Are you all set to start an Amazon FBA business? Have you got seller central account approval? Are you thinking of what to sell on Amazon on Amazon FBA as a new seller?
If yes, give a rest to your brain. Today, I will share the basics that will help you decide what to sell on Amazon FBA.
Table of contents:
What to sell on Amazon FBA as a new seller 2020
Lightweight Product
The product shipping rate depends on the product weight. A light product will require a low shipping fee while a high weight product demands a high shipping fee.
The Amazon shipment process follows the same rule. They deduct the fulfillment fee (FBA fee) from the product sales price. It is recommended to launch a lightweight product while doing Amazon FBA. You can use the Amazon FBA calculator to check the estimated FBA fees of any Amazon product.
Private Label
A private label product would be the best choice for FBA. Your product will interact as a brand to your audience.
A private label is a process where a retailer asks the manufacturer to produce the goods and wrap it under his labeling. Dealing with a manufacturer itself will save you money to add-on profit per unit sale.
Finding a manufacturer for a niche or product is easy. Prefer Chinese manufacturers to cut down production and shipping costs. Check out the best methods to find suppliers for Amazon FBA.
Benefits:
- No need for labor and machinery to produce goods.
- Ready-made stock.
- No restrictions and copyright infringement from similar sellers on Amazon.
- Fast launching.
- Brand building.
Avoid categories having high return rates
People love to shop for clothes and electronics online. It is a fact these products have high purchase rates than other categories. But, I will not recommend you to start an online business with these categories. Electronic gadgets and clothing accessories have high return-rate.
Amazon closes 90% of return cases in favor of its customers and returns the money to them. The returned products could not be listed again. Amazon asks you to remove return product units at your destination. In case, you have two options either call the removed units or Amazon disposes of it.
So, better to read reviews of customers on the Amazon listing before finalizing any niche.
No Amazon Brand as a competition
Amazon offers a platform for sellers to sell items to its customers. In addition, Amazon itself has launched 400+ private label brands and is selling stuff on the same platform.
So, when doing Amazon product research for FBA, check whether Amazon is selling that stuff. If it is selling a product you are interested in, better to leave that niche. Most of the time, you will find their listing as “Amazon’s Choice” on Amazon’s brand listing for almost all potential and profitable product keywords.
Low competition and good demand product niche
Every market has a gap and one who finds the gap makes his way to success in that market industry. Similarly, you need to look for such a niche/product that has low competition and helps you generate profit emptying the stock quickly without investing much in the advertising.
A niche that has good demand and fewer sellers is the ideal niche that Amazon sellers look for. It means the product/niche market can easily be dominated. Look for a product priced between 20-40 USD on Amazon, having weight under 4-5 pounds, no established brand as a competition and average competition has reviews/ratings between 50-150.
Today, almost 90% of the categories are full of competition on Amazon. To establish identity in the competitive niche, you will need to invest much in advertising. Home and Kitchen, Baby, Garden, Fishing, etc are such categories where you can find potential niches or starting FBA business.
But, still, there are sub-categories and micro-categories where you can make a market. Amazon FBA product research tools help you find such niches and products quickly.
Analyze your budget
Amazon FBA business revolves around your budget. You need to plan the steps based on your finance. You will need money for product stocking and processing the inventory to the Amazon warehouse for orders fulfillment by Amazon. Also, you will need to have a budget for PPC. So, it is quite important to analyze your budget for FBA.
Split the budget into two phrases, product stocking + shipping, and Amazon advertising. Ideally, you will need to prepare for a four-figure budget that depends on the supplier’s MOQ, shipping, and market competition. Your budget will help you decide a product to sell for.
If you have a low budget and plan to start FBA then read our article “How to start Amazon FBA business with little money“.
Best category to find products to sell on Amazon FBA
High demand and high-profit categories
Home and Kitchen
Home and kitchen products are related to our daily needs. We need gadgets to make our life simple for various household and kitchen work. It is the 3rd most demanding category on Amazon USA in February 2019.
Home and kitchen products manufacturers are producing at a very high scale all over the world because of the evergreen demand.
Benefits:
A) Great demand
B) High profit
C) No certification or documents required to approve the listing.
D) Thousands of suppliers on Alibaba for the niche.
Cons:
A) High competition (find a micro-niche with a limited number of sellers and good sales history)
B) Most of the niche of the product have been dominated by the brands.
Baby
The baby category is one of the emerging categories on Amazon and other marketplaces. Parents are preferring to buy baby accessories online and the trend is hiking year by year. There are various sub-categories on Amazon where new sellers are making good sales.
The best thing about the baby category is high profit and less MOQ. You will find many suppliers on Alibaba and Made-in-China.com where suppliers are selling at very prices and MOQ under 500.
Benefits:
A) Fast-growing category.
B) Good profit
Cons:
A) It is for babies, do read product reviews before finalizing a product.