Trying to find a product to private label for your Amazon e-commerce business? Kris and Dustin share their methods for picking products to private label in this episode.
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– Hello everyone. And welcome to episode 39 of Two Amazon Sellers and a Microphone. I’m Dustin Kane. And with me as always is Kris Gramlich? What’s up Kris?
– Not much, man. Excited to talk about today’s episode. This is gonna be good. It’s a good topic.
– Absolutely. This would be a good way, to go on into the Thanksgiving holiday. This’ll be our last podcast before the holiday. But today’s topic is great. We’re gonna talk about a step-by-step method for picking products to private label. Probably one of the questions we get asked the most. How do you pick your products? How do you decide what to sell?
– Yeah, and probably most like the important decision. Pickin’ a bad product can just ruin you. So makin’ sure you know where your margins are and there’s plenty of demand. Those are all things that you need to do while you’re pickin’ a product because this is what’s gonna make or break you on the private label journey that you’re about to take. So definitely important to get this down.
– Mm hm. Yeah. And we’re going to go over some very detailed steps. Just some criteria that we use when we’re picking our products that you can use also to pick your products. But to touch on your point, you can pick a bad product. And it’s not, and it doesn’t mean the product’s bad. You could find a really great product for whatever it is, but it might be in an unbelievably competitive category. You may not be able to get it at the cost that makes it profitable when you sell it. I mean, there’s lots of things you have to take into account because there’s a lot of work in launching a product and you do not want to spend your time and money launching something that’s gonna potentially fail. So if you follow these action steps or these criteria that’s gonna greatly increase your chances of having a good product.
– Yeah. We’ve both been in competitive niches. You either gotta have deep pockets to rank it. ‘Cause, it’s going to be tough to compete with those number of reviews. So these are things that these little steps here and this little formula that we’ve kind of have here. These are things that can kind of prevent that from happening. So I would definitely pay attention to these five here.
– Now to get this criteria, you may need to utilize some different tools. Some tools that you can do some competitive research and some keyword research. A tool like Jungle Scout or Helium 10. Some of the tools that you get with Brand Analytics inside, if you have a brand registered those are helpful tools as well to get this. So you may need to utilize some different tools for these but these are the criteria that we look at. So let’s go ahead and just dig into ’em one by one. There’s, let’s see one, two, three, four, five, there’s six criteria that we’re lookin’ to meet before we pull the trigger on endorsing that product. So let’s talk about number one, Chris. The margin needs to be over 30% and the ROI needs to be above 150%. Expand on that a bit more.
– Yeah. So, you know, finding the product, you don’t want to get something that has a low margin. Like you don’t want to be selling somethin’ that you can’t make money on. So when you find a product, make sure you understand what your margin is and what your ROI is, because those are the metrics that are gonna help you invest more money into future products and help your business grow. So, for me, the minimum is 30 for a product. I mean, I would like to be higher than 30, but, 30 to 35, 40%. Obviously, higher the better, but you want to make sure your margin is gonna be at least 30% and you’re gonna get an ROI of at least 150%. And the way to figure this out is you can use the FBA calculator. That’s a free tool. Or you could use tools like we mentioned, like Jungle Scout or Helium 10 to calculate this. But when you’re pickin’ a product, the most important thing here is to make sure that you’re going to have enough meat on the bone. Like you need to have enough money you’re gonna make. And the margin needs to be at least 30%. And the ROI needs to be at least 150%.
– And you need to make sure that you get these numbers accurate. In order to get your margin, you need to make sure you have every possible expense accounted for. It’s not just the cost of the goods, but it’s shipping it. Okay? So you have the shipping to you or to your warehouse and then to Amazon needs to be in there. You have to have all your FBA fees in there. And you want to make sure that that’s accurate. And if you use tools like Helium 10 or the FBA calculator or anything like that, and you’re looking at your FBA fees, make sure that everything is right. If your product is one inch longer than what you’ve got in there as parameters, that may kick it up to a whole ‘nother tier where your FBA fees are more than you think. So it just takes, you need to really make sure you’re doing your due diligence when getting this because you certainly don’t want to have a margin less than 30%. It’ll be hard to turn your inventory to get the cash flow, to keep that going. And it’ll also give you no room for ads.
– Yup. The quick way I do this is whenever I find a product, I take the unit cost and I just multiply that by four. And I see if that’s gonna be competitive in that niche on page one. It’s a quick way to look at it. Take the cost. Multiply it by four. Go look at page one. See if you’re gonna be within the range of everybody else or maybe a little bit lower. And if you’re not, you know, it might be best to go onto another product.
– Yeah, yeah. That’s a good way to eyeball it and just keep moving through products and products. But once you sort of filter down, but then definitely make sure you have your calculations right and the fees are accurate. All right. So that’s, that’s our first criteria. The second criteria is, there need to be five competing ASINs that have less than a hundred reviews and those same ASINs are generating at least $5,000 a month in revenue. This is important because this shows, number one, that there’s an actual market that people are selling these. And that the review count’s not super high on those to where it is possible for you to complete quickly.
– Yeah. And you can, again, we’ve talked about Helium 10 Jungle Scout. This is a quick thing you can also do. Just go to the keyword. Find your main keyword. Go to that page and just, you know, turn on those extensions. And you’re looking for five ASINs that have less than a hundred reviews that are making more than $5,000 a month in revenue. Super simple to find that out. You can skip through those results pretty quickly. And if you’re hittin’ all of those metrics you just go on to the next one.
– Yep. And this is good because a lot of times you’ll find a niche or a product, but there’s just really one competitor who’s killing it. And there may be a bunch of other sellers that aren’t doin’ that. Well, he has some competitive advantage you don’t know about. And you want to get in there, whether he’s, you know, the most famous brand in that industry or whatever. This shows that at least five different sellers are having success right now. So you can enter this market. All right. The third criteria that you want to look at is that there’s at least five ASINs with less than 300 reviews that are generating more than 10,000 a month. This is just sort of another step of what we just talked about before. But this is showing that there’s people really doing well with this product.
– Yeah, this shows like depth of a keyword or depth of a niche. Sometimes I just usually skip that last one we talked about and just go straight to this one. The 300 reviews. But you know, you can, this is like double-checkin’, making sure it’s gonna be a legit product. So this is just, you know, makin’ sure everything’s gonna line upright. But yeah, five ASINs, less than 300 reviews generating at least $10,000 a month.
– Yep. All right, let’s move on to the next one. The next one is that there are no more than four ASINs with 1000 or more reviews on page one. This is another big one.
– This one’s tough because if you do source a product and they have all thousand reviews it’s gonna be hard to compete.
– This is showin’ that there can be products that do have that, but the thing here is, there’s four ASINs, no more than four ASINs with a thousand reviews in conjunction with those other products. You’ve got at least five products that have less than 300. You can have five priced less than 150. And those are all generating sales, also. So to your point, it shows the depth of the market, for sure. Because you could, like I was talking about before, there could be where there’s less than four ASINs, where there’s no more than a thousand reviews, but then there’s no other sellers generating 5 to 10 thousand dollars a month for that same product. So it shows there’s no depth in that market. Which might make you want to steer clear of it. So all of these criteria have to be met in conjunction. You don’t want just one or two of these met. They all need to be met before you can consider moving forward.
– Yup.
– Excuse me. All right. Now the last one that we look at is five keywords with a search volume of 5,000 or more per month or a search frequency ranking of less than 200,000. Chris, you want to talk about how you find it? Number one, how you find out that search frequency ranking?
– Yeah. That’s gonna be found in Brand Analytics. You can use your, if you have Brand Analytics in your account, you just go to the Brand Analytics page, look up the keyword you’re looking for, and make sure that there’s at least five keywords that have that search frequency rank of less than 200K. For those who don’t have Brand Analytics, I use both of them, and you can use the SFR or the search volume. Just make sure that there’s enough demand on at least five keywords so that when you’re launching this product you’re not just stuck for one keyword. And you’re not just focusing all on just one keyword to go after. You want to make sure there’s other variations of the keyword that you’re targeting so that when you run your PPC ads you can have a wider net to cast. And kind of get sales from different places. So five keywords, search volume of at least 5,000 or more, or a search frequency rank of less than 200,000.
– Yeah. And you hit on a couple of important parts there with this five keyword search. It just shows you that there’s other areas, other ways to compete on a product rather than just the main keyword, which is important. Especially this is a strategy if you’ve got a lower budget and you’re gonna launch this product may be targeting just a couple of keywords, you’ve got to make sure that those the volume is there for you to be able to target it. If there’s less than 5,000 searches per month, it may not be all that viable to actually get the sales you need for that product off those keywords. So this is pretty straightforward. I mean, this is very, you’re just trying to make sure that your product that you’re researching meets these six criteria points, and then it’s game on. You want to, after that, that should be the green light to go ahead and start sourcing it get it to market. But let’s just go over these real quick again. Criteria, number one, your margin, your profit margin is greater than 30% and your return on investment is greater than 150%. Criteria number two, five ASINs with less than a hundred reviews that are generating more than $5,000 per month. Number three, five ASINs with less than 300 reviews that’s generating more than $10,000 a month. Criteria number four, no more than four ASINs with 1000 reviews or more on page one. And criteria five, five keywords, this might be criteria six, I may have lost count. Five keywords with a search volume of 5,000 or more or a search frequency ranking of less than 200,000 which you can find in your Brand Analytics.
– And you can do these in any order. So if you feel like the one I usually focus on the most is no more than four ASINs with 1000 reviews on page one. That’ll give you quick validation if it’s a product you want to be in or not. So if you don’t see more than four on page one, then you just move on to the next one. Let’s go look at the number of ASINs less than 300 reviews and less than a hundred views. And if those checkout, let’s go look at the keyword demand, and make sure that there’s enough keyword depth for that same product. If those check out now let’s check your margin and make sure that you’re gonna have enough margin-left. If everything’s good to go, it’s probably a product that you definitely want to source and continue to negotiate and get in and get a sample and move forward with it.
– And I think we should reiterate, these are our criteria for sort of our situation. We don’t have $150,000 to do a launch phase on a product. If you do, your criteria can be very different. You can launch into a much more competitive category or anything like that. This is for us to be able to launch products with a reasonable budget and have the ability to be successful relatively quickly. So those are the criteria. And I think it’s pretty straight forward Chris.
– Yeah. And you know, we have this on Facebook and YouTube. So if you wanna catch up again, we have them listed on there as well, but pretty straightforward.
– We actually have, looks like Nathan Clark has commented on here. Perhaps you can do a show on bringin’, I think that’s somethin’ we might look into Chris. Is bringing, doing a show on bringing new products onto Amazon, sort of like a case study of the good ways to do it. So thanks Nathan, for reaching out. That’s somethin’ that we’ll definitely look into. I’m launching a new product right now. So maybe I’ll just talk about some things that are happening as it goes along. So we’ll see you there. But appreciate you listening Nathan and commenting. All right. I think that’s it. I think we’ve covered everything, Chris.
– Yeah. I think that was a good, quick checklist. Something for people to listen to. To do during the holidays as you’re doing your product research. If you have some downtime over the weekend. These are things that you want to check out. And just, if you have a product you’ve already selected, maybe double-check it. Maybe double-check it with this criteria just to make sure.
– Absolutely. Again, both Chris and I are with Sellozo. So once you’ve gotten that product launched on Amazon and you’re lookin’ to advertise, Chris and I would love to talk with you and show you how Sellozo can help you automate and optimize your ads on Amazon. You can go to sellozo.com and book a time with us for a demo. We’d love to speak with you and talk about anything Amazon related. Also, if this content is helpful for you, please go to Sellozo on Facebook and like the page and you’ll get notified when we go live. We do our podcast live on Facebook and on LinkedIn and on YouTube every day. So you can like our pages there. The Sellozo page there, and the Sellozo YouTube channel. Also make sure you subscribe to our podcast on whatever avenue you listen to podcasts, whether it’s on Apple or Spotify or any of the platforms for podcasts you can subscribe to our podcast. And we’d love to see you there again. So everybody right now, if you’re listening to this is the future, it’s the day before Thanksgiving. So happy Thanksgiving to everybody out there and we’ll be back on Mon.