How To Verify Market Demand For Amazon Products – FBA Sellers Guide
When you perform product research on amazon you find many results that have high-profit margins and low competition.
But it won’t matter if there isn’t anyone looking to buy your product.
That is why it is very important to precisely estimate the market demand for your product.
There are effective methods to measure the demand for a certain product and we are going to cover each one of them below.
They are excellent metrics to ease out the risk in your Amazon product research phase.
1) Price
Products of $20-$40 lie in the quick buying decision range. At this price range, the customer wouldn’t spend time trying to figure out the best product. As long as he thinks that the product is a good fit, you win.
To draw in a bit more context, let’s take two examples.
Example 1: A product with a selling price of about $20 can be easily sourced from China for about say $4. For sourcing 500 products it would require about $2000. Looks easy, isn’t it?
Example 2: A product with a selling price of about $100 can be easily sourced from China for about say $25 For sourcing 500 products it would require about $12500. A higher initial cost!
2) Sells at least 10 products per day
Suppose I choose a product with a selling price of $30 that sells about 10 units per day and I get a profit of $10 after the Amazon FBA fees, shipping, promotions, etc
The net gross I make per month is $30* 10 units * 30 days = $9000.
And if it all goes according to the plan, I get a profit of $10 * 10 units/ day * 30 days/ month = $3000 per month in profits.
The better the average sales units per day, the better the profits. However, baseline criteria choose products that sell a minimum of 10 units per day.
3) Similar products have a BSR of 5,000 or lesser in the main category
Figuring out how often a product sells is the most difficult thing to do.
The best seller rank is a close fit for understanding how well a product sells within its category.
For example, a product with a BSR of 20,000 is going to sell a lot less than a product in the same category with a BSR of 2,000.
The last thing you would want to do is choose a product that sells only a meager number when you hit the top spot.
Having 3-5 products that have a BSR ranking of 5000 in the main category can ensure that you will sell a huge number of products once you reach the top spot. More the number of products with low BSR rating, the better the chances of success.
You can see that the product is actually in the 421 positions in the ‘Baby’ category. Since ‘Baby’ is such a huge category you can be super sure of selling a good number of units.
To find the right revenue and sales estimates for a particular product, you can use automated premium tools for amazon product research, which estimates the lowest as well as the maximum demand of the product in their respective categories.
4) Top 3 product keywords together have 100,000+ monthly searches
One of the other important ways to find whether there is enough customer interest in your product is to find out how many users are searching for your product on Amazon or Google.
What is more crucial is to find out the demand for your primary keywords in Amazon since data suggests that Amazon typically has a conversion rate of anywhere between 12 – 17%.
So if our top three product keywords together get over 100,000 monthly searches in Amazon, then it is a good sign that there is enough demand for us to sell.
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5) Lightweight ( must be under 2-3 pounds)
The heavier the product, the heavier the FBA fees. As the size and the weight of the product go higher, the profit margins go lower.
Shipping costs can get very high if the product weighs more than 2 pounds. Let’s take the example of the bag we considered before.
It is about 9.9 ounces – read affordable shipping!
6) About 2-3 products with less than 50 reviews on page 1
The number of reviews on the first page can help you understand how difficult it is for you to gather sales,
Although it is not a very important rule, especially in categories where there are good sales. The number of reviews can still help you understand how easy it is for you to secure the top spots.
The more points in the checklist you can verify, the better. Though they are not strict rules to be followed they are the basic criteria that are recommended for a successful start.
7) Is there Seasonal Demand
This is crucial information to know while doing Amazon Product Research.
Do you have a product that is only purchased during a particular season? Are people buying this product consistently throughout the year?
The best way to determine this is to head on over to Google Trends and type in the main keyword for your product. Once there you will be able to see if your product is seasonal or not.
If your product is seasonal then you will see big dips in the line graph, an example of a seasonal product is pictured below.
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An example of a non-seasonal product is one with small swings and consistently bought throughout the year.
Determining if your product is seasonal or not isn’t very hard, but it is important to make sure that you know before you make an order since you may have stocks stuck in warehouses if it is a seasonal product.
Some people don’t mind selling seasonal products, but I would rather sell all year long.
9) No big brands in the product category
This is something that deals exactly with buyer mentality. A shopper will obviously choose a famous branded product over a new product or brand.
Rather than trying to compete for a product that already has famous brands, and competing with them for the sales, it is better to start on with a product that has relatively lesser competition.