Understand Market Size on Amazon by Doing Product & Price Research with ScopeKatie Reilly
Finding the right product to sell on Amazon—whether you’re already selling and want to expand your catalog—or getting started for the first time—is a constant challenge. The easiest way to find your next opportunity is with an Amazon product and price research tool. And I want to help you find it!
When it comes to finding the right product, there’s so much more to selling than just price. Certainly, you can’t sell a product for more than a buyer is willing to pay. However, there are times when somebody is only willing to pay a fraction of the cost. In this situation, you’d have to outlay in order to sell that product. This can be for several reasons: you can’t find a reliable source, the production costs or associated taxes are too high, your operating margins are fixed and too high, or any other number of reasons.
That’s why proper research into the actual cost and pricing of a product is critical to do before you launch it—and really before you even make the decision to sell it.
Scope can help you do most of this investigative work. I’m excited to talk about all of the data that Scope has to help you find products you’re interested in selling, or interested in competing against!
Use Scope for Initial Market Research with Keyword Search Volume and Market Sizing
In June, I introduced you to the idea of market demand using Scope. In summary, I suggested that you can use Scope to find Amazon keyword search volume and combine that insight with pricing information for an ASIN. Combining the two shows you a good indication of the size of the market and whether a product is worth investing in to sell.
But once you’ve found a product or a few that look attractive, it’s time to do a little more digging to determine whether you can be profitable.
Get Help Estimating Amazon Fees
Scope includes sales performance and other metrics for any ranked product on Amazon, which I will discuss in an upcoming blog post. But one of the great features here is that Scope gives you an idea of what Amazon fees you can expect for a product.
This is, of course, pulling from any ASIN you research, but you can use this at least as a baseline to model your profit.
There are two important fields here:
1. Amazon Commission
This value is a combination of the fees that Amazon charges sellers who sell that product. There can be a lot of them and you can find more here on Seller Central. If you’re researching a competitor product (and not the product you want to sell) know that this is going to be a rough guess.
2. FBA Fee
This is a great consideration if you have the ability to fulfill orders yourself or if you’re considering a different Merchant Fulfilled partner, like ShipBob.
Play with Pricing and Cost to Determine Profitability
We’ve talked about profitability before, and it’s critical to the success of your business. Scope allows you to plug in a unit cost. But understand that the unit cost is more than just the per piece cost you pay for a ready-to-sell product.
There’s also Cost of Goods Sold per piece (COGS), which is an important metric because it’s a profitability measure. It evaluates how efficient you are in managing fees outside of Amazon in the production process. This will include any fees, wages, or other costs broken down per piece, but again—only those outside of Amazon.
Once you enter your unit price value, you’ll see that Scope automatically updates based on estimated sales and all of the cost levers. If you find an estimated monthly profit that meets your hopes then you’ve got a winner!
Keep an Eye on Profitability
Staying profitable means the work doesn’t stop with choosing a product. For all the tools you need, including analysis and profitability, check out Seller Labs Pro’s full suite of Amazon Seller tools.
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