Amazon Product Research: Manual vs. Automated

Knowing what to sell on Amazon can be one of the most difficult decisions a seller makes.

With millions of products already listed on the Amazon marketplace and countless private label and bundling opportunities to consider, today's merchant must be judicious when building their product catalog. Being overly analytical, however, can cause you to miss out on timely opportunities.

What's the right mix?

In this post, we'll explore two common options for doing Amazon product research and take a deeper look at how to identify the high-margin products that can help boost your profits.

Manual Amazon Product Research

One of the things that makes you such a great seller is your uncanny understanding of customer needs. As new catalogs arrive from suppliers, your instincts kick in, allowing you to hone in on the dozen or two products worth sourcing.

Even with your knack for anticipating consumer demand, there's still a considerable amount of analysis involved with the sourcing process. If you're like most sellers, you probably follow these steps:

Create (or clone) a spreadsheet. Perhaps you have a go-to spreadsheet template you use as a starting point. Or, perhaps you prefer to start fresh each time, building your calculations on the fly. Either way, this step does eat up several minutes of your time.
Click through Amazon product detail pages. Before issuing any POs to suppliers, you typically spend an hour or two gathering Amazon market intelligence for each ASIN. Buy Box prices, number of sellers, category, and rank are just a few of the important data points. All of this gets keyed into your spreadsheet.
Crunch the numbers. Once your spreadsheet contains up-to-date information, you then get busy comparing each item's estimated profitability and fulfillment fees. Those that offer strong margins rise to the top, and those that don't float to the bottom.

Altogether, this process might consume an afternoon of your time. At face value, this may not seem like a big deal. Clearly, making informed sourcing decisions should be a top priority and worthy of your attention. On the other hand, you're an extremely busy person with countless orders to fulfill, feedback to solicit, returns to process, and FBA shipments to prep. Streamlining the research process could certainly deliver value to your business. Obviously, the big question is "How?".

I'm glad you asked.

Automated Amazon Product Research

Smart merchants invest in the Amazon product research process. Some Amazon sellers choose to invest their time in a manual approach, while others prefer to outsource the process with software.

Many allow you to simply copy and paste an ASIN into the tool to receive a detailed product analysis that might have otherwise taken hours to create. You can use the various software features take a deep dive into the product data, from revenue and sales potential to estimated fees and even competitor tracking. You'll gain a better understanding of how much demand there is for a product, who's selling it, how much it will cost to source it, and how much you could potentially make by carrying it.

It may take some time to make sense of it all, but instant access to this invaluable data will help you make smarter stocking decisions in the long run.

How to Identify High-Margin Products to Sell on Amazon

With so much demand being funneled through the Amazon marketplace, it's no surprise that the competition is rather intense. Competition, as we all know, is good for the consumer - but it's rarely helpful for the merchant's bottom line.

So, how can you find the right balance between demand and profitability? Here are a few options.

Utilize Supplier Data

In many cases, receiving updated pricing data from a supplier can lead to a lot of work. Which ASINs will require a price adjustment in order to preserve profitability? Are some of my best sellers being discontinued? Did my freight assumptions change? The questions can seem overwhelming.

On the other hand, new supplier catalogs can also represent a big opportunity for the motivated merchant. Exciting product launches, clearance blowouts, and seasonal promotions are good examples. Unfortunately, with so many changes to your existing product catalog, it's easy to run out of time and miss out on new opportunities. This is especially true when your supplier provides everything in a PDF or printed format.

Some suppliers are at least gracious enough to expose pricing data in spreadsheet format. This makes it somewhat easier to identify potential winners. For example, let's say you sell jigsaw puzzles. Your top supplier updates its catalog quarterly and sends you a CSV that contains wholesale pricing, MAP (minimum advertised price), status (new, clearance, etc.), and the quantity available for each SKU. With some spreadsheet wizardry, you're able to build a sortable formula that isolates potentially high-margin clearance items.

Cross-Check Supplier Data to Amazon Data

It's feasible that sellers with small catalogs could manually cross-check supplier data to Amazon listings. After all, it only takes a few moments to:

Search and find a product on Amazon.com
Check the Buy Box price
See how many other sellers are competing
Make note of the Best Seller ranking

Multiplied across several thousand SKUs, however, this process becomes practically impossible. Even with an army of market analysts to assist you, you're looking at several days or weeks' worth of work. Once done, there's no guarantee your data will still be accurate. Remember, the Amazon marketplace is a highly dynamic ecosystem. What may be true now could be a completely different story by tomorrow (or even a few hours from now).

Reliable Information Leads to Healthier Margins

Successful sellers make an effort to identify products that offer a blend of popularity and margin potential. As we've discussed, this relies heavily on the merchant's ability to analyze a variety of data points. And regardless of whether you take a manual or an automated approach, just be sure that you're employing the most up-to-date information possible and continually evaluate the results to adjust your strategy accordingly.