HUGE MISTAKES Amazon Sellers Make When Picking Their First Product (So You Can Avoid Them)

Are you ready to learn the HUGE MISTAKES Amazon sellers make when picking their first product?

I was recently in Orlando, Florida where I attended an event called, Seller Con. This is a 3-day event for Amazon sellers who have a desire to take their business to the next level.

I listened to some amazing speakers at the event. One of those speakers was my good friend, Greg Mercer. Greg is the CEO and founder of Jungle Scout, which is the #1 Amazon product research software on the market today. I'm a huge fan of Greg's product. I use it in my own Amazon business and have recommended it to my audience.

This is my third time interviewing Greg. In our first interview, we talked about how he makes $400,000 per month selling on Amazon FBA. In our second interview, he went through an in-depth analysis of the Amazon product research process. I encourage you to check out these blog posts, as there is a lot of great additional content on the topic of Amazon product research.

I’m looking forward to picking his brain on the huge mistakes Amazon sellers make when picking their first product to sell on Amazon. This is an information-packed interview that you don’t want to miss!

Watch the video below:

(Click here to watch on YouTube)

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Knowing the huge mistakes Amazon sellers make will ensure that you don't make the same ones.

Here is a sneak peek of my interview with Greg Mercer, where we talk about his best practices when it comes to Amazon product research.

You work with thousands of Amazon sellers. What do you see as some of the biggest mistakes that Amazon sellers make?

Choosing a product with no demand is probably the #1 mistake that new sellers make. They want to sell something because they are passionate about it, or because their friend was looking on Amazon and couldn’t find a product, so they told them that they should sell it.

In reality, nobody is searching for these very obscure products on Amazon, on top of the fact that there is no existing demand for it. Having to educate an audience to purchase something is a difficult thing to do in a search-based driven marketplace like Amazon. You want to sell products that people are already searching for on Amazon.

The second mistake that people make is choosing a product that is hyper-competitive.

The best way to gauge the competitiveness of products on Amazon would be to analyze the number of reviews on the products or just the same listing in multiple pages of the exact same product. If you search for what you believe is your main keyword and the top 10 listings all have thousands of reviews, this is a very difficult niche to get into.

It will be hard to rank your products for these types of keywords. If you aren’t differentiating your product or adding value, it will be very hard to get ranked on the first few pages on Amazon. As a result, it will be very hard to make any sales.

What is the approach that you take when it comes to finding a product?

I've never invented any of my own products. I don't have any patents on them. It sounds cool but really hard. What I try to do with all of my products is making small improvements. When I say that, we are talking about relatively simple things.

For example, I launched a towel and some of the poor reviews that I received were that it was not large enough, so I just asked the supplier to make the towel bigger. By figuring out what I need to improve upon, based off of the reviews from my competitor's listings, I'm verifying that there is already existing demand.

How would someone determine the overall demand and competition for a product?

Like you said, Jungle Scout would tell you how many units were being sold. However, without having to purchase the tool, there are some other things that you can do. One good indicator of that is the Best Seller's Rank (BSR).

If you go to a listing page and you scroll down to the product detail section, you will find the Best Seller’s Rank. This is Amazon's ranking all of the products in that category. If a BSR is 1000, then that is the 1000th selling product in that category.

That is a great indicator of how well a product is selling.

You can use that as a rough rule of thumb. The challenge with that is in smaller categories, like appliances, the rank of 1000 is only selling 100 units per month. A rank of 1000 in sports and outdoors is probably selling 10,000 units per month. If you are just starting out and experiment a bit, and you don't want to buy any tools yet, that is a good way to gauge the overall demand.

How many listings should someone look at in order to gauge the market?

I look at demand throughout a niche, as opposed to one individual product. There are definitely outliers on Amazon. Maybe they are driving traffic from someone else, or they were just on Shark Tank. The truth is that there are other things leading to that.

I like to add up the demand on the whole first page of the first top 10 products to gauge how much demand there is for that on Amazon.

Are there things that people can do in order to look at how the market changes over a period of time, rather than just researching in one moment in time?

I would recommend everyone to do this. If you already have Jungle Scout, in the extension, if you click on the unit sales numbers it will show you a graph of how many units its sold and all the historical months.

If you don't have my tool, Google Trends is a good overall indicator and a free tool to use. For example, if we were selling marshmallow sticks, we could type it in, and it would show us the search volume on Google.

This is a good indicator overall of the demand for it on Amazon.

You could say, “October is the peak month and in February nobody is searching for marshmallow sticks.” You can also see how it's trended over the past 5 years. You can determine if it's becoming more popular or dying off. Hopefully, you are in the former scenario.

How important is it to research factors like the weight of a product or shipping costs?

It's definitely important to understand the FBA fees. That's relatively easy to do. Amazon has a free estimator tool. Again, if you are using Jungle Scout, it's already in there for you. Since we are on the topic of weight and shipping costs, it's important to know that there are two different tiers of products on Amazon – standard size or oversize.

The oversized ones are bigger than a shoe box. Those products have a few more headaches for new sellers because you can only store up to 500 units at a time with a brand new Amazon seller account.

The heavier products will also be more expensive to ship.

Ideally, you want to find something smaller, but that's not to say that you should weigh out the oversized ones. However, you have to be mindful of this when you are doing your research.

When someone is stalling and not taking action with choosing a product, at what point do you tell them that it's time to just go for it and pull the trigger?

People get stuck in analysis paralysis. You see all these numbers and you don't know what to do with them, especially if you are investing a significant amount of money in your product. At some point, you have to pull the trigger.

The worst case scenario is that you break even and lose a little bit of money on your first order. However, you learn so much from that experience. You hear all of these success stories of people who are crushing it on their first product, but the fact of the matter is that a lot of people just break even on their first product.

They learn so much through that process that they end up doing really well on their next products. The biggest mistake isn't taking any action. I would encourage you to get educated about it, which you are already doing because you are on Stefan's YouTube channel.

However, after you feel like you've consumed the content, at some point you need to pull the trigger.

Could you share a little bit about your software tool, Jungle Scout, and how it can help people?

Jungle Scout is a product research tool specifically designed for Amazon sellers. If you want to get involved with Amazon, but don't know what to sell, we solve that problem for you with data.

Our tool shows you things like how well products sell on Amazon, how much demand there is, seasonality, and overall competition.

Essentially, we tell you which products on Amazon you can make money from.

Can you share with people what your web-based tool is all about and how it helps people find opportunities?

There are a few different features of the Jungle Scout web app. One of my favorites is called Product Database. We've re-built Amazon’s catalog inside of our database and added some key metrics and filtering that is built specifically for Amazon sellers.

You can go in there and say, “Show me all of the products on Amazon that are selling at least 300 units per month but have less than 30 reviews and have a poor quality listing.” It will go from 100 million products down to 5,000, and then you can look through those to find ones that you like.

If you are just guessing and not making data-backed decisions, it can be fairly risky. A lot of people invest a lot of cash to launch these products. It’s a great risk-mitigation tool to have.

I hope my interview with Greg Mercer has enlightened you on some of the huge mistakes Amazon sellers make when picking their first product.

If you want access to a tool that can help ensure that you master your Amazon product research process, I encourage you to check out Greg's website! He has been very gracious to offer a discount on his product to my audience.

When you master the Amazon research process, you are off to the races! I encourage you to just start. It will create the momentum that you in order to build a successful Amazon business.