Amazon Product Research (Avoid Myths and Follow Strategies)

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Amazon Product Research: Launching a successful product on Amazon can seem daunting, especially when you see top sellers dominating the first page with thousands of reviews. However, proper product research is the key to finding lucrative opportunities and avoiding commoditized markets.

Many new sellers fall victim to some common myths that set them up for failure. By understanding effective product research strategies, you can debunk these myths and set your Amazon business up for sustainable growth.

In this post, we’ll uncover two major myths sellers believe when researching potential products:

1. Similar design products are a safe bet to copy
2. You need to match the sales volume of top ranking listings to get ranked yourself

I’ll explain why these assumptions are misguided and share actionable tips to find winning product opportunities on Amazon. With the right research approach, you can identify differentiated designs and target key search terms to get ranked, drive organic sales, and grow your business.

Let’s dive in to master Amazon product research, avoid risky assumptions, and launch products strategically for success. With the strategies I outline below, you’ll be able to find gaps in the market, estimate realistic sales volumes, and compete with top sellers in a lean and targeted way.

Debunking Myth #1: Avoid Copying Similar Design Commodity Products

When first researching products on Amazon, it can be tempting to find a top-selling commodity product and copy it directly. For example, you may see a basic craft paper bag dominating the first page for related keywords. The product likely has thousands of reviews and seems to be a safe bet to replicate.

However, this assumption can get new sellers into trouble. Commodity products with very similar designs lead to a race to the bottom on pricing. With no differentiation in the product, customers choose simply based on price and reviews.

As a new seller, you likely can’t compete on reviews out the gate. That means you need to undercut pricing substantially to get any sales. This quickly erodes margins and makes commodity products unsustainable in the long-run.

For example, let’s say the top craft paper bag costs $10. You source the same bag for $5. To get your first sales, you need to price below the top listing, say at $8. Now you’re only making $3 in profit per bag sold. As more sellers jump in, you start needing to go lower and lower on price. Before you know it, your margins are completely gone.

Rather than copy exact designs, search for differentiated versions of popular products. Using the craft bag example, you could find more stylized versions with patterns, different textures, or custom shapes beyond just a standard brown paper bag.

The goal is to add some unique value so you’re not just competing on price alone. With a more differentiated product, you can likely enter at a higher price point while still appealing to customers searching for craft paper bags. This preserves margins and ensures you have room to manage your pricing over time.

So in summary:

• Avoid copying top sellers’ designs exactly in commodity markets
• No differentiation leads to a race to the bottom on pricing
• Start with thin margins that erode over time as competition enters
• Search for differentiated designs instead to add unique value
• Allows entering at better price points and maintains profitability

Debunking Myth #2: You Don’t Need to Immediately Match Top Sellers’ Volume

Another common misconception is that you need to match the total sales and revenue of the top Amazon sellers in your niche right out the gate. For example, you may see the top sewing kit seller driving 5,000 units per month. It’s tempting to assume you need to match that volume in order to compete.

However, this isn’t necessarily true, especially when you’re just starting out. The key is to match the sales velocity of top sellers on a per keyword basis first.

For example, let’s say the top sewing kit has 100 keywords driving traffic to their product page, each with 1,000 monthly searches. This adds up to their 5,000 units of sales. However, you don’t need to rank for all 100 keywords from the start.

Instead, you can identify 10-20 keywords with high search volume but low competition. For example, you may find “travel sewing kits” only has sellers ranking with fewer than 500 reviews. You can target just this subset of keywords to get your initial sales and reviews.

Once you rank well for your target keywords, you can start estimating potential revenue. Let’s say your analysis shows “travel sewing kits” accounts for 20% of the top seller’s volume. If they drive 5,000 units, that’s 1,000 units from this term. This can inform your sales projections, inventory needs, and cash flow models when launching.

The key takeaways are:

• Don’t assume you must match the total sales of top sellers immediately
• Identify keywords with high volume but gaps in competition
• Target just 10-20 terms to gain an initial foothold
• Estimate sales volume from your target terms based on top sellers
• Use this to inform launch plans, inventory, and cash flow needs

Start small and targeted. As you gain reviews and feedback, you can expand to more keywords and start matching the sales velocity of top sellers. Use profits to reinvest in more inventory, marketing, and product expansion. But don’t overwhelm yourself out the gate.

Wrapping Up

By now, you should have a solid understanding of why you need to avoid two major myths when researching products to sell on Amazon.

First, copying top sellers’ designs exactly leads to issues when selling commodity products. Without differentiation, you end up in a race to the bottom on pricing. Look for ways to provide unique value through modified or premium product designs.

Second, don’t get overwhelmed trying to immediately match the total sales volume of top ranking listings. Identify keywords where you can rank with lower competition. Target 10-20 terms to get initial traction.

Use sales volume estimates from your keywords to inform launch plans. Start small and reinvest profits to expand – no need to compete with top sellers across all keywords from day one.

Focus on finding gaps through smart product research. Dig into keyword analysis to estimate potential revenue based on traffic and gaps. By avoiding commoditization and leveraging target keywords, you can successfully launch products on Amazon.

To recap, the major takeaways are:

• Avoid commoditized markets with copycat products
• Find differentiated designs that add unique value
• Identify keywords with high volume and low competition
• Target just 10-20 terms to start and get initial sales
• Use keyword revenue estimates to inform launch strategy
• Start small and reinvest profits to fuel growth over time

Thanks for reading! I hope these product research tips and myths help you find and launch winning products on Amazon.