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March 10, 2022

Sell Rank Win Ep. 39: Top 5 Metrics for FBA Product Research


Sell Rank Win podcast by MerchantWords episode 39

In This Episode

In this podcast and video episode, Tommy explains the five (5) most important factors to consider when searching for profitable products to sell on Amazon.

TRANSCRIPT

Tommy Beringer:

What's going on, everybody. Welcome to the Sell. Rank. Win. Podcast. I am your host, Tommy Beringer. And in today's episode, I'm going to go over the five main metrics that I look at when I'm doing product research. So let's go ahead and dive in. So I am also doing this on video. So if you're listening to this in your car or the audio, wherever you are, I recommend you go over to our MerchantWords YouTube channel and check out the video there. I'm doing a over-the-shoulder view of me doing some product research inside of MerchantWords. Okay. So here I am in our classic search.

To get here, just go to the CS on the side navigation, or just type in a keyword in the search bar at the top of the page. And what I did here is I type in an asterisk into the search bar and what this does, it brings up all of our Amazon or all of the keywords from Amazon from the highest search keyword, all the way down to the lowest search keyword. So over the last 30 days, we have found over 103 million keywords in the US alone, which is pretty crazy. And now you can see all of the keywords from the highest search all the way down to the lowest like I just said.

So I like to start here. And of course, if you have a keyword or keyword market, you want to dive into, you could just type it into the search bar and do the same thing. But I like to start here so I can get ideas. And I scrolled down and I just hovered over the magnifying glass and then went to classic search to research this keyword on classic search. And I chose bathroom rugs for this example.

So here I am in bathroom rugs in our classic search. And now the first metric that I look at, the number one metric that I look at is search volume and the search market size. So we have surfaced a metric called search market size that is up on the top left corner under our performance insights on our classic search tool. And now for bathroom rugs, I'm looking at it, it's roughly 4.5 million, or excuse me, not 4.5 million keywords. That's the total search volume for the top 100 keywords in this keyword market. So this is very high. This might push me away from getting into this market, but for the case of this episode, for this podcast, and show you guys all the metrics I dig into, we're going to continue on here. So I like to see the search market size a little bit on the low side.

And of course, if you're a larger brand, you have a bigger budget you can go in here. And a large search market size is going to, especially if you're a large brand in the space, in the bathroom rug space, and you're not on Amazon yet, a large search market size is enticing to you because you're going to go on there and take that market share with your big budget. But if you're a smaller Amazon seller to medium Amazon size seller, you want to look at products that will rank quickly, and you'll have a better chance at, in a bluer ocean rather than a red ocean, a bloody ocean, right? So the search market size, like I said, it is the sum of all of the top 100 keywords, the search volume. And coming down here, you can see the keywords here.

So bathroom rug makes up a good portion of that. And then all of these other ones here. So bathroom rugs, this keyword market is kind of top heavy, which is a good thing if you are a seller trying to get into this market, a smaller seller, medium size seller. But I still would not get into it, but all of these other keywords here do have lower search volume, which I like to see. Still on the high side, but you are definitely going to see some competition here. So that is the first thing I look at, is the search volume and then the search market size. And I like to see at least 10 keywords that are hyper relevant to what I want to sell, because those keywords are, you got to think of those as roads leading the buyers to your product on Amazon.

If you don't have a lot of keywords, not a lot of people are going to see your product. If there's only one or two ways that they can describe it, it's not a good thing. So you want to have many keywords and you want to have good search volume, but not too high of a search volume. So something between, I'd say 1,000 and 20,000, maybe 30,000 is good and you always have to continue to test out and see what's best for your business. So let's go on to number two. So you want to look at reviews and what you do here is you want to go over to our page one products tool, and you can just do that by clicking on the P1 here on one of the keywords. And it will take you over to the page one products tool. And I did that for bathroom rugs already coming over here.

And now this is basically a snapshot of what you see on the first page of search on Amazon for the keyword bathroom rugs or whatever keyword you selected. And now I like to see between, I want to see about the top seven to 10 products have less than a 100, 150 reviews, because that's going to tell me that I can compete in this market. If it's up to 200, 300, not a lot of them have it. It's still okay. Just know that you're going to have to spend a little bit more money on your ad spend to get into the sought after top positions of the page one of Amazon. So as I'm looking now, this product, or this company is in the number one organic rank position. These are the organic rank positions here, and they have over 1600 reviews. The second position, 13,000. Number three, the third position, 39,000.

So this is immediate no for me, because if I'm coming in here as a smaller seller, then I have to compete with all these big boys here. And I don't want to do that because I will probably get crushed and I don't have as much as myself as a smaller Amazon seller, I don't have as much budget to compete here. But of course, if you're a large company, a large bathroom rug company, and you're trying to get into Amazon, you can go in and compete here. So that's totally fine. So I'm telling you guys from both sides here, from the smaller seller's perspective, which I am, and then also the larger brands.

Okay. So now number three is results. So let's go back over to our classic search tool. And what I like to see here is at least 10 of these keywords in the keyword market that I am doing research in, I want to see at least 10 of these keywords have 300 results or less. So the less results the better, right? So the less products that are on the market, the better chance you're going to have at getting a piece of the pie. And again, that's for the smaller seller. For the bigger sellers, they don't care. They're going to come in with their big budget and push out anybody. So anybody that's in their way.

So you want to see roughly 300, 400 results and 300, 400 results for one keyword does sound like a lot, but it's not. All of those products that Amazon is showing are not always hyper-relevant to the keyword that you have entered. Like for example here, bathroom sets with a shower curtain and rugs. So there's 10,000 results. So this maybe show for the results, maybe just bathroom sets. Maybe some don't have a shower curtain and a rug. So it could be other types of bathroom sets like with lotions and I don't know, whatever. So you have to do your due diligence and continue on and say, maybe these 10,000 aren't relevant to this product, but let me look into what is showing up on page one.

So go back to the page one tool. And for bathroom rugs, see maybe if there's something here that doesn't, you're not comparing apples to apples here or you have to compare apples to apples, excuse me. So if there's a bathroom rug that you're trying to get into, into that space, and there's, I don't know a kitchen rug in here, and the kitchen rug has tons of reviews on it, then maybe it's okay to get into that space. Again, don't get into the bathroom rug space. It looks very saturated. But for results, you want to make sure that it's on the lower side, at least 10 of these keywords here, 10 to 15 keywords have under like here, let's see. This one has 200. Oh, and that's because it is a branded term. So Mayshine bathroom rugs. So this company is probably doing fairly well. They have roughly 200 results that is leading right back to their own brand, which is pretty cool and a search volume of 25,000. That's pretty good as well. Okay.

So going on, that was results. So now number four, I'm looking at the sales and the revenue estimate. So you can see our sales and revenue estimates in our ASIN plus tool and also in our page one products tool where I am right now. So in the summary here, we give you the average revenue of the page one and the average unit sold on page one. And what I like to do is drill down into each product here and see what they are making. And this is for the last 30 days. We have gathered this data for the last 30 days. And so I look at roughly and conservatively 1% to 5% of the total revenue on that page one.

So all of these added up, I like to look at what that is, and I could kind of guess that that's what I'm going to make if I do make it to the top 15, top 10 positions on page one of search for those main keywords. So if I'm doing a good job getting to the top of the page on those keywords, I can compete here and make roughly 5%, maybe even more depending on how aggressive I want to be with ad spend. And I can get a piece of the pie here. So that's what I look at. I look at, conservatively, I calculate 1% to 5% of the total revenue on that first page. And you can do the same for the units sold as well.

All right. Now number five is the price. So for Amazon, you want to be able to sell your product for roughly 20 bucks, 21, $22. And when you source that product, you want to make sure that it is no more than 25 to 30% of what you're going to be able to sell it for on Amazon, because Amazon does charge you fees, those fulfillment fees, and you have to calculate, you're going to give a third to Amazon. A third goes to your shipping and to your product costs and production and all of that. And then a third would hopefully go into your pocket. So if you can sell a product for roughly 20, 21, even 19 bucks, 20, 21, 22, 23 bucks say, and you can source that product for about $4, $5, $6 landed, meaning with shipping costs in all, all in, into your Amazon warehouse, then it's a pretty good idea to go ahead and go with that.

So of course there's going to be other variable costs. There are also storage fees, but hopefully, you don't get any because you're selling the products. But just continue to look in that, look into those fees. But you should be pretty safe if you can source it for about, or land it into the Amazon warehouse four, or five, six bucks. And then you can sell for about 22, 21, $23. And then also if you can source a product and get it landed into the Amazon warehouse for like 50 cents, then you can obviously have a lower price that you can release it on Amazon. For example, I'm selling a product on Amazon for roughly 15 bucks right now, but I can get that product landed in my Amazon warehouse for just a little over a dollar. So I'm pretty safe there. After PPC costs and everything, I'm okay.

So guys, just want to let you all know that no one has ever drowned in their own sweat. And my good friend, Dave Kettner has reminded me of this, and just, it's a marathon. It is not a sprint. Don't think you're going to come out of the gate and be a millionaire or start making five figures a month. That's not the case. If anyone has told you that, they're lying. And you just got to put in the work. Give it at least a year. Some people say six months. I say, give it a year. And all in say, you were going to launch a pizza business or brick and mortar or something like that. You're going to have a lot more overhead there for rent, for opening costs, hiring employees, buying all the equipment. The overhead is going to be insane.

So if you can get into starting an Amazon business with 10,000 bucks, 15,000 bucks, some people say you can do it for $1,000. Don't listen to that junk. Please. You'll need at least a minimum of $10,000 from what I'm seeing, especially lately, but that is nothing compared to what your costs are going to be if you launch a brick-and-mortar or something else. So if you stay online, you can be safe with something like that. And guys, again, it's a marathon. And if you have any questions on anything, always please feel free to reach out. You can reach out to me, give me some feedback. You can reach out directly to me, [email protected]. And guys till next time, stay awesome and be awesome.

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