Products perfect for private labeling and FBA service have 2 things in common:
- Great physical specs
- Great market conditions
Let’s look at these two things in more detail.
Great physical specs
A few pounds, max. The lighter, the less money you lose on shipping and duty fees.
Fits in a shoebox
Better yet, in your pocket. This avoids excessive shipping and Amazon storage fees down the line.
Profitable to sell
Your costs leave you margins. Aim for a retail price of $20 to $100. This leaves room for profit but isn’t expensive enough for buyers to have to speak to anyone before making a purchase. Make at least $10 profit on a $20 product.
Check out Google Patents to get a sense of whether your item has been patented, or has other IP issues. This isn’t legal advice; consult a licensed attorney.
Brandable and customizable
You can improve its physical form without great expense. For example, you should be able to add a brand logo to it, a helpful modification, a handle, or foam coating. Fixed form factors leave less room for differentiation, which is bad.
Not available at Wal-Mart
Ideally, buyers can’t get this item in big box stores and so must buy online — which means Amazon, which means you.
No instructions needed
The customer should know what to do as soon as it comes out of the box.
Product can be re-ordered
If it’s something that can be used, enjoyed, and re-ordered, that’s even better. The second purchase is easier to make than the first.
Consider avoiding charging and batteries, as more can go wrong. Tech that doesn’t work will have a negative effect on reviews down the line.
Passes a stress test
Could it survive a drop from a building? Is it safe in the hands of a toddler? If so, it’s not likely to break during shipping or with a customer, resulting in better reviews and fewer customer service issues down the line.
Great market conditions
No household names
If there’s a strong brand that people associate with the product keyword, stay out. Duracell. Kleenex. Sharpie. This isn’t always the case, though. Sometimes a dinosaur market needs an asteroid or two.
The product has multiple keywords
The product is searched for, found, and purchased through various keywords. You’ll benefit from this when it comes time to optimize your listing for search and Amazon paid ads.
On the upswing of a trend
Check Google Trends for the product ideas you’re considering. Are they going up or down? If they’re ascending because of consumer preferences or current events and the trend will continue, that’s good.
You can build a brand around it
The product you pick should be the start of a cohesive product line. It shouldn’t be a one-off, after which you sell something different. Make it part of a larger vision because you can cross-sell customers who buy initial product A with similar product B.
Presentation can be improved
You can improve on the branding, presentation, packaging, and information provided by competitors. You’ll know if this is the case page 1 for the keyword will look, well, ugly. Unoptimized. Short titles, poor quality photos, priced too high, priced too low.
Track the competition with software
Are there other sellers using Fulfillment by Amazon with high monthly revenues? Use a tool like Jungle Scout to read revenues. And/or add 999 units of products to your cart, so that Amazon tells you the real amount of inventory. Do this over the course of a week and see what sort of units they’re moving. Also, use the Chrome extension Keepa to track the BSRs (Best Seller’s Rank) of various Amazon products. In Keepa, you’re looking for a history of low BSRs. The lower the bar is (i.e. the closer to BSR #1), the better the product has performed over time.
Revenue per review. High revenue is ok, but high revenue and low review count is better. Here’s how to calculate RPR:
- Find the market leader’s monthly revenue (e.g. the top seller makes $24,000).
- Divide their revenue by the number of reviews they have (e.g. $24,000/45 reviews).
- The RPR (revenue per review) is $533. That’s a great RPR. What does it mean? If you compete with a similarly optimized listing, for every review you get you “earn” $533 if you eventually overtake that competitor.
This is a very good starting point and helps you in producing clear ‘YES/NO’ decisions when looking for private label ideas.
Just know that low RPR is bad; high RPR is good.
See also: HEARD ABOUT PRIVATE LABEL?