How we source winning products using Amazon Storefronts

What you’ll learn:

  • What I define as winners for our business
  • How to find winning products via storefronts
  • How to find competitor’s bestsellers

Winning Product Probability

A while back, my mentor said that on a good day, 1 out of 10 products will be winners.

A mere 10% hit rate.

This is coming from a person whose family founded a multibillion-dollar retail company across the country. He knows what he is talking about.

When I look at our product portfolio and stats to date, he’s spot on.

However, with the software and data analysis, you can perform nowadays, this stat should be trending up.

When we started sourcing without the help of any data analysis, I shared the story of our first product and how it flopped – a microwavable silicone cutting board.

cut marks on silicone cutting board
cut marks on silicone cutting board

The second one also flopped – an expensive DIY Greentech product that makes natural household cleaners with just water and salt.

one_spray_disinfectant

Two in the fail column straight out of the gate.

We were so close to classifying our 3rd and 4th product a failure and throwing in the towel. But as luck would have it, it found the right channel.

#3 and #4 have both turned into our best sellers and have been going strong ever since.

Here’s the tricky part.

Some of our best selling products do over 6 figures in wholesale business.

However, it doesn’t sell well on Amazon.

When the products are sold in stores or direct to consumer at shows, it flies out.

On the flipside, some of our best selling items on Amazon does not sell on the wholesale side or in a direct to consumer setting.

Our retail buyers are just not interested.

So depending on the product, what you may deem a failure, could really be a huge success via a different channel.

But since we are talking about Amazon here, allow me narrow down to what I look for when sourcing Amazon products that I define as winners.

Winning Product Requirements

Keep in mind that our numbers are totally different to yours. There are different strategies to sell on Amazon. You have to pick your path.

You and I sell in different categories, have different strategies, different visions, and different everything.

Our items are mostly under $20.

If you are selling furniture that sell for hundreds to thousands of dollars, you’re not looking for volume.

If you sell generic items, turnover is most likely your KPI as you have a lot of competition.

These are rough numbers of what makes sense for us in order to label a product a winner.

  • $20,000+ in monthly revenue
  • 2,000 units sold per month
  • Average review rating >= 4.3
  • Conversion rate > 20%
  • PPC ACoS <= 30%
  • Gross margins of 40%

A product rarely hits all 6 points.

Our best seller meets 5 out of 6.

Our number two seller ticks 2 out 6.

Goes to show that there are outliers, but for the most part, our products hit 3-4 out of the 6.

With so much competition, in just about every category nowadays, it’s getting harder and harder to find a product that scores well.

But there’s a quick and easy way to see what’s working for others that you may be ignoring.

That is, looking up best sellers of your competitors.

Analyzing Competitor Storefronts

This is an old tactic, but it’s one of the easiest, most reliable and overlooked.

You can use scouting software, but it’s not 100% and everyone else finds the same thing.

I like to run through my intuition first and then follow it up with software where needed.

To see what I mean, open up “meat claws” or “grill brush”, and sourcing software will say it’s a good opportunity product. But if you look at the listings and the countless number of identical products, you know it’s not worth pursuing.

Here’s what I do.

Let’s say I want to get into the stainless steel water bottle business.

I enter “stainless steel bottle” and I want to reverse analyze this seller “Simple Modern”.

1. Click on the “sold by xxxx” to go to their profile page.

amazon storefront 1

 

2.  click on the link to their storefrontamazon storefront 2

3. This will bring up the storefront and Amazon displays the products in order of best sellers (units sold) to least number of units sold.

amazon storefront 3In this example, what jumps out is that if I was new to this category, instead of diving straight into stainless steel water bottles, which requires a lot of capital and huge competition, it’s a better idea to make some variation of a unique lids that can fit all types of bottles. Make it compatible with all brands.

Rather than investing in stainless steel bottles, going for the lids will be will be cheaper to make, cheaper investment upfront, wider market, and higher demand based on what the storefront is showing.

The stainless steel bottles can still work of course. If you have deep pockets and can afford to reinvest, test the product by hitting PPC hard and doing tons of giveaways.

But an easier backdoor entry point with higher demand seems to be the lids based on this single example.

Caveats

Amazon has made it difficult ever since they combined BSR across variants.

In this example, the #3 listing of the water bottles has 42 variant SKU’s. Instead of ranking each variant separately, all child variants have the best BSR attached to it, even though it isn’t selling at this rate.

This gives a false picture and a trap for new sellers.

If only 2 out of the 42 SKU’s make over $20,000 and the others sell 10 a month, there is no way to find out which version is the best selling one.

Scouting software will tell you that this particular item makes over 6 figures a month, and if you trust it blindly without verifying, a big mistake is waiting to happen.

That’s where more due diligence, intuition and experience comes in.

Nevertheless, the storefronts are fast shortcuts to what each seller’s best selling items are. A great way to track what competitors are doing, and to leverage the work they have already done.

Bonus Tip

You can assign this task to an assistant or a junior employee to track and provide a weekly or monthly report.

A good way to keep your product and idea pipeline fresh and in sync with best selling products.

3 reasons trade shows aren’t dead

What you’ll learn:

  • why we go to trade shows
  • what we get out of trade shows
  • how it can help your Amazon sales

Yes.

I still go to trade shows.

I’m afraid to look at my calendar because 2019 is packed. My wife and I definitely feel overwhelmed already from all the upcoming schedules and events.

But I do look forward to seeing how everything pans out when I review 2019 a few years later.

Trade shows? Eww…

First, when it comes to trade shows, people tend to think:

  • trade shows are useless
  • they are behind trends
  • waste of time and money

I attend shows for 3 main reasons which I’ll go into deeper detail.

#1 To sell our product

When we get to sell it physically, we find out which products work, what people respond to, and getting rid of excess or dead inventory.

#2 Scouting

I’ve mentioned this before but I don’t rely on scouting software for new product ideas. With so many armchair Amazon sellers, finding product ideas outside of the usual research software has been an advantage that continues to work for us.

#3 Networking

Most business owners at the show all go through the same thing. It’s a great way to pick up knowledge bombs from others and share feedback and marketing ideas.

Helping a new entrepreneur is also rewarding.

1. Selling our product

A lot of good things come from selling at shows.

It’s an opportunity to:

  • get in front of a real audience
  • identify who your true target audience is
  • gather live feedback from buyers
  • craft your pitch
  • test what works and what doesn’t

You can do all this from the comfort of your office or home, but there’s a lot of value in doing it in person.

It’s also faster and cheaper.

You could spend weeks, and hundreds of dollars doing online surveys, using custom software, sending out emails, split testing pages and headlines, and paying for ads to drive leads before you have a big enough sample size to lock down a solid result or conclusion.

But trade shows provide the opportunity to do all of the above in one setting. And within a day, you usually get the answer.

I’m not referring to big trade shows like the annual Chicago homeware show.

A couple of years back, we did a local Christmas event. Our friend was begging us to sell our stuff at her event. It was only $30 to get a table. The show/bazaar was held at her school on a Saturday from 10am-3pm.

At this little event, we figured we would work on our pitch and see what works. Didn’t expect any sales at all. Just doing it to help a friend.

But we sold over $600 in that lazy afternoon.

But the point is once I got my pitch going and was able to convert browsers into buyers, I applied the catch phrases and keywords that triggered a reaction – into my Amazon listings.

These are keywords that do not show up on google search volume, Amazon search or any SEO software.

After we updated our listing with these phrases, it started to have a big effect. We uncovered the exact pain point keyword by listening in person to what the customer was looking for and asking questions about.

Real time feedback.

Trade shows are also good places to get rid of excess or dead inventory AND do some local marketing and get the product in front of people.

With our dud products, we offer it as a freebie to incentive people to buy. We were going to throw it out anyways. Might as well use it as a promotion to increase conversion.

With each sale, we also mention our website and where they can find us. An effort to drive people to our site for future repeat purchases. Last year we started to see good results and diversifying away from Amazon is always a good idea.

2. Scouting for products

At our worst show ever, we sold $12 all day.

  • 10 hours
  • 2 people working
  • $12 total sales

Not going to lie, it was draining and demoralizing, but we found our best selling product.

Here’s how it happened.

The guy next to our booth was crushing it.

He easily made $15-20k during this show. But thanks to him, and our non-existent sales, I got to watch his pitch, his presentation, his craft and pick his brain.

The way he presents his products, the problem he makes you visualize, the dream he lays out and the solution to the problem.

We now try to create out listings, website, videos and marketing material in this way.

Don’t sell the steak. Sell the sizzle.

His presentation was so good that my wife fell for it and couldn’t contain her excitement at spending $2k to buy his stuff.

As he is packing up the goods for us, he throws in a small sample of a product to keep his products in top condition.

Again, that show was our worst ever.

But that little free sample – it worked so good when we tried it that we were literally blown away. Forget the expensive $2,000 item. We were ecstatic about that cheap little freebie.

We had to find a way to sell it.

After digging around and making numerous calls, we found the manufacturer was able to open a wholesale account.

To this day, it is still our #1 seller and getting stronger year over year, turning over thousands every month with little competition.

During the show, it was draining and annoying not getting any sales. But in hindsight, it was our biggest success ever.

This is an example of scouting luck, but hey, luck comes to those who try.

Our other products were also found in person. If we see a booth that is getting huge amounts of traffic, we analyze what the product is and why. If the product is good and fits within our scope, we improve on it and make our custom version.

Seeing as how all the low-class Amazon sellers are short-term motivated and copycats, they lag the market significantly.

While these sellers may get to market quickly with the exact same product, it’s not worth playing the same game.

There are so many shows and fairs throughout the year. Check out your local calendars to see what’s around your area, or if you have the time and budget, make an international trip. International scouting has been one of our biggest winners throughout the years.

3. Networking

Trade shows are some of the best ways to network with like-minded people.

We all go through, or have been through similar experiences and people are more open to answering questions when you talk to them in person.

If you’ve ever been to a networking event, it’s miserable. People aren’t there to network. They are there to sell.

With shows however, people are there with the same objective and are open to sharing ideas, their stories about business and life.

We found one of our best distributors from a show. He noticed that we were coming year after year, yet didn’t see us outside of our main city. He wanted to take on the product for his portfolio.

Most people at the shows also don’t know how to sell on Amazon or how to do it properly. So if you are a consultant or agency, it’s easy to pick up new business.

Many different ways to approach it. It’s the mentality that counts.

If you believe trade shows are for suckers or it’s old school and there’s nothing to gain from it, that’s the result you’ll get.

Downside to trade shows?

The biggest downside is:

  • time
  • energy

Shows are not easy if you exhibit.

I have so much respect for people who do it all year around.

But each time we’ve put in the effort, it has paid off.

You can start easily and just visit shows and fairs around you that are easy to get to. If you are a new seller, it’s a good way to be different and build up experience without a big investment.

Summary

Trade shows don’t suck.

Visit one, or sell at a local one yourself and it will make you are a better seller on Amazon.

You’ll get what you put into it.

Don’t just be an armchair Amazon seller.

Be different.