How to Find the Best Products to Sell on Amazon in 2020

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So you want to make money on Amazon and need to work out what to sell?

In this article, we explain how to find profitable products to sell on Amazon FBA. We list the main selection criteria you should use to ensure you make money on Amazon.

We also show you how to use Keepa charts to find the best products.

We are mainly focusing on Retail Arbitrage and Online Arbitrage. If you are trying to find a Private Label product to sell please read this article – The Best Private Label Products to Sell on Amazon.


This is what we will be covering in our Retail Arbitrage sourcing guide;


Want to take a shortcut?

We use BuyBotPro to help find winning products to sell on Amazon. BuyBotPro can save you a lot of time and makes sourcing easier.


Our 12 Key Criteria for the Best Products to Sell on Amazon

  1. Best Sellers Rank
  2. Return on Investment (ROI)
  3. Profit Per Sale
  4. Size of the Product
  5. Gated Brands and Categories
  6. High-Risk Brands
  7. Product Value
  8. Low Returns Rate
  9. Which Amazon Categories Should You Sell In?
  10. Product Price History and Your Buy Price
  11. Product Has Appeal Outside of Your Main Selling Platform or Marketplace
  12. Should I Sell If Amazon Has the Buy Box?

1. Best Sellers Rank

This will vary by category but a general rule would be to try and find products with a sales rank under 50,000 and ideally under 20,000. If you have a product with a Best Sellers Rank under 20,000 in a popular category you would expect to sell multiple units per day. Make sure you are looking at the overall category rank, not a subcategory rank.

We have full lists of sales rank for the US, UK and the EU here.

Amazon Main and Sub Category Sales Rank
Amazon Main and Sub Category Sales Rank (BSR)

2. Return on Investment (ROI)

A lot of Amazon sellers focus purely on ROI when selecting products. We have always focused more on the profit per product sold. You can achieve 100% or more ROI (we have some products running at 150%) but I would probably look at a minimum ROI of 30%.

3. Profit Per Sale

You are probably best using a combination of ROI and Profit Per Sale. If you are making a minimum of $10 per sale then that is ideal and gives you room to move when other sellers drop their pricing. If you are only making a profit of $5 or less then when you list the product you may find a competitor drops their price and wipes out your profits.

ROI and Profit Per Sale will most likely be dictated by how much cash reserves you have. If you are cash-rich then ROI becomes less of a factor.

4. Size of the Product

Amazon products fall into two main categories – ‘Standard’ and ‘Oversize‘. If you are starting out and doing your own prep of the products then I would stick to smaller items. They are easier to handle, cheaper to ship to Amazon and also the storage costs and fees will be less. If you need to store any in your home then they will take up less room and returns will be easier to deal with.

5. Gated Brands and Categories

You have probably heard that a lot of brands or categories are gated. This means you cannot sell these products without getting permission from Amazon. If you are a new seller you should focus on the products you can sell and try and make this work first. Use the Amazon Seller App or ‘Add a product’ in Seller Central to find out if there are restrictions before you buy stock.

For a full list of Amazon restricted and high-risk brands please see – Current List of Amazon Gated and Restricted Brands

6. High-Risk Brands

Lots of new sellers are getting suspended for selling these high-risk brands. These are brands which Amazon will allow you to sell but the brand owner does not. The brand owner will take action to try and get you to stop selling their products. This can include legal action or policy warnings via Amazon.

Please do not get suspended. Once you are suspended it is often impossible to get your Amazon account reinstated. If you are at all concerned that a brand might not be safe then remove it from your shortlist and move on. It is definitely worth reading our guide: Identifying Amazon gated and restricted brands to avoid suspension.

7. Product Value

I would recommend staying with products that you can write off if required. So if a customer returns it and you have to dispose of it then your business is not damaged. The ideal price range you should be looking at is about $10 – $40 with a profit of $10 – $20. When you are more experienced you can aim for higher-value products. I would avoid going over about $100 though.

PRO TIP – Some products increase in value once they are no longer manufactured. Buying these products gives you a built-in safety measure if your stock does not sell as expected. You know that if you leave it at the FBA warehouse it will eventually sell for a good profit.

8. Low Returns Rate

Some products have returns rates of 10% or more. Returns cost you money so you need to avoid these products. Particularly avoid products that cannot be fixed up and resold as new once the customer has opened it.

The way some products are packaged means customers will have to damage the packaging to even look at the product. You need to avoid these as they will have to be disposed of or sold at a loss if returned. Look at the reviews on a product and avoid buying a product with less than 4 stars. Also, avoid complex products.

PRO TIP – Aim for tough well-packaged products. They are less likely to get damaged in the warehouse or in transit to the customers. You will, therefore, avoid complaints and possible negative feedback.

9. Which Amazon Categories Should You Sell In?

Most people start with Toys. Toys are simple and usually have a low returns rate. They are also normally low value. You should also consider ‘Home & Kitchen‘ and ‘Office Products’. Electronics is a good category but you tend to get more returns and problems.

This is not personal it is business. However, having an interest or passion in the products you are selling will give you a slight advantage. You will have a ‘feel’ for the products and therefore be better at spotting good deals.

10. Product Price History and Your Buy Price

When you are sourcing products for Retail Arbitrage you should use the Keepa charts to check the normal selling price over the last 12 months. This will help protect you from ending up having to sell at a loss. Check you can buy the product at a price that will allow you to at least break even at the normal selling price.

A lot of new Amazon sellers will get caught out by a temporary price increase which gives a false impression of the profits they can make. When they scan the product it shows $5 or more profit so they purchase it. By the time they come to list the product the price has returned to its normal range and they actually make a loss. Always check Keepa and CamelCamelCamel for the full pricing and sales rank history before purchasing.

11. Product Has Appeal Outside of Your Main Selling Platform or Marketplace

This is not completely necessary but it is a bonus if your product will sell on other platforms like eBay or other Amazon marketplaces. This means if your account does get closed down or the product is not selling you still have options to clear your stock.

For US sellers look for products where you can make a profit in Mexico or Canada for example. For UK sellers you want to get products that will sell in the EU. Read our guide to selling in the EU.

12. Should I Sell If Amazon Has the Buy Box?

People often ask us if they should avoid selling the same products as Amazon. Amazon will share the Buy Box so don’t be put off if Amazon is a seller. If your price and seller metrics are good then Amazon will let you have the Buy Box. Sometimes they will even share the Buy Box when your product is more expensive.

Your main competition is from other FBA sellers. You can normally be about 10% more expensive than non-FBA sellers and still get the Buy Box or get a sale from customers looking to buy with Amazon Prime.

PRO TIP – Use the ‘999’ trick to find out how much stock Amazon has. This is a better indicator of whether they will share the Buy Box. Try and add ‘999’ units of the product to your basket and it should show you how much stock Amazon actually have. If it is ‘999’ then it might be better to avoid this product.

How to Use Keepa Charts

Keepa is a popular chrome extension for Amazon Retail or Online Arbitrage sourcing. Keepa will load directly onto the Amazon listing page and provides many insights into a product’s pricing and sales history.

If you are selling new FBA products then you want to remove the ‘Used’ sellers and make sure ‘Amazon’, ‘New’ and ‘Sales Rank’ are showing. You can view the last 3 months but we also look at the entire life of the product as this provides even more important insights.

How to Read Keepa Charts
How to Read Keepa Charts

The green line shows the Best Sellers Rank and as you can see this can change massively. As a product goes up in price the rank usually gets worse. Also when a product is first released it has a better ranking but usually, this coincides with a lower price.

Keepa chart showing price increase due to no stock
Keepa Chart showing price increase when Amazon has no stock

The example above perfectly demonstrates what happens when Amazon runs out of stock. The price immediately starts to increase as other sellers take advantage of the scarcity. The sales rank also gets worse as the price increases.

PRO TIP: You may also see that in the run-up to Christmas the price will increase if stock becomes scarce. This means that this product might be good to buy in bulk now to sell at Christmas. Even though you cannot make a profit now sometimes it will sell for 3 or 4 times its usual value in Q4.

What to Look for When Using Keepa Charts

1. Is It Popular at Christmas?

Keepa Q4 Christmas Price Increase
Keepa Q4 Christmas Price Increases 4x

Is it a product you should stock for Q4 (Christmas) – does it increase significantly in price between October and January? In the example above the Fisher-Price Little People product could be purchased from Amazon for $20 in summer and then sold for $80-$100 at Christmas.

2. Is the Current Price a Temporary Blip?

What is the normal selling price over the last 3 months? You may have found a product that on the face of it looks profitable but the current selling price may only be there for a few days. It then reverts back to the regular price and you make no profit.

3. Is the Product Regularly out of Stock?

If Amazon runs out of stock quite often, which is shown by the clear areas, then it might be an opportunity to buy the stock now ready to sell at a higher price when Amazon runs out. If all sellers run out of stock regularly this is even better as it means you can sell in these gaps probably at a much higher price.

4. Is the Product Discontinued?

If Amazon has stopped selling the product completely and the price is gradually increasing and the number of sellers decreasing then it usually means the product is no longer manufactured. If you can still source the product cheaply then this is a great option to stock up and sell for a good profit.

5. Set a Price Alert

Keepa chart showing Pricing Alert
Keepa chart showing when to set a Pricing Alert

Spot the lowest price Amazon tends to sell at by looking for the orange line dipping. In the example above for this Corsair Gaming Headset, the price sometimes drops to $20 and this product has been listed for as much as $149. You can then set a price alert in CamelCamelCamel or Keepa and they will email you when the price next drops. You can buy stock at this low price and then sell back on Amazon when it increases again or even sell on other marketplaces.

Buying from Amazon to sell back on Amazon is known as ‘Amazon Flips’.

How to Work out the Monthly Sales Volume for an Amazon Product

Nobody except Amazon knows the exact figures. There are a lot of factors like selling price, FBA vs FBM, time of year, stock levels, seller rating which will dictate the amount you actually sell.

There are tools you can use to get a better idea though. On slower selling products changes in rank on the Keepa charts can often indicate a sale.

These are free tools which will provide an estimate of monthly sales on Amazon;

Jungle Scout Estimator
Amzscout Estimator

As you can see if you test the same ASIN in both they give varied results so you may need to take the average.

Do the Opposite of Other Sellers to Find Profitable Products

Most new sellers are probably choosing products based on the criteria listed and I would recommend you do the same to start with. If you can make money on these products then you have made Amazon FBA a success and you can start looking at additional strategies.

However, if you are confident and already have some experience selling online you could do the opposite of everyone else. For example, not many sellers will want to deal with large bulky products or high-value electronics. This creates an opportunity for those sellers that are prepared to do it as there is less competition.

OUR CHECKLIST FOR THE PERFECT PRODUCTS TO SOURCE FOR AMAZON FBA

1.✅  Sales Rank under 50,000.
2.✅  ROI over 30%.
3.✅  PPS (profit per sale) over $10.
4.✅  Size – smaller the better. Avoid ‘Oversize’.
5.✅  Gated Brands or categories – avoid until more experienced.
6.✅  High-Risk Brands – any doubts then avoid.
7.✅  Value – between $10-$40 is the sweet spot.
8.✅  Products that will maintain value or increase in value.
9.✅  Low returns rate – look for an Amazon review rating of at least 4 stars.
10.✅  Categories – start with Toys, Home, or Office and build from there.
11.✅  Buy price – ideally below RRP/SRP or the average sale price over the last 3 months – and still be able to at least break even.
12.✅  Wide appeal – bonus if you can sell on other platforms like eBay.
13.✅  You can beat other FBA sellers on price and stock levels.

Summary

Being successful selling on Amazon will mean using the right tools to find the right products and then using the right strategies to sell those products. We have a full guide to the best sourcing tools here. You will need at least one of these tools or you will waste a lot of time. We currently use Tactical Arbitrage and BuyBotPro to source products for online arbitrage.



Hopefully, the checklist and criteria above will also help you focus in on winning products.

If you have any suggestions for other strategies or product criteria not mentioned please take the time to post a comment below. This will help fellow Amazon sellers make the right choices.

You are also very welcome to join our friendly and supportive Amazon Facebook Groups;

Amazon Selling for Beginners – for those starting out on their Amazon selling journey.

Amazon FBA Masters – for more experienced sellers and those looking at starting in Private Label selling.

Useful Resources

Amazon Best Sellers Rank (BSR) Charts for the US, UK, Canada and Europe

A full list of gated and restricted brands: Current list of Amazon Gated and Restricted Brands

The 5 Best Amazon Product Sourcing And Selling Tools

If you are looking to find a Private Label product to sell please read this: The Best Private Label Products to Sell on Amazon

Good luck and Happy Selling!

James 🙂

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