After the previous initial screening process, we should be able to determine a product category that is more suitable for us. What we need to do next is to conduct a secondary or in-depth screening to determine the product category we need to continue to dig deeper, further narrow the scope, and select 3 to 5 products that we like to create. What are the screening criteria for the final product?
The sales price is preferably between 20 and 50 US dollars
First explain why the lower limit of the sales price is set at 20 US dollars. According to the “10x10x1 rule”, if you want to achieve a gross profit of 10 US dollars, it is difficult to sell products priced below 20 US dollars. If the gross profit of the product is too low and the sales volume is not increased, the value of the work cannot be shown.
The upper limit of the sales price is set at 50 US dollars mainly to consider the issue of capital cost. It is not that high-value products cannot be sold. If you have strong financial strength and a strong supply chain, you can also consider it, but the corresponding risk factor will be much higher. Moreover, in the later operation, it will be more troublesome to do some product evaluations. The cost of obtaining evaluations and rankings is too high, which is not conducive to the promotion and evaluation work.
Monthly sales volume is preferably 300~900
Monthly sales volume is designed according to the “10x10x1 rule” mentioned earlier. Now Amazon has passed the early stage of development, the bonus period has gradually subsided and is slowly moving towards maturity. In the mature stage of an e-commerce platform, only vertical market segments, that is, the long tail market, have opportunities.
The long tail theory means that as long as the storage and circulation channels of the product are large enough, the market share occupied by products with low demand or poor sales can be comparable to or even larger than the market share occupied by a few hot-selling products, that is, the convergence of many small markets can generate energy that can compete with the mainstream market. In other words, the sales volume of an enterprise does not lie in the head of the traditional demand curve that represents “best-selling products”, but in the long tail that represents “unpopular products” that are often forgotten.
The number of reviews for most competing products is preferably within 10,000
This screening condition is easy to understand. Amazon has very strict control over reviews. Even the act of giving away products in exchange for reviews is strictly prohibited, and Amazon will delete suspicious reviews regularly every month. The cost and difficulty of obtaining reviews for Amazon sellers are getting higher and higher. In contrast, if the number of reviews for competing products is in the tens of thousands, it means that this category is very saturated, the competition pressure is very high, and it is difficult for novice sellers to get a share.
FBA products should pay attention to the weight and size requirements
There are two main considerations for the size and weight of products.
On the one hand, considering that FBA first-leg transportation (from China to the Amazon warehouse in the destination country) is mainly divided into two modes: sea transportation and air transportation, it is recommended that novice sellers who have just entered the industry mainly use air transportation. It is not cost-effective to use air transportation for those products with large volumes. It is best not to do it in the early stage of products that can only be shipped by sea. The reason is simple. Although air transportation is more expensive than sea transportation, it has a faster turnover, which is conducive to the rapid recovery of funds and the formulation of inventory plans. Sea transportation takes too long and there are many uncertain factors, and it is difficult to make inventory plans. There is still a great risk for novice sellers to start with sea transportation products.
On the other hand, Amazon’s warehousing and delivery fees should be considered. Amazon will classify the charges into 6 levels according to the size and weight of the products delivered to the warehouse by the seller, and the product conditions will be divided into 6 levels, thus charging different fees.
For product selection, it is best to control the size and weight below the larger standard size (Large Standard-Size). Once the product exceeds this size, its warehousing and delivery costs will be very expensive.
Brand concentration analysis
Brand concentration analysis means that when we select a certain product, we need to pay attention to whether there is a monopoly of big brands in the product market. How to investigate specifically? First, we can find several core keywords of the selected products, and then put the keywords into the Amazon search box for search. If most of the products that appear below belong to several big brands, then this product should be carefully considered.
For example, when we search for “Electric Toothbrush (electric toothbrush head)” on Amazon, you will find that many of the products that appear on the search homepage are Philips and Colgate. In addition, some brands may be big brands overseas, but you may not know it. Therefore, if you find that the first few products on the search homepage are all of the same brand, it is best to search for this brand on Google. If Amazon self-operated products (Sold By Amazon) appear multiple times on the product search results page, you also need to choose carefully.