Ok, now that we have established WHY having a product picking methodology is so important, I am now going to share my exact method.
The method is still new, and being refined as I go along. The great part about it, though, is that it is adjustable. It can be molded to fit anyone’s specific needs or experience.
I’ve used this method to identify only a few products so far (less than a dozen). Before my latest revision the three products it identified for me that I decided to launch recently have yielded a modest $25,000 or so in sales. This was proof enough to me that it works.
I have since made the formula better in my opinion. So without further ado, here is my method along with an explanation of the logic behind each step:
Step One, Choose a Category
Go to https://www.amazon.com/Best-Sellers/zgbs. This is a list of Amazon’s best sellers. Now choose a category from the left hand column. Any category you wish.
After you’ve chosen a category, choose a sub-category. These sub-categories can go deeper and deeper, but I find the best results come from one layer of sub-category under the main category.
The logic behind this is these are the most in-demand products in their niches. It’s proof of concept before even beginning. This is a product that WILL sell because it IS selling.
Step Two, Identify Private Labelers
The next step is, within this top 100 list you need to find any third party sellers you can. Specifically, you are looking for what may be private label brands. There are a couple of ways to identify them.
The first thing I do is eliminate the big, recognizable brands. If I’ve heard of them, they are not what I am looking for. Also, anything sold by Amazon is eliminated. Anything fulfilled by merchant is also taken out of the equation. This doesn’t guarantee they aren’t private label, but it is impossible to tell usually when it is sold by a wholesaler or other distributor.
When I find one I haven’t heard of that is actually FBA, I click on the listing. Then I’ll click on the seller name, right next to “Sold by.”
Then I click through to the storefront. I am looking for a seller with NO MORE than two brands and NO MORE than two pages of products. Typically if they have this amount or less they are a smaller seller. Bonus points if the seller name is the same as the brand.
The logic behind this is that if another private label seller can make it to the bestseller list, there is no reason why I cannot also if I do things right.
Step Three, Look at Sales
After you’ve identified another private labeler, run JungleScout Chrome extension on their storefront. You’re trying to see whether this third party seller is making AT LEAST $60,000 a month in sales for either this one product, or a group of similar products.
The logic behind this is, this answers my question of “will it be worth my time/energy/effort/money?” See, in my opinion, $60,000 a month is a decent amount of money and shows strong sales. It is a high enough number too that if the seller were blasting their product, likely even still the numbers wouldn’t hit that high (unless they had a TON of inventory to blast). But it isn’t too high that achieving similar sales quickly would be an unrealistic expectation.
Step Four, First Page Performance
Now that you’ve identified a best seller being sold by a private labeler that is doing really well, it is time to see how others are doing. Go to Amazon.com and type the main search term in the search bar. For this example, it would be “L Arginine.”
In this step you need to identify all of the private labelers on page one. I typically cut my search off at the top 16 results. The reason being that every sub-category yields a different number of page one results, so to keep things uniform I just look at the top 16 ORGANIC results. Skip over sponsored ads.
I use the same method of identifying private label sellers as you did in the best seller list.
Once you’ve identified all the private label sellers, you need run JungleScout again to see their estimated monthly revenue. Here you are only looking to see how many private labelers are selling more than $10,000 of product per month.
The logic behind this is, if most of the smaller sellers on page one for a major keyword are making decent sales (and I consider 5-figures decent) then all I may have to do is rank for that keyword.
Step Five, Look at the Reviews
Next to evaluate is the number of reviews sellers have. Now, every product has a number of sellers with thousands of reviews. However, if page one for the most relevant keyword is riddled with well established listings that have thousands of reviews, that may be a deterrent.
For this step you need to count how many listings have LESS than 1,000 reviews.
The logic behind this is because, if most listings on page one have less than 1,000 reviews, my listing won’t look so out of place when I rank it and don’t have many reviews. It also shows that there are other sellers making money that don’t have an unattainable amount of reviews.
Step Six, Check the BSR
The next metric you should be concerned with is best seller rank (BSR). Specifically you are looking to count how many listings have between 2,000 and 9,000 BSR (remember to only count organic listings, NOT sponsored ads).
The logic behind this is, to me 2,000 to 9,000 BSR is mid-competition and not hard to obtain. If listings are making it to page one with BSRs in that range, that means it doesn’t take an absurd amount of sales to make money or to maintain rank.
Step Seven, Search Volume
In this step you need to look at estimated search volumes for the primary keyword. Now this is the part of the formula most likely to be tweaked based on personal preference. I like to look for keywords that get a LOT of volume. Other colleagues of mine prefer to go for lower volume as they equate search volume with likely competition levels.
However, this is MY method. So at this stage I use three tools; Merchant Words, Helium10, and Google Keyword Planner.
First I check the volume on Merchant Words. This tends to be the highest number. Next I check Helium10’s Magnet tool. These search volumes are typically between a sixth and a tenth of the volume of MW. Finally I look at Google. The search volume here is rarely parallel, but sometimes it shows similar interest.
Keyword Planner is free, so everyone should use that, but you don’t HAVE to use two paid tools to check Amazon keyword volume if you don’t want to. I just prefer to be extra certain. I am on Merchant Words’ $9 a month plan, but for those of you concerned about the price of Helium 10, if you have access to Headline Search Ads (available to Brand Registered brands) then you can begin to create an ad and use the “Very Low, Low, Medium, High, Very High” projections from Amazon as well.
There are other tools that also offer search volume estimates. Use whatever suits your budget and comfort.
The reason behind checking search volume for the primary keyword is because this gives an indication of what kind of traffic to expect once I rank on page one. The reason I look for highly searched terms is because, until I am ranking for a number of longer-tail keywords, I want to make sure I am getting sales. The best way to ensure that is to get in front of lots of eyeballs, which will happen quicker with a heavily trafficked key term.
Step Eight, Check for Large Brands
At this stage you also want to see how many large, recognizable, household name type brands there are competing. You should count how many there are in the first 16 organic results on page one for the main keyword.
The reason I do this is because I DO NOT want to enter a space that is dominated primarily by big brands. There are some products out there that your average consumer just feels more comfortable purchasing from larger brands. I am not interested in entering that space because I will lose that competition most of the time.
Step Nine, How Many Other Sellers
The next metric you need to be concerned with is how many other sellers there are. You can determine this by looking at the total number of search results from the search term.
The reason I look at this is because I DO NOT want to enter a super saturated space. If there are a large number of results, that is a lot of listings to compete with. Too many and it may be too saturated.
Step Ten, Look at Variations
The final metric you want to record is whether the product typically has variations. Now, many listings can say they have variations, but that is not what you are looking at. What you should be concerned with is whether the product TYPICALLY has variations, as illustrated by over half the first search results page.
For example, apparel items typically have variations. Fashion accessories also tend to. Garlic presses, however, don’t usually.
Don’t be fooled though. Many sellers have caught on to the fact that there appears to be a ranking boost that comes along with having variations (or a number of other grey hat manipulations you can achieve) so many listings will say they have variation options available from the search page, but really don’t.
For example you’ll find a lot of measuring spoon listings claiming to have variations, but upon closer inspection discover that most don’t. If it doesn’t look like the type of product that should have variation options, click through to the listings to be sure.
On the flipside, some products don’t look like they should have variation options, but typically do. Some supplements, for example, will often offer multiple sized bottles. It is important to know whether the product you are looking at will be expected to offer variations.
The reason I look for this is because I want to AVOID products that typically offer variations. I have made the mistake of selling too many products that offer a style variation, only to see lessened sales because of people’s personal tastes. For me, it is best to simply remove that issue from the equation.
Above are all the steps I employ to find the right product to sell. Now, I use my personal tastes to look for traits I PREFER, but I don’t want to leave the final decision up to my preferences. I need a more scientific approach. So I assign numeric values to each step in order to ensure the final decision is based on an objective standard (or as objective as I can be).
Here is how I score:
- IF I find a private label seller in the top 100 best sellers it gets 10 points. If not I keep searching.
- IF that seller is generating over $60k per month from that product it gets another 10 points. If not it gets 0.
- The number of private labelers on page one for the primary key term is the next score.
- The number of listings with less than 1000 reviews is the next score.
- The number of listings that have between 2,000 and 9,000 BSR is the next score.
- Scoring on search volume for Merchant Words is as follows – 0-10k 0pts, 10k-50k 1pts, 50k-100k 7pts, 100k-500k 10pts, 500k+ 12pts
- Scoring on search volume for Helium10 is one tenth of that – 0-1k 0pts, 1k-5k 1 pts, 5k-10k 7pts, 10k-50k 10pts, 50k+ 12pts
- Scoring for Keyword Planner is as follows – 1k is 0pts, up to 10k is 5pts, up to 100k+ is 10pts
- I then take the number of large, recognizable brands (no repeats, so even if they have multiple listings on page one, they are only counted once) and I subtract that number from 16 (my standard page one number of listings). The result is the score.
- Scoring for the number of search results is as follows – Less than 2k results 10pts, 2k to 5k results 5pts, 5k to 10k results 1pts, 10k+ results 0pts
- IF the product does not typically have variation options it scores a 10. If not, it gets 0.
These amounts are then averaged. The final number is the final score.
SO, in our l arginine example, the listing I found scored the following:
- Top 100 PL – 10
- PL product over 60k/mo – 10
- # PL over 10k/mo – 3
- <1000 Reviews – 13
- BSR 2k to 9k – 4
- Search Volume MW – 10
- H10 – 12
- KW Planner – 10
- # Large Brands – 10 (16 – 6)
- # Results – 10
- Variations – 0
AVG = 8.36
Personally, I only pursue products that score above a 9.
This product failed to score high enough according to my criteria. Honestly, this product would have been a great choice if it weren’t for the fact that so many listings offer size variations. That and there aren’t many private labelers already making money for that particular product/keyword.
Your Next Big Product
I hope you find this formula useful and it helps you to make loads of money.
If you decide to employ it, you may choose to tweak the scoring or the criteria. That is what it is designed for though. To be flexible and mold to your own experience or strategy.