How to find a Private Label product to sell on Amazon
With more people discovering the world of private label selling on Amazon’s FBA “Fulfillment By Amazon” marketplace, a common question is “how do I find a good private label product to sell on Amazon?”
In this post, we will discuss exactly how to go about building a list of product opportunities to explore so you can move forward with selling on Amazon.
Step 1: Use Amazon as your Starting Point
Amazon is where you want to sell your products, so Amazon is where you should go to see what people are looking to buy. Rather than scratch your head wondering “what should I sell”, approach it from the angle of “what do people WANT?”
How do we find out what people are searching for on Amazon?
Look at these sections:
Amazon Hot New Releases
Amazon Hot New Releases
The Amazon Hot New Releases list displays products across all categories that have just entered the Amazon marketplace and are already “selling like hotcakes.” This gives you an indication of what is in demand right now, and may not be an indication of success over time, so take this information with a grain of salt.
Amazon Best Sellers
Amazon Best Sellers
Amazon Best Sellers lists the top 100 best-selling products in each category. This is updated hourly and based on sales velocity. You can see what products are selling consistently well over a longer period of time. You can drill down into sub-categories to get even more ideas and inspiration.
About Best Sellers Rank: Many first time PL (Private Label) sellers will look at BSR (Best Sellers Rank) to estimate sales volume for a particular product.
Best seller rankings are variable depending on the category. The drawback to using this as a selection criteria is that popular categories such as Home & Kitchen and Electronics will have a broader range than a less popular category such as Industrial & Scientific.
When you are looking at BSR, be aware of the product category you are evaluating and use tools like JungleScout or UnicornSmasher to give a rough estimate as to what a product is selling month to month. These estimation tools tend to exaggerate the sales volume. Actual sales will usually be less than forecast as so many other factors will come in to play.
Also using a browser plugin tools like CamelCamelCamel and Keepa will enable you to view a product’s BSR over the sales history of that product to give an idea as to how it ranked. These tools are also helpful for highlighting seasonality patterns on specific products.
Movers and Shakers
Amazon Movers & Shakers
This is like a sub-category of Best Sellers. It shows trending products that are moving quickly up the best-selling ranks denoted by green arrows and a percentage increase (kind of like stock signals). This is valuable for pinpointing best sellers that are trending more so than others in a category.
Most Wished For
Amazon Most Wished For
Amazon keeps track of what people put on their wish list. This is what people REALLY want. So why not use this list as inspiration for providing them exactly what it is they have always been looking for?
Amazon Gift Ideas
Amazon has gift wrapping services available and allows merchants to provide this service for their customers. Being as such, Amazon tracks the sales that include gift wrapping, so they know what products are being bought as gifts. This is another indicator of the popularity of the products.
Note that not all products listed in these sections will be “FBA eligible.” Generally speaking video games, DVD’s, and board games, for example, cannot be sold through FBA.
Pro Tip: If you are a private label seller using Amazon FBA, you should have “gift wrapping” and “gift messaging” checked in your seller central backend for your products! This doesn’t cost anything to you as a seller, and people love to have options. Giving your customers the ability to give your product as a gift is another value-added benefit that can set your product apart from the competition and will result in more sales.
Step 2: Use These Basic Guidelines for Product Selection (for your FIRST product)
1. Make sure the product is “Smaller than A loaf of bread” and “Lighter than a pair of Shoes” – you want to have a product that is not going to cost a lot in shipping, and because shipping costs from overseas tend to be based on unit volume, you need to be keenly aware that shipping larger products will cost you more and eat into your profit margin. Also, remember that Amazon has an oversize limit and this limit is 18 inches x 14 inches x 8 inches. If you go oversize, you will pay a lot more in storage fees which you do not want, especially on your first product. Also, sellers often get caught out with stock levels on their first product. It is a big advantage to have a product that can be priority shipped by air in an emergency without killing profits.
2. Select a product with low seasonality. This means you want to pick a product that can be sold year round and has year-round demand. Selecting a product like Halloween costumes would limit you to only 30-60 days before demand dropped significantly. Having seasonal products also severely limits your cash flow which will prevent you from scaling your brand.
3. Select a product with no licenses, trademarks, or patents. The last thing you want is a letter or call from a lawyer asking you to cease and desist selling your product on Amazon after you have invested thousands of dollars! Use the United States Patent and Trademark Office database (called TESS) to search for existing trademarks. Google has a patent search tool which can help you locate patents on a specific product.
4. Not electronic or operated by batteries (of any kind, but especially lithium).
5. Product reviews indicating low to moderate competition relative to the category (generally speaking, between 0-500 reviews)
Pro Tip: Look at the number one product on page one and record the number of reviews. Then look at the rest of the products on page one. What is the range of reviews on page one? If one product has over 500 reviews, but all the others have under 500 reviews, then there is room for you on page one and it is likely you will be able to compete for one of these page one spots.
6. Choose a product that has a sales price point between $20 and $80 USD. Consider that Amazon takes a big chunk of your gross profit in fees. Expect to pay Amazon anywhere between 35%-50% of your gross profit in fees (closer to 50% if participating in Sponsored Ads or Amazon Marketing Services). Understanding that generally, the higher the price range, the higher the profit margin but also, the more you will have to pay for inventory. This is a business consideration that you will have to take into account.
7. Try and select a product that exists in a category that has room for improvement. Either by improving the listing quality, or improving on the product itself with enhancements. Look at products where the average feedback rating is below 4.0. This means you have the opportunity to tweak the product and hopefully outsell the existing products which have problems. You should actually read the reviews on of the product to see what the problems are and whether it is something that can easily be rectified.
8. Finally, Remember you are building a brand. Look for products that you can build a brand off of and that are not just “one-off” or “flash in the pan” types of products. For example, maybe you decide you want to sell a dog collar. Dog collars need dog leashes. And Dog leashes might need dog harnesses. If you have a dog, maybe he is old and needs some all natural supplements. Pretty soon you have a brand that is selling a range of products all around the topic of “dogs.”
The opposite to this would be to pick a fad toy that may be popular for a year or two at best, and then as more competition floods the space, it rapidly becomes a race to the bottom in terms of price. This is something you want to avoid as a private label seller. The point is – think long-term sustainable profits, not short-term skyrocket sales.
Step 3: Create a Spreadsheet in Google Sheets and Build a List of your Top 10-20 Products.
1. Open up Google Sheets
2. Using the guidelines above, start compiling a list of products that meet these criteria.
Private Label Product Ranker
3. You can use our PL Product Ranker as a tool to help you list and score your opportunities. This will help you to focus in on a great product to sell Private Label.
Simply fill in your email and we will send you a copy of this awesome tool instantly!
Step 4: Use Amazon-Specific Data Mining Tools to Conduct Your Analysis, Rank, and Select a Product
There are several tools available now to Amazon sellers to cut your research time drastically. The way you use these tools can mean the difference between picking a winner or picking a dud, so let’s be sure we understand how each one works and what you can use it for:
1. JungleScout Pro – We will use this tool to determine the average selling price, an average number of reviews, average feedback score, and your estimated net profit after FBA fees.
2. CamelCamelCamel – Use this tool to scope out best sellers rank over time for a product.
3. MerchantWords – We will use this tool to look at the popularity of the keywords associated with your product. Type in your main keyword and look at the estimated monthly traffic volume on Amazon for that product.
4. Google Trends – Use the Google Trends site to determine if there is seasonality to your product. If you see peaks and valleys in the trend over a 1 year period, it means there is seasonality and you should not select this product.
5. SerpStat – Use Serpstat (free to trial) to easily find related keywords associated with your product and find other related traffic growth trends.
As you can see, selecting a good product to sell on Amazon is a process, but it is not difficult. With the proper tools and strategy, you can easily build a list of viable candidates to select from and begin the process of sourcing your chosen private label product.
Now it’s your turn! Use this guide as a starting point. Remember do not be tempted to skip any steps. And be sure to check out our Facebook group the Amazon FBA Masters
About the Author
Kindra Martinenko created her own successful Private Label brand and is now a 6-Figure seller on Amazon and other platforms. She is the CEO of Active Action Brands, LLC – a Digital Marketing company specializing in eCommerce marketing, Amazon listing management, and Business Coaching.