Identify Highly Profitable Products to Private Label (Part 2) | Sellics

How to Identify Highly Profitable Products for Your Private Label Amazon Business | Part 2

How to Identify Highly Profitable Products for Your Private Label Amazon Business | Part 2
By Franz Jordan in Amazon Marketing Tips. Last updated on

Part 1 of this two-part post about identifying highly profitable products for your private label business covered the three key charecteristics of the perfect private label product. This second part now introduces the three steps required to find the perfect product.

3 Steps to Find Great Products to Private Label on Amazon

The best way to find a great product to private-label is to follow our 3-step process:

  1. Develop product idea
  2. Evaluate market segment
  3. Perform in-depth market validation
Finding the perfect private label product for Amazon


1. Generating Good Product Ideas to Private Label

The goal here is to develop a product idea list that is well-suited for your private label business. Products don’t need to be perfect, only good enough to merit more research. There are two main approaches to come up with potential product ideas.

The data-driven approach focuses on using some type of product “database” and using metrics and filters to identify products that match your business’s ideal product criteria. The most common product “database” is the Amazon best seller list. What’s appealing about using the best sellers list is that it contains products that are already performing well on Amazon indicating an existing level of demand. Furthermore, by limiting target products by category, you can easily focus on categories of interest. By taking ideal product specifications (low weight, simple product, etc.) into account while evaluating your list, you can narrow down your search even further. (Hint: Sellics allows you to automatically filter for these criteria with the “product research” tool feature).

The second approach is unstructured, creative brainstorming. There are various techniques to help stimulate the brainstorming process. Write down everything you touch over the next 48 hours. List every object you see in a room. Page through magazine ads or watch infomercials. Or listen to conversations between friends or foreigners.

Both approaches can be effective, but we think the data-driven approach leads to better results since it’s systematic, repeatable and more comprehensive in its analysis. For this reason, we decided to integrate a database containing the top 5,000 Amazon best-sellers from each product category in our product research tool. This database can easily be filtered by weight, estimated sales and competitiveness which will help you to find more “hidden champions” and dramatically reduce time spent on research.

Screenshot of Sellics Product Detector:

Sellics Product Research Tool - Amazon best seller filter


2) Analyzing Demand and Competitiveness in Your Private Label Niche

Once you’ve developed promising product ideas, continue with a niche analysis to evaluate revenue potential and competitiveness. The best starting point for the niche analysis is the main keyword for the niche/product. For example, if you’re evaluating a garlic press, then “garlic press” is the main keyword. Search for the main keyword on Amazon and review the search results. The segment analysis should answer the following question: Can my product reach the top 5 search results, and if so, how much money can I make?

The answer to the first part of the question depends on an existing product’s review quantity and listing quality. If all products on the first page of search results have more than 500 reviews, reaching a high search rank will take significantly more effort than if existing products don’t have many reviews. Next, look at product listing quality. Do they have high quality images? Does their title include the most important keywords? Do they use all five bullet points? Do they have a high quality product description? The more mistakes they make, the easier it will be for you to rank higher than they in Amazon’s search results.

The second part of the question (How much money can I make?) can be answered by looking at the sales ranks of the top products. If the top 5 products all have a sales rank below 2,000, you’ve likely found a niche with high demand. Another good way to estimate sales volume is to check search volume for the main keywords (you can use Google Keyword Planner or Merchant Words). You’re looking for numbers above 100,000 monthly searches for the niche’s main keywords. You should also try to get a feeling for profitability by using the Amazon FBA calculator to calculate your net profit after FBA (fulfillment by Amazon) fees.

If your niche analysis indicates a good market opportunity, you should take another look at product specs. Make sure that the top products match your ideal product specifications (low weight, simple product that requires low rate of returns etc.).

The entire niche analysis can be performed manually. However, this is very time consuming and gathering the data can be challenging. This is why we built a fully automated niche analyzer into our product research tool which allows you to quickly understand if a niche is worth your time or not.

Screenshot of Sellics Niche Analyzer:

Amazon Niche Analyzer


3) Validating Your Results by Tracking Target Products’ Actual Sales Volume on Amazon

Congratulations – you’ve almost found the ideal product! So far, all your assumptions about the potential market size and product demand are based on estimates. You found a product with a strong sales rank and assumed that indicates a certain sales volume. Your estimates, however, could be wrong. How cool would it be to know the actual sales volume of a product or an entire niche before you source it? Extremely cool!

We recommend analyzing actual sales volume using a sales tracking tool. The Sellics Sales Tracker is the perfect tool for this. Add any ASIN, and the Product Sales Tracker will provide daily product sales volume. Keep the Sales Tracker running for 2-3 weeks to validate sales volume. Ideally, you should add the top 5 or 10 products to measure the niche’s sales volume. This step significantly reduces risk of entering a niche with low sales volume.

While you’re collecting actual sales data, you can spend your time identifying key features to differentiate your product from the competition. This will give you a significant advantage once you enter the market. The best way to find areas for improvement is to read through negative reviews for existing products. Is there a feature that users complain about again and again? If so, that’s a great opportunity of which you can take advantage.

Screenshot of Sellics Sales Tracker:

Spy Sellics Startseite


Why Sellics is the Most Efficient Way to Research Profitable Private Label Products for Amazon FBA

The process we’ve described here can be time-consuming and tedious. Luckily, we found a way to automate all three steps and combined them in our product research tool, reducing your time and effort. Our database that includes the top 5,000 Amazon best-sellers of each product category, together with our niche analyzer and our sales tracker, allow you to find the most profitable products in no time.

Check out our product research tool for more information.

Featured image credited to Freepik

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