Our Collaborative Launch Session #1: FBA Private Label Product Ideas

Welcome to the Jungle Scout Collaborative Product Launch! Glad you are joining us, as we launch a private label product to sell on Amazon. We will start from scratch, and go through every phase of a product launch: gathering FBA private label product ideas, analyzing and selecting the product, sourcing manufacturers, launching, and optimizing the listings. We will share every step of the journey, in all its unpredictability, challenges, and successes. So let the fun begin!

Here is a video replay of the webinar we held last week where Greg Mercer, Founder of Jungle Scout, walked us through his thought process as he looks for profitable private label products. If you want to catch the next webinar on Tuesday October 20th at 9p EST/6p PST where we choose the product we will sell, register for the webinar here.

 

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Why are we doing this?

The notion of transparency has become an adopted tool to help teach, learn, and build communities. Maybe you’ve seen Pat Flynn’s Monthly Income Reports, Buffer’s entire payroll breakdown, or a variety of marketing tactics on Growth Hackers–each has taken a fearless approach to sharing details and failures in an effort to share the learning opportunities. However, there has not been a lot of transparency in the Amazon Private Label community, and we field a lot of similar questions from Jungle Scout users asking about product selection, competition, and launch processes. We realized that it could be helpful to everyone to launch a private label product together, from scratch, with full transparency.

 

The community of Amazon sellers is supportive and collaborative, and we felt that launching a product together could be a good way to give back by sharing the details of what does not often get shared. Furthermore, collaboratively launching a product would be a tremendous learning experience for all of us, as we test different tactics, optimize, and analyze, and ultimately everyone will be able to sell more effectively on Amazon.

 

A few notes before we begin:

• We are doing this in “real-time”, meaning that we don’t know what product we will sell, how we will source it, or how it will perform. Of course there’s the private label blueprint to launch that we will execute, but there are many variables along the way. Our goal is to have a product listing live for the holiday season, but we will have to plan for unforeseen contingencies. So thanks in advance for your patience in attending the webinars on a sporadic schedule! At the very least, we will plan to host them on Tuesdays evenings. The next webinar is scheduled for Tuesday October 20th at 9p EST / 6p PST, you can register here. This will be recorded and we will share the link afterwards.
• We will donate all proceeds from our listing to a non-profit or charitable organization. The exact organization is still to be decided, and we are hoping to get your input on the decision. Please share any suggestions you have in the comments below!
• We really want to emphasize the collaborative aspect of this product launch. We want to get your input throughout the whole process: your questions or comments in the chat room during the webinar, in the Amazon FBA Competitive Edge Facebook Group, in the blog comments, and Twitter. We will be monitoring each of these platforms, and hope that we can get a lively dialogue going.

 

The Ideal Private Label Product Criteria

The main criteria we are looking for when gathering product ideas will be the following:

• Price point between $20 and $40.
• Small and lightweight.
• Existing demand on Amazon (we do not want to try to create demand, just leverage existing demand)…more on this later.
• Minimal competition, determined by the number of competing sellers and the number of their reviews…more on this later.
•  No liability issues–knives, blow torches, or anything where there could be a lawsuit is not ideal.
• Simple product, where quality control and manufacturing will not be an issue.
• A product that can be sourced from China.

 

The main goal in finding product ideas is to identify items currently sold on Amazon that fit in the sweet spot of proven demand and manageable competition. These are the ideal untapped opportunities that Greg looks for when gather potential private label gems.

One thing not mentioned in the webinar that Greg has discussed previously is the importance of finding one profitable product vs. finding a product that fits within the scope of a line of products that comprise a brand. Greg has successfully built several private label brands, and tries to find products that can be part of a brand, instead of just a one-off product.

What tools do you need to find possible products? Simply put, not much. There are two methods that just require some time and clicking, he calls the “old school method”.

 

Old School Method #1: Browse Amazon

Start at the Amazon Best Seller Page and drill down in various sub and sub sub categories looking for product ideas. The relevant information can be gathered by scanning through each product page: the number of reviews, Best Seller Rank, and using Jungle Scout’s Sales Estimator, an estimate of sales per month for any given BSR. Here’s what that would look like:

Old School Method #2. “Spy On Other Sellers”

The second method that Greg recommends for those without any product research tools available (ie Jungle Scout) is to click through on a brand name or link to see what other items the brand or seller carries. From there, click through on any listings that may be interesting and fit the ideal product criteria, or if you do have Jungle Scout available, it is easy to quickly see which products are selling well and could be something that you choose to private label. Here are some screenshots of what that looks like:

 

These Old School Methods can be quite fruitful and turn up some great products, but they do require time, and not an ideal use of limited minutes on a live webinar! After some browsing, we bring it to the present “New School”….

New School Method #1: Jungle Scout’s Web App

The third easy way is to use the Jungle Scout Web App. In short, the Web App includes a Product Database that reorganizes Amazon’s catalog to make it easy for sellers to find product ideas. Whereas Amazon’s current catalog is obviously designed to make shopping as a consumer easy (and addictive), the Web App is designed for sellers by allowing you to filter by criteria helpful to sellers (estimates sales, number of reviews, FBA fees, and much more). While not a required tool in product research, it supercharges product research capabilities, so at least worth using for the 14 day free trial.

 

This is a screenshot of the Web App, and the filters available to identify products that could work for private label. Greg used some basic filters of products priced between $20 and $40, selling at least 400 units per month (to average more than 10 units per day), and something with less than 50 reviews (which is a proxy for a product that is not too competitive–maybe it’s a new product or just a product without much competition). Greg did not include the following categories in the search: Cell Phone, Clothing, Computers and Accessories, Electronics, Jewelry, Photo, Shoes, Toys (too much seasonal Halloween stuff at the moment), Watches. The screenshot of his filter in the Web App looks like the following:

 

There are many ways to filter the Product Database, depending on what type of product you are looking for. For example, you can look for products specifically with low ratings, or strictly oversize products, or items only in your favorite category that have a net profit of greater than $15 after Amazon fees. It’s totally up to you.

So we took a first pass through the Product Database results with this general filter, knowing that we could always niche down later. With 200 results per page, it becomes the equivalent of flipping through your a SkyMall catalog–Greg scans through listings looking at the images looking for the simple products that could be private label. There was a fair amount of branded items (Under Armour, Adidas, etc that would be very difficult to compete against), and some complicated items like thermostats that would not be good.

 

One additional criteria for Greg is the “Weirdness Test”. Essentially, the more obscure and random product, the better. In Greg’s world of private labeling, getting social approval is not necessarily a good thing, as the more mainstream and recognizable a product, presumably the more competitive it will be.

 

The products and main keywords that made the initial cut:

• “Hard Hat Helmet”
• Film Canister
• Saucer for plants
• Pull up grips (for crossfit)
• hair catcher for your drain

 

So let’s dig into these products and see what we find:

Film Canister:

 

And looking at the Jungle Scout Results:

This looks promising:

• Low competition, 26, 29, and 76 reviews in the top three results.
• Poor images that could be improved
• There is opportunity to package in bulk and increase margins on each sale
• We could run a small giveaway of 50 products and hope to get 35-40 reviews. That should place us in the top 5 organic results for the main keyword, and we would start getting organic sales.
• One negative is a lower than ideal demand. We look at overall sales to assess this, and it’s maybe 2500 or so units sold per month which is not as deep a market as we would like.
• This is an obscure product, so passes Greg’s “Weirdness” test for products that are not trendy and will likely not have a surge of competition any time soon.

 

Drain Hair Catcher:

This product was a quick study, as it was pretty apparent that the margins after Amazon takes its FBA fees would not be worthwhile to pursue. The listing that caught Greg’s eye:

A red flag is when the top items are priced less than $10 per unit, it will only net $2-$5 per unit sold (and that’s not including our cost of goods sold, which may not be much but still an additional cost).

 

 Pot Saucer:

This is definitely an item that is good for private label manufacturing, as it is one piece with no moving parts and complicated elements. Quality control should not be an issue here. However, will there be sufficient demand and limited competition?

 Looking at the Jungle Scout results for the pot saucer, there is sufficient demand, but it is largely concentrated in the top seller, who gets more than 1500 sales per month. It is unlikely that we would sell more than 10 units per day if we sold this.

Is there a different keyword we could try to find an untapped niche? A quick look through “clear saucer” and “12 inch pot saucer” (both keywords that we saw in other product titles) didn’t show much promise either. On to the next product….

 

Pull up grips:

The Amazon organic results for “pull up grips”:

And the results from Jungle Scout:

Jungle Scout results for pull up grips look interesting:

• There is sufficient aggregate demand for the product, and sales are distributed among the sellers and not concentrated in one seller like we saw with the pot saucers.
• There are various styles of gloves, which can be a good way for us to differentiate our product from other private label sellers.
• Judging by the number of reviews for the current top sellers, Greg figures that 60 to 80 reviews should get our private label product into the top 5.
• One negative is that this product targets Crossfit enthusiasts, which is a popular trend and doesn’t pass the “Weirdness” test. We may see a higher level of competition as a result.
• Ultimately, there is no perfect item, so we will have to just choose one and move on.

 

Here are a few audience questions that several people may have:

Would it deter you if a majority of listings are sold by AMZ?

Greg believes that there’s an existing misconception about Amazon favoring products sold by Amazon over products that are Fulfilled by Amazon. The bottom line, in his opinion: you should not be scared to “compete” against an Amazon listing. In his experience, there has been no apparent advantage to products sold by Amazon. Moreover, it may be in Amazon’s financial interest to sell more FBA products than Amazon products. Here’s why: Amazon makes 15% commission on all FBA sales, in addition to pick and pack fees and other miscellaneous markups. And Amazon will not optimize their listing like a private label seller may. They will not run any promotions or giveaways on their products, they do not run pay per click campaigns, nor have lots of high quality photos or descriptions.

 

Does Jungle Scout see the products I track or look at?

No. Jungle Scout does not track or store any information that would identify a given product. Not even Greg or the customer service team can see what is being tracked. Privacy protection is a priority, and we respect the hard work it requires to find products so nothing is accessible. The only information that is even sent to the Jungle Scout servers from the extensions are the BSR and Category for products, which is strictly used to pass back sales estimates to you.

 

How do you know a product will sell through the year?

Google Trends is the best proxy here. You can see how the search term trends over the year. You can go directly to the Google Trends page, or on Jungle Scout Pro you can find it with one click (this only works in the search results for a given search query, not on any individual product page). Seasonal products are not necessarily bad if you can plan to sell for the different seasons.

 

What is the significance of tier information:

The tier information is important so you know what the FBA fees will be on a given product. Amazon’s details on Product Tier Sizes is here.

Oversized items are significantly more expensive as far as FBA fees, and there are limits to how much oversized inventory a new FBA seller can hold at one time.

 

What are the next steps ?

We have gathered some initial private label ideas and will start tracking their actual sales data on a daily basis. We have added them to Jungle Scout’s Product Tracker, which will get daily inventory, unit sales, and BSR information. Next week we will look at this information and get a better idea of the products’ daily sales, and whether the other sellers have used promotions or giveaways to boost their BSR.

We will reconvene on Tuesday October 20^th to choose the product we will launch. We hope that you can join us live, or share your questions, comments, thoughts with us in the blog comments below, the Amazon FBA Competitive Edge Facebook Group, or Twitter.

And we are collecting ideas for which non-profit or charity to donate the proceeds to, so please let us know if you have a good idea to share. Hope to see you on Tuesday October 20th!