Amazon product selection dimensions

1. Category Analysis of Product Selection

1. Market capacity

Market capacity is the market demand, and production is determined based on demand.

Sellers should not think that they have discovered a new world just because they have few product listings. Some products may only have around 2,000 listings, and after a few orders, the products can be on the homepage. However, since the market capacity is very small and the demand is limited, no matter what they do, it is impossible to make them a hit.

Market capacity can be determined in the following ways:

• Look at the ranking: The product ranks high in the major category. In theory, products ranked within 6,000 in the major category are considered to have relatively good sales;

• Check search volume: The top three keywords of the product have more than 100,000 searches per month;

• Inventory status: Usually, FBA shows In Stock, which means that the product inventory is at least 20 or more. If the seller adds a large number of items to the shopping cart, such as 400 items, and the average order value is relatively high, it reflects that the sales volume of the product is in a relatively stable state, and the seller is more confident in the listing.

• Review management: The number of reviews is very important, but the rating (stars) of the reviews is even more important.

• Refer to other platforms: Similar products are also sold on other platforms such as eBay and AliExpress.

2. Industry category analysis

Cross-border product selection is like taking the college entrance examination. Whoever can guess the types of questions in the college entrance examination and prepare in advance is more likely to get a high score. The same is true for cross-border product selection. If we can be one step ahead and find potential hot-selling categories first, the next big seller may be you. Let's analyze the popular categories in recent years.

• 3C products: In recent years, the volume of 3C products in Amazon's US market has been growing year by year. Consumer electronics products are a category that has very fast orders. Products with guaranteed quality, attractive appearance and not very high prices are very popular. In addition to consumer electronics products and their related accessories, the market demand for electronic toys and smart 3C products is increasing day by day. Many consumers not only use these products themselves, but also give them as gifts.

• Sports and Outdoors: Sports and Outdoors products are one of the four major categories on Amazon US, because Americans are more enthusiastic about activities, including mountaineering, fitness, golf and indoor entertainment. In addition, sports and fitness is one of the most popular categories under the sports category on Amazon North America, Europe and Japan. Sports and fitness has no obvious seasonality, and there will be a certain increase in November and December every year along with the overall traffic of the Amazon platform.

• Outdoor furniture: During Amazon's peak season every year, outdoor furniture, barbecue utensils and other related products will also be popular and have high profit margins. Among them, the best-selling products are priced between US$10 and US$50, including: foldable tables and chairs, camping tents and camping chairs, barbecue washing utensils, outdoor cooking utensils and accessories, such as aprons, etc.

• Kitchen supplies: Kitchen supplies are used in almost every household, and the market capacity is huge. In the United States, knives and forks are sold in sets and series, so it is particularly important for sellers to pay attention to the details when selling this product. In addition, American consumers have two main needs for bowls and plates: one is solid-color bowls and plates for daily use, and the other is seasonal bowls and plates. For example, in autumn, most consumers use golden bowls and plates, so sellers have to update bowls and plates of different styles according to different festivals. In addition to the above two products, kitchen storage and cleaning supplies are also good choices.

• Auto parts: According to relevant data, the sales of auto parts mobile e-commerce will grow at an annual rate of 25% or even higher, until 2021, when it will slow down to 20%. The market capacity of auto parts is huge, with both opportunities and challenges. The entry threshold of this type of product is high, and it requires resource advantages and understanding of consumers' core demands. In the category of auto parts, the three most important points are product patents, product quality, and professional knowledge.

• LED lamps: Christmas is the most important festival in the peak season in the second half of the year. Most families will buy Christmas trees and various decorative lamps, but lighting products need to be certified. Amazon conducts strict inspections on lighting products on the eve of Christmas every year to clean up those that do not meet the requirements. The UL certification of lamps required by the Amazon platform varies due to different subcategories, and certification of different models of the same product also requires additional fees.

• If lighting products are successful, the sales volume will be very impressive, but the initial investment cost is relatively high. Sellers with sufficient funds and resources can consider it.

• Pet market: According to foreign market surveys: In Europe, 75 million households have at least one pet; in the United States, about 69% of households have at least one pet; in Japan, the economic benefits brought by pet cats exceed 2.3 trillion yen each year. If you are selling cat products, you can consider countries such as Japan and Germany; if you are selling dog products, you can consider the United States, France, Italy, and the United Kingdom.

• Maternal and infant market: In the cross-border export e-commerce market, the United States and Brazil are key national markets for maternal and infant clothing and toys.

• The United States: They prefer high-quality baby products. American mothers also pay more attention to the safety of their children's food and clothing. Brazil: The annual growth rate of the online children's clothing market is as high as 40%, and the fastest growing user group is the middle class. 80% of Brazilian cities have a record of online shopping for children's clothing.

• Health and beauty: With the improvement of the quality of life, health and beauty products have become the second most popular category of global cross-border online shopping. From the analysis of hot-selling products: mainly mascara, eyeliner, nail accessories, nail polish, tattoo and body art, epilator, razor blades, beauty instrument and other supplies. From the analysis of logistics: liquid and paste items are more likely to encounter trouble during customs clearance; but nail accessories, beauty instruments and other beauty gadgets are very convenient whether they are shipped directly or in overseas warehouses.

• Office supplies: According to recent reports from foreign media, the global office supplies market is expected to exceed US$2 billion by 2019. It is expected that the demand for printers and computer supplies will continue to increase dramatically, with a compound growth rate of more than 9% by 2019. Like the maternal and infant market, green and environmental protection are highly respected in Europe and the United States.

• Industry and scientific research: From a global perspective, the volume of commercial, industrial and scientific research supplies has reached trillions of dollars, and MRO is an important part. MRO usually refers to the maintenance and repair of factories or enterprises on their production and working facilities and equipment to ensure the non-productive materials needed for their operation. According to third-party reports, the global MRO market size exceeded US$400 billion in 2016, of which the market size in the United States and Europe reached US$130 billion and US$90 billion respectively, accounting for more than half of the market. In China, there are a large number of factories producing industrial and scientific research materials.

3. Category node selection

When sellers are selecting products, they can first analyze the product through category nodes.

For example, during the Christmas season, there is only one best-selling LED candle light in a category. Sellers can use keywords to search for the top five sales and which categories of products have the best sales. If a product sells 10 orders a day and is ranked outside the top 1,000 in your current most accurate category or outside the top 100 in a small category, sellers can analyze whether there are adjacent categories that can achieve the best sales with 10 orders a day, and strive for the best sales in that category. At the same time, sellers should not change their categories at will. One of your categories must be responsible for accuracy, and the other category is to get the best sales mark. This is an operational skill.

2. Product Analysis in Product Selection

1. Search popularity

The demand for a product can be seen through search popularity. By searching for keywords, you can see the monthly search volume of buyers, and this monthly search volume represents the demand.

After understanding the market demand of buyers, choose a product that is in short supply in the market. What is a product in short supply? It means that the search volume of buyers is many times greater than the number of current competitors. This kind of product usually has its own traffic.

2. Product Trends

People change their clothing as the seasons change, and products are created to meet different needs.

Here is an example: A student said that he had used all the operation skills that the instructor had mentioned, but there were no orders for the product. He opened his link and saw what product it was. In December last year, he sold an outdoor stainless steel kettle. The instructor asked him to use his core keywords to Google to see how many people needed this thing in the current season. Then he checked and said that the current traffic had fallen to a low point. The reason why the student had no orders was that he violated the season. The most popular season for outdoor products is around August to October, and December is when it is icy and snowy. Who would take a stainless steel kettle and run outdoors to use it?

Therefore, trend analysis is very important. On the one hand, it allows sellers to understand the hot period of the product and how long in advance the sellers need to prepare to seize its traffic opportunities. On the other hand, it reminds sellers to filter out products that are not suitable for the current season and not to make wrong decisions in the wrong season.

3. Profit margin calculation

Every Amazon seller knows that to achieve ideal results, there must be enough profit margin. Therefore, when selecting products, sellers must comprehensively consider the costs of all aspects, calculate the profit margin of the product, and comprehensively decide whether to choose this product.

First of all, we need to be clear about the various expenses we may face after joining Amazon. Putting aside the most basic costs of running a company (purchasing, labor, water and electricity), just from the Amazon perspective, we will face these expenses: store rent, commissions, FBA fees, various settlement fees, etc.

Sellers can choose products with high average order value and profits. The recommended profit margin is at least between 30% and 50%.

After all, in the current fierce competition, Amazon's operations are no longer successful with a single-dimensional advantage. To achieve results in operations, you must make full use of various operation skills, and many skills and methods require capital investment. It can be imagined that a product with a high profit margin and a low absolute profit value is not enough to support active operation methods such as in-site advertising.

As the saying goes, knowledge is power, and knowing what a product can bring us is the first step to calculating and maintaining sufficient profits.

4. Pricing Analysis

For example, many stylish underwear brands in China want to sell swimwear on Amazon. Sellers believe that good brands and good quality products should be sold at a price of at least $25. However, the current market price of swimwear is between $10 and $20. Therefore, sellers have to give up because the price range of the platform represents the preference of buyers. If the price range is exceeded, sales will be limited.

Because foreigners usually buy swimsuits in winter and summer, but they use them for vacation, throw them away after use, and buy them again next time. With such shopping habits, if sellers want to make a product with both brand quality and high price, it will not work. The price must be close to the market.

The price is not set by the seller, but by the market. The seller should set the price according to the general price range in the market, rather than just according to their own cost, otherwise it will violate the market law.

So how do you set a price? When you don’t have a product yet and you don’t know the product’s sales price, product cost price, and logistics costs, you can compare them through some channels. For the product’s sales price, you can make a comprehensive comparison through some shopping platforms; for the product’s ex-factory price, you can go to some B2B websites.

In our product selection and development outline, there are also formulas and analysis articles about product pricing. Sellers can go and check out some specific formulas and analysis.

3. Competitive analysis of product selection

1. Competitive product listing analysis

First of all, sellers can understand the listing time of competing products. Generally, if the competing products have been listed for more than two years and the star rating and sales volume are still very high, we do not recommend you to sell such products. Because if the quality of the product is not a big problem, the purchase price is not high, the volume is small, and the top five categories have reached a certain maturity, the seller will have no advantage in selling it. As a new seller, unless you have some new features that can kill it in seconds or subvert it, you will not be able to compete with them.

In addition, before selecting products, sellers also need to analyze the listings and copywriting of competing products. Knowing yourself and your enemy will ensure victory in every battle. Before choosing a product, sellers should evaluate the strength of their competitors. Do they have experience and skills in operation?

Take a pet product as an example. There are only two sellers of similar products on the market. When we took a look at these two sellers, we found that the pictures were very low-quality and the copywriting was very poorly written, so we knew that these were inexperienced sellers.

After analyzing the other party's strength, sellers will be more confident in surpassing its current sales volume when making products. If the competitor is a big brand in the 3C category, do not compete with them head-on, because their brand effect will absorb most (90%) orders in this category.

2. Sales monitoring

In fact, there is no need to say more about this. Why do competitors have good sales? One important reason is that the products are popular and meet the current market demand. Of course, when sellers find that a product has good sales data, in addition to combining product reviews, they also need to see whether the product is a seasonal holiday product, whether these products still have market potential in the future, and whether their own manufacturers have production capacity, how much time is needed to produce and put on the shelves, and whether the product still has sales potential after this time. At the same time, see which model and color of competitors' products have the best sales, which can help you select products and launch new products in the early stage.

If you encounter a situation where only the top 5 sellers have sales, and the top 20 have no sales, you should be cautious about such products. Because the seller may not be able to push to the top 5, and even if he pushes to the top 20, there will be no sales. Such products are meaningless.

3. Review research

First, sellers can check how many reviews their competitors have for their products in the same category. You should know that reviews are an important factor affecting conversions and whether a product can get a better ranking. If you see that the reviews of competitors' products are hundreds or thousands, sellers can consider whether to sell this product, after all, the competition is very fierce. From the perspective of product reviews, you can find products that have good sales but not many reviews.

In addition, for a product, Review is a very good feedback information. We need to know whether the market customers are satisfied with this product. We need to look at the Reviews, find the Listings with more Reviews, list all the good and bad Reviews, and summarize the points that customers are more satisfied with and dissatisfied with for this type of product. We can get the reasons why this type of product is currently popular with buyers from the positive reviews and summarize its advantages. For the unsatisfactory aspects, we can see if we have the ability to improve and optimize the product and sell the points that others cannot do as our own characteristics to attract more customers; otherwise, we have to choose to eliminate the products that cannot be done.

4. Differentiation analysis

Public model products lack uniqueness and are easily copied. Not only do they have no highlights, but they are also copied, which can easily disrupt the operation rhythm. Therefore, when selecting products, sellers should try their best to give priority to products that can be differentiated.

The differentiated transformation mentioned here does not simply mean that it must be a private model product. It means that small-scale changes can be made easily and quickly based on existing products to differentiate the products or have new upgrades. These differentiated transformations can be silk-screen logos, changing parts colors, independent customized packaging, etc.

4. Supply Chain Analysis of Product Selection

1. Intellectual property risk control

If you want to run your store for a long time as an Amazon seller, you must stay away from infringement. This is because infringement is too harmful. At the very least, your listing will be deleted. At the worst, your account may be restricted, or you may even be pursued by the right holder for compensation. The result may be that even if you give up all your previous profits, it will not be enough to pay the compensation!

In addition, if the seller encounters infringement during operation, it will also affect the seller's mentality. If the seller cannot operate with high morale, it will be difficult to succeed. Therefore, the seller must try to eliminate any possible infringement as soon as possible when selecting products.

2. Suppliers

When choosing suppliers, it is generally recommended that novice sellers choose Alibaba first, because everyone is familiar with this platform and can have a better grasp of suppliers. For suppliers, you need to focus on product prices, product production time, product delivery cycle, product quality and other aspects. In addition, sellers need to be wary of second-hand suppliers.

Sellers should try to choose products with high-quality supply chains. High-quality supply chains have three advantages: first, they can ensure product quality; second, if the product becomes a hit, there will be a stable and sufficient supply; third, they can provide support and motivation for product transformation.

3. Logistics cost accounting

Many small and medium-sized sellers may give priority to small and light products at the beginning of their operation, because such products have convenient logistics and low transportation costs. This is true, but it is also because of this that the entry threshold for such products is low, there are more competitors, and the operation of such products needs to face more intense competition. Correspondingly, if you have sufficient funds, you might as well choose products that are large in size, heavy in weight, and require specific delivery channels. The reason is simple, this itself is a threshold, which blocks a considerable number of sellers without strength from entering the door.

Currently, the logistics modes that everyone uses for Amazon are FBA (Fulfilled by Amazon) and FBM (Fulfilled by the Seller). In comparison, FBA has more advantages by relying on the Amazon platform, and both delivery and after-sales service are completed by Amazon, but the cost is higher. If it is self-delivered, it is a little more troublesome, and the seller needs to pack and ship by himself, and the after-sales service is not very guaranteed. Note: When making logistics choices, you should consider various factors such as logistics costs, after-sales and inventory management.

There is a saying on Amazon: 70% depends on product selection and 30% depends on operation. This shows the importance of product selection. Especially for novice sellers, they don’t know where to start in product selection.