For Amazon sellers, the initial judgment of product selection is mostly based on subjective judgment and consideration. To choose a product that is suitable for the market and yourself, you must go through a series of product market data analysis, such as product investment return, product profit margin, competitor and product keyword searches, etc. The following will share with sellers the issues of data analysis and product selection.
1. Return on investment.
This is a more important point in product selection. Products with a good return on investment are far better than products with large profit margins, but many people tend to make this mistake. They calculate the profit margin of the product but not the return on investment of the product.
To give a simple example, the profit margin of product A under similar products is 40%, and the profit margin of product B is 30%. It seems that product A is better, but the return on investment of product A is 60%, and the return on investment of product B is 120%. Therefore, just looking at the profit margin, we will all choose product A, but if we look at the return on investment, product B will be much better than product A.
2. Product profit margin.
This is directly related to the price band of product pricing, as the price of a product is usually three times the cost of the product + shipping. Otherwise, the profit margin of the product will not be large. Factors that also need to be considered when pricing products are store advertising fees, postage, storage fees, etc.
3. Competitors’ situation.
As the art of war goes, know yourself and your enemy, and you will be victorious in every battle. Before choosing a product, understanding your competitors is also a very important link. If you don’t want to bear too much competitive pressure, you’d better find a competitor with a rating lower than 100-150. The reason is also clear. Customers rarely leave reviews. If your competitor has a lot of reviews, it means you can’t beat your competitor easily.
If the competitor’s product reviews are already around 1,000, it can basically be judged that the market for this product has been occupied. It doesn’t make much sense to go in at this time. Because the competition is huge, the investment is huge, and the competitors are strong, it is not in line with our goal of selecting products.
4. Keyword search volume.
You can only have a business when you have demand. If you want to sell a product, you must ensure that there is still demand for the product in the market. The most direct way to reflect product demand is the search volume of product keywords. Search volume means demand. Of course, we should also ensure that the monthly search volume of the main keywords of the first three products we choose should not be too low. In terms of keyword analysis, there are many tools on the market that can help us see search trends in search volume for selected keywords.
Finally, sellers should pay special attention: do not choose seasonal products or products that are too closely related to the season. This is easy to understand as we cannot rely on product sales during a specific period to support ourselves or keep our store profitable. At the same time, I hope that the above content can help sellers avoid pitfalls and detours on the road to operation.