Amazon has forever changed the way we look at traditional retail. With more and more big box retailers closing stores, it is pretty obvious that the future of retail is an online one. But you should be asking yourself one major question: where does Amazon get most of its products? The honest answer? These products are competitively sourced and sold by businesses that often aren’t related to the product’s business. In fact, most of these products are competitively sourced from major brands, resellers, distributors, and wholesalers, at the cheapest price possible. Years ago, it was easy to get started and make money on Amazon.
That’s not the case anymore
You can still have profitable businesses on Amazon, but it takes a lot of research and planning to do it well. It’s even harder to find profitable opportunities on branded items. But there’s a huge opportunity in reselling branded products. You don’t have to worry about educating the market because they already know about these products. If you manage to source branded items at a solid price, it’s easy for you to turn a profit. It all starts with choosing the right product. Your first thought may be to look up an item that is really popular and start selling it.
The trick is to identify profitable niches that aren’t saturated. Buying an extremely popular at a price that doesn’t leave much room to make profit is an easy way to waste money and get stuck holding depreciating inventory. Here are a few things you should be looking for:
1. High Profit Margin Items
Any item you select needs to have a big enough profit margin to cover its cost to you, Amazon fees, shipping costs, and any other costs you will incur. Items with extremely low prices and margins can be trouble as they don’t leave you much wiggle room if something goes wrong.
2. In-Demand / Popular Items
Remember when we told you to avoid popular items? We were only partially telling the truth. Popular items are good, but you need to leave yourself enough room to make a profit. As a rule of thumb, any item you want to sell should be reasonably popular in a main category, or an in-demand item from a subcategory.
3. No Big Brand Presence
It’s nearly impossible for you to compete against major brands if they sell on Amazon themselves. Always look for niches that lack the presence of a big brand because these are the ones that you will be able to compete in. Consumers are more likely to buy a branded product if the company itself is selling it.
4. Durable Items
Durability is a big thing on Amazon. If your items are cheap and break easily, your reviews will suffer and this will damage your reputation. You will want to test any lesser known brands that you may be looking to sell. Be rough on them and give them a solid stress test to make sure that they can hold up. This will help you identify durable items with high profit margins, providing you with a much needed competitive edge over resellers that try and flip non-durable items.
5. Avoid Seasonal / Trendy Items
Do you remember the fidget spinner craze? Sure, a lot of people made a killing early on, but for every success story, there is a person with a garage full of worthless fidget spinners. Avoid seasonal and trendy items, because when the bubble pops, you will be left with a massive inventory of worthless product.
6. Strong Keyword Volume
SEO is very important on Amazon. Product keywords should have over 100,000 monthly searches before you even consider them. Low volume keywords are too risky and can require a lot of time and resources to get off the ground.
No one gets rich overnight on Amazon. Those days are over. If you want to make it, you have to be willing to put in the time and research products. Luckily, there’s a new platform that does exactly that.
This interactive platform uses shopping insights to help you make informed decisions on what products you should sell online. Sourcing issues are a thing of the past with Algopix. Algopix is extremely easy to use. Other platforms often require you to already know a decent amount about the products you are thinking of selling. Yes, it is important to know these details, but Algopix saves you time in the early stages: study competitors, track supply and demand, and find profitable products. On Amazon, end prices fluctuate, but sellers can always control their inventory cost by utilizing a tool like Algopix to find profitable products.