How to Evaluate Product Opportunity Potential

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How to Evaluate Product Opportunity Potential

Purpose

This lesson teaches you how to quickly evaluate the potential of a product you already have or

are thinking about on Amazon, to see if it’s worth pursuing.

Usefulness of Evaluation

There are 3 key reasons why Product Opportunity Potential is useful to know:

•    You’re already selling one or more products (pick one): I’ve shown you how to pick out good opportunities on Amazon for selling physical products, but maybe you’re already running an ecommerce store, selling products on Amazon or already have some physical product that you’re selling and you want to know if it’s worth selling on Amazon using the Private Label business model. If you’re selling a number of products, you might want to know which one to focus on because you should focus on only one for right now. In this case, it may not make sense to go digging through categories, so this is how you can determine whether or not any product is worth selling using this business model.

•    You have access to a product: Maybe you have access to a product through another means; possibly you know someone who manufactures, supplies, or can label it for you it.

•    An opportunity comes your way to sell a product: Possibly, down the road or right now, people will understand that you’re an expert on selling products on Amazon.

When you get done with this 8-week program, people may be throwing opportunities at you left and right, so if an opportunity comes your way to sell a product (maybe someone wants to do a partnership deal) then you’ll know if it’s worth your time pursuing.

Evaluation Steps

1.    Does the product have private label potential?

Can the product be easily and inexpensively made your own? You want a product that can be put inside a package and have a label put on it, to make it your own, unique product, because we’re not in the business of selling other people’s products. You’re creating your own product brand that you can do a lot with, including controlling pricing so you can make a lot more money. What you don’t want is some big, technological device that weighs 50lbs because it’s going to be tough to ship, hard to label, and tough to manage. Ideally, you want smaller, non-mechanical products.

2.    Determine Top Keyword(s) for the Product

To do this, you can either use Google’s keyword tool or you can look on Amazon itself.

3. Search for Keyword on Amazon

Once you’ve figured out what the best keyword is, you just do a quick search on Amazon to see what other products are currently there.

4. Look at Top 3-5 Products & Use Rules of Thumb

This involves looking at the top three to five products and using the rules of thumb to evaluate if they are products worth pursuing.

Example

If someone comes to you and says, “I’ve got a source or there are these cool stylus pens for iPhones and other smartphones. Do you think that would be worth selling on Amazon?” Here’s how you would evaluate this for yourself.

One way is to start by typing keywords into the Amazon search bar. This way of searching goes based on what you search for. You’ll see a lot of keywords related in the list (the ones at the top get the most volume) but it doesn’t really tell you what the best keyword is.

keyword research in amazon

 The best way is to use Google’s updated Keyword Tool (now called “Keyword Planner” (click http://adwords.google.com/keywordplanner or search for “google keyword planner” and select the link for “Google Adwords Keyword Planner”)). Once there, you may need to log into your Adwords account or, if required, create one. Creating one is very straight forward, requiring just your time zone, country and very little else.

Once you’ve logged into your account, you can either click the link above again or simply select the Keyword Planner Tool from the “Tools and Analysis” drop-down:

keyword plannerAfter you open the Planner tool page, do the following:

A)    Select “Search for new keyword and ad group ideas” from the list of “What would you like to do?” options.

B)    In the “Your product and service” field, type in some of the related keywords; e.g. “iphone stylus” (without quotes).

C)    Click “Get ideas”.

action in keyplannerD) The list that appears will first be shown in groups of keywords. You can go ahead and look inside each group by clicking on the hyperlinked group keyword (column “Ad group (by relevance)”. This will show you a lot of different keywords, like “iphone 4 stylus”, etc. Since you aren’t trying to sell the iphone, this would not be a keyword you want to use. Instead, you want to try for the stylus, so “stylus for iphone”,iphone stylus pen”, etc. are good targeting keyword phrases. We’re going to select “stylus for iphone”.

E) Go to Amazon.com and type in the keyword “stylus for iphone”. As you can see below, a number of products come up.

number product

F) Open up the top 3, each in their own tabs, and see what the bestseller ranking looks like.

i) 3 pcs Aqua Blue/Black/Red Capacitive Stylus……..Best Sellers Rank #25

absr

G) These are all selling extremely well. If you take a look at the prices ($1.71. $3.35, $2.47), you’ll notice that they are lower than what we are looking for. If you scroll down on our original “stylus for iphone” search page, you’ll find some higher-priced items.

i. amPen ™ Ultra-sensitive Capacitive Stylus………($6.95) Best Seller Rank #68

absr68This means that you don’t have to sell this type of product at $1.71 to do very, very well. The stylus is a very good product and using this evaluation process, we have found out that not only are there lots of products selling really well for this type of product, but also that we don’t have to be extremely cheap to do well ourselves.

All in all, this looks like a good opportunity. If you were looking at a product that isn’t selling very well (i.e. doesn’t have a good Best Seller Rank) or only one that is selling well while the rest were horrible, then it probably wouldn’t be a product you want to pursue.

Conclusion

Evaluating Product Opportunity Potential is a good skill to have when moving forward with your own Amazon business, as when you start coming up with ideas yourself and when others start presenting ideas to you. You’ll know quickly how to determine whether or not it’s a good product for selling on Amazon.

There are some good rules of thumb to help you evaluate your product opportunities. Not all great opportunities will perfectly match these criteria, but do try to get as close as possible.

Remember, the goal is NOT to pick a PERFECT product, just pick a GOOD one and run with it, learning along the way.

Rules of Thumb

•    Bestseller Ranking in Top-Level Category

o 0-100: EXTREMELY GOOD

o 101-500: VERY GOOD 

o 501-1,000: GOOD 

o 1,001-5,000: OK

•    # of Reviews (Look at Top 3 Similar Products):

o 0-50: VERY LOW COMPETITION

o 51-100: LOW COMPETITION 

o 101-300: MODERATE COMPETITION

 o 300+: HIGH COMPETITION

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