, the best way to create a customer avatar is to call up your customers regularly! Ask them why they bought your product and what problems it solves for them.
Why should you research your customer this thoroughly?
Because you can then target ALL your marketing towards the people who want your product the most. You can feature pictures on your listing that show your product in situations your ideal customer is likely to use it in. You can write bullet points that directly point to their desires and why they are buying the product.
You will find many of your marketing problems are solved when you know enough about your customer, so please do not skip this step.
Build Your Email List
When people find your product on Amazon, they’ll often search for it on Google. They want to get a confirmation that it’s a great product from another source – especially if they’ve never heard of your brand before.
If you have a new brand, your website (if you have one) will show up #1 on Google.
This means Amazon will actually be sending you traffic to your website!
On your website, you can offer people a discount or information in exchange for their email. You’ve now started building a hotlist of people you can market to who have proven they want your product. You can then use this list to get reviews, make more sales, and even launch additional products.