Search a keyword on amazon.com, and Niche Hunter will give you the market potential for that product idea by comparing data from the 10 top organically ranking listings for that keyword.
Search your keyword on Amazon.
For example, search "cat bubble backpack."
Niche Hunter will pull up the top 10 ranking listings for this keyword. In other words, if you were to search this keyword on Amazon, the top 10 listing that populate organically are these listings.
Note that if you search this same keyword on Amazon 5 minutes from now and 15 minutes from now, it might give you slightly different results each time. This is for four reasons:
- With over 270,000 purchases on Amazon every hour (which is $17 million in revenue every hour), the market fluctuates quickly and constantly. Amazon is arguably the most dynamic, behavior-learning platform in the world which is what makes it such a phenomenal convenience for customers.
- Amazon's search results are going to vary by the minute based on how much inventory is available in different fulfillment centers around the world. This changes rapidly, especially when products are in high demand or the market hits a high season.
- Your own buying patterns impact what Amazon shows you as well. For example, if you log into a different buyer account, or log out of your regular Amazon buying account, you will probably notice different listings popping up in the search results. Amazon customizes search results based on consumer buying patterns.
- Your location also impacts what you see. Try searching "cat bubble backpack" while located in West Virginia and then have your friend search the same keyword from Colorado. It is this dynamic power of Amazon's system that makes the customer experience so powerful—which gives you a huge advantage for making money by selling on Amazon. If you see different results generating, don't worry about it. By the time you get to step two in the Niche Hunter research process, you will have more than enough data to validate a product idea.
Check the Amazon product's average selling price.
Before you look at the demand, ease of entry, and differentiation opportunity, you have to know how much this product sells for. A big mistake a lot of Amazon sellers make is selling a low price product.
Your margins are squeezed extremely thin when selling low price items, like $15 or $20 for example, because your FBA fees and shipping fees are based on size and weight. Therefore, if you sell a product for $50 versus a product of the same size and weight for $20, the FBA and shipping fees are the same for both products. Yet the FBA and shipping fees are taking up a far bigger percentage of revenue for a $20 product versus a $50 product.
We recommend you find a product that does not sell for any less than $25—but ideally $35 or higher. The Average Selling Price lets me know immediately if this product is even worth considering. At $40.59, it definitely is.
Understand the three Amazon product research criteria.
You can immediately see the potential for this product based on demand, ease of entry, and differentiation opportunity. These three criteria are based on the top 10 ranking listings for the keyword you searched.
Demand shows you how well the product is selling which indicates how badly shoppers want it.
Ease of entry indicates how easy it would be to launch your own version of this product and get into the market without getting smothered by the competition.
Differentiation opportunity is like a bonus criteria, giving you a strong hint at the opportunity to make your product stand out by making it better than the competition.
All of this criteria is based on the top ten ranking listings for the keyword you just searched (cat bubble backpack). You can see the 10 listings this data is based on by clicking on Top 10 Ranking Listings on the upper right corner.
Know how to read the "Market Status" for your niche.
On the left, you will notice it says, "Market Status."
The market status is based on the first two criteria: demand and ease of entry.
Demand is measured by sales and ease of entry is measured by number of reviews.
For example, in the default settings, if 3 or more of the top 10 ranking organic listings (for the keyword you searched) generate at least $5K a month in revenue, then this means strong demand.
If 3 or more of the top 10 ranking organic listings have fewer than 100 reviews, this means this product has a high ease of entry into the market. In other words, if a product with under 100 reviews can be selling this well, this is a strong indication that you can launch a virgin product into the market, starting with 0 reviews, and do extremely well.
The goal is to find a product where the top 10 ranking listings for that keyword have the following results:
- At least 3 of the top 10 ranking listings have a minimum $5,000 monthly revenue per product
- At least 3 of the top 10 ranking listings have less than 100 reviews per product
The third criteria, differentiation opportunity, does not impact the grading of your product idea, because the majority of great products on Amazon do not have 3 or more high-ranking listings with under 3.5 stars that sell this well. Consider this a bonus.
If you do come upon a product that has 3 listings or more with under 3.5 stars, this may be a unicorn opportunity! Just One Dime included this here so it gives you a huge advantage in case you do find a product that matches this rare criteria.
Keep in mind that star ratings is not the only place to look for differentiation. You can also study the critical reviews to find differentiation opportunities, join online interest groups that nerd out about this kind of product, or look at bundling ideas for differentiating your product.
The market status will say "Amazing Market" if 8-10 of the listings produce at least $5,000 per listing every month and also 8-10 of the listings have fewer than under 100 reviews.
The market status will say "Great Market" if 3-7 of the listings produce at least $5,000 per listing every month and also 3-7 of the listings have fewer than under 100 reviews.
Anything less than this will be a "Poor Market."
Why we call it an Amazon "niche" instead of a "product."
People often ask us, "Why do you call it 'Niche Hunter' instead of "Product Hunter?" This is because you should ultimately be looking for a niche—not just a product. A niche means an entire market for that product.
Any time you are hunting for a new product to sell, you must understand that a product's potential can never be based on the performance of just one keyword for that product. Every product typically has 25-50 different keywords that shoppers use to find that product. To really understand a product's potential, you must study its top ranking and most relevant keywords.
And that is why we call this tool "Niche Hunter" and not "Product Hunter." Like having multiple freeways that all lead to the same city, every keyword is like a little pathway that leads to the same basic product.
You must understand the niche—the cluster of keywords—in order to understand the market for that product.
What to do if your product idea is a "Poor Market."
Let's search "cat bubble carrier."
Notice that Niche Hunter grades "cat bubble carrier" as a poor market, because ease of entry has only 2 listings with under 100 reviews. If Niche Hunter grades the product as a poor market, this saves you tons of time. You can quickly decide that this keyword is not worth spending time on and move on to something with more potential.
However, when you are struggling to find a great product in a certain niche, don't give up on that niche after the first keyword search. (As we know, "cat bubble backpack" is a "Great Market." )
There are two things you can do when your market is "poor":
1. Click "View Related Markets" on the left side. Related markets not only give you a host of other product ideas, but Niche Hunter quickly tells you if any of these qualify as a great or amazing market.
2. Niche down. By "niche down," I mean go into a more specific category. Usually this means adding one more descriptive keywords onto your original string of keywords. Instead of looking for a cat bubble carrier, let's try searching, "cat bubble backpack expandable."
Notice that of these top 10 listings, 7 of them are doing over $5,000 a month, and 4 of them have under 100 reviews. This is a sign of a great product opportunity.
Check your potential profit of your Amazon product idea.
Now that you know you have a great product idea, you need to check your potential profits to be generally sure you can make money selling this.
First, click "Top 10 Ranking Listings" on the top right tab.
Then click on a listing.
Here you have a ton of helpful information on that particular listing.
But for now, all you need to focus on is the profit potential.
"Selling price" tells you how much the product for this listing is currently selling for on Amazon. "Cost per unit" means the cost of purchasing this product from a supplier.
Niche Hunter automatically puts in a cost per unit amount that you would need in order to achieve 40% profit margins. We recommend this as a minimum profit margin when hunting for new products to private label.
You immediately have a goal price per unit in order to reach a 40% profit minimum. Keep in mind that this does not include the cost of shipping your product to Amazon, so make sure you account for this.
The cost per unit box is dynamic. Let's say you want your product to be a minimum of 50% profitable. Just drop the cost per unit number until the profit margin shows 50%.
Niche Hunter was built dynamically so that you can easily adjust your numbers to match your strategy and business goals!
Next, check what your actual costs per unit will be. Click "Source on Alibaba."
Niche Hunter will automatically search that keyword on Alibaba to give you preliminary price estimates for sourcing this product.
Then, you can come back and adjust your "Cost per unit" entry and see what is a realistic profit margin. Don't forget you will also have shipping costs!
How to customize your product research criteria:
Niche Hunter's default settings are set up to find you a very strong product. But you might want a product with more potential revenue or less competition. As your knowledge about Amazon business grows, and you understand the various markets in different product categories, you will find the ability to customize your settings more helpful.
For example, let's say you are launching a product in Kitchen or Health & Beauty, both of which are strong growing market categories. The sales volume is very high for both of these categories, so you might want to adjust your minimum revenue settings to $10,000 instead of $5,000. This allows you to only find the higher sales volume products. So let me show you how to customize your settings in Niche Hunter.
Click the gear icon in the top right corner.
You will see four adjustable boxes: Profit margin, Revenue, Reviews and Rating.
The default profit margin is 40% but you can adjust this to higher or lower profit margins if you want.
Revenue. The default setting is $5,000 a month in revenue. Niche Hunter's minimum standard for great demand is that at least 3 of the top 10 ranking listings are generating a minimum of $5,000 a month in revenue. At 40% profit margin, that's a minimum of $2,000 profit a month for a single product, which is not a bad start. I don't know anyone who wouldn't love an extra $2,000 in pay a month.
But let's say that you want a product that generates a minimum of $10,000 a month in revenue for the keyword, "cat bubble backpack expandable." Ten thousand dollars in revenue at 40% margin is $4,000 of monthly income. Let's change the revenue to $10,000 and click, "Save changes."
Notice how it now shows 5 products doing at least $10,000 a month in revenue.
This product has excellent potential. Ten thousand dollars a month is very good demand for 5 out of the top 10 ranking products for this keyword.
Reviews. Now let's say you want a product that is really easy to break into the market. So you raise the bar on the # of reviews. I want the number of reviews to be under 50 so I type "50" into the reviews box and then click "Save changes."
Now I can see that 3 of the top ranking listings have fewer than 50 reviews.
This is incredible. A product with 3 listings ranking in the top 10 with under 50 reviews has an incredible opportunity.
Stars. Now you might have noticed that only 1 of these listings have under 3.5 star rating average in their reviews. And even though this is not a deal-breaker criteria, it's fun to see what we can find.
Let's lower the bar by changing the minimum number of stars to 4. Four stars is less than 5, so that means there have to be customers who bought this product and had things they did not like. Those things customers did not like are your opportunity to create a solution when you have your product built, and consequently, blow the competition out of the water. Change it to "4.0" and click "Save changes."
Two of these top 10 ranking listings have under 4 stars.
This means opportunity to differentiate.
Now that you found a great product idea, you are ready to move on to step #2 which is analyze. Analyze the best keywords based on the top 10 ranking listings for your main keyword.
This brings you to the next tool in Niche Hunter, Analyzer, which I will cover in the blog.