Getting started selling on Amazon is a great way to earning a side income or starting a small business. But how do you get started the right way.

Amazon have made it quite easy for anyone to sell a product and starting get paid, so it’s a great opportunity.This article will be the first of many on getting up and running on Amazon. But before we delve into the details we need to understand who Amazon are and what their goal is.


Who is Amazon?

amazon-home-page

Amazon is the largest online retailer in USA and Europe. They are fundamentally a marketplace with an incredible number of growing customers. The demand is huge.

Amazon have different market places depending on where you are. Amazon.com is for customers in USA and Canada, Amazon.co.uk for UK, Amazon.fr for France and so on.

Amazon’s aims to deliver the best possible customer experience from when the buyer arrives at their website, searching for products to receiving them. This is really important to remember when you get started with your products. You must aim to offer the best possible experience for your customers. Unlike selling on Ebay, the customer experience is key.


So what do you need to get started on Amazon?

The first thing you will need to do is decide what product you will sell on Amazon. There are two main strategies, Retail Arbitrage and Private Labeling.

Retail Arbitrage
This is where you find low priced products normally from your local store (they may be selling on a huge discount) and sell them for a profit on Amazon.

Private Labeling
You source products from a supplier and sell on Amazon with your own brand logo.

There are pros and cons to both options but we prefer private labeling as you can create your own brand and add value. But private labeling takes longer to source products and may require a larger start-up investment for your initial bulk order.

We will focus on Private Labeling in these articles.

 

Where’s the Demand?

Before sourcing your product, the first important step is to find a product which customers are already buying so we know there is already a demand. So instead of thinking of a new idea and hoping there is a demand, you can find out easily what products are selling well.

Amazon Best Sellers

Amazon provides a list of the top 100 best selling products in each category. This is gold dust for us and removes the guess work. To find best sellers simply search for Amazon Best Sellers in Google.

amazon-best-sellers

Amazon provides a best seller list for each market. So if you want to sell on Amazon USA you will look at the best seller list for Amazon.com. For selling in the UK, look at best seller list on Amazon.co.uk

You can then click on each category and subcategories and see the top selling 100 products. Brilliant.

When starting out there are some categories we advise you avoid: Digital products, Music, MP3, DVD & Blu-ray, Large Appliances, Video, Apps, Books, Clothing, Electronics, Gift Cards, Grocery and Jewelry.

How Much Demand is There?

Using Amazon’s 100 best seller list we can find out the demand for a product but how much demand is there? For this you we need dig a little further. For every product on Amazon, customers find them by using a keyword.

Think about when you buy something from Amazon. You normally will type your keyword in the search box and then then refine your results. So they key is to find out out much demand there is for a specific keyword. One way to do this is to use Amazon’s Best Seller Rank or BSR for short. Every product on Amazon has a BSR which is an indication of how well the product is selling. So a product with a BSR of 100 is selling much more than a product with say 50,000 BSR. So the lower the BSR the better. So the products in Amazon’s 100 Best Seller list are all ranked from 1-100.

To find out a product’s BSR, click on the products detail page, scroll down and look for the section Product Information.

amazon-bsr2

So for example I can see that Colored pencils are in the top 100 list in Arts and Crafts category on Amazon.com. I take the keyword Colored pencils and type it in the search box on Amazon.

amazon-search

I get 57,710 results. If you then check the BSR of the top 10 results on the first page of results you’ll get a good feel of the demand for this keyword.

Now I’m a bit lazy and use a tool called Jungle Scout which gives me all the stats I need including BSR, reviews and much more. We’ll talk more about Jungle Scout and other tools you can use to speed things in later articles.

amazon-demand

So you can see the first products has a BSR of 25, second 3, third 3 and so on. Remember the lower the BSR the better and a BSR of 1000 and below means we’re seriously rocking (which means there’s huge demand). This means for the keyword Colored Pencils there is huge demand. But remember we also need to consider how strong the competition is.


How strong is the competition?

When selecting a product, you want a product in demand but with low competition. One indicator of how strong your competition is will be the number of reviews the product has. Anything less than 100 reviews is Low competition. 1000 and above is HIGH competition.

Going back to our keyword Colored Pencils, you can see a number of products have over 1000 reviews. So lots of competition for this keyword and not a good idea to start with.

What do customers think?

One more thing to bear in mind is to look at what customers are saying in the reviews. Again this can be gold dust and gives you an idea of what the market is looking for.

Let’s take a look at an example. Here is a product selling well on Amazon.co.uk website. Ranked at number 3 in Kitchen and Home, this product is in hot demand.

amazon-top-bestseller

amazon-hangers

So what are customers saying about this set of Hangers.

amazon-reviews

Looking at the 1 star reviews, you can see customers are complaining of poor quality. This could be an opportunity to sell better quality hangers. You will be surprised at what you find out from customer reviews.

 

Repeat this process across different categories and compile a list in Excel with your findings.

 

Next Step….Find a supplier

So once you found a product now you need a supplier. Join us in our next article on how to find a Supplier, what to say and what not say, how to negotiate a MOQ and how to build a long term business relationship.