- I have 50 high potential products and no idea which one to sell.
- I need to pick a brand name and my brain is frozen.
- At first, this supplier seemed trustworthy. Now I’m beginning to wonder. Does this mean I have to start all over with a different supplier?
- I have the product I’m going to sell and 379 ways to differentiate it. How on earth do I decide which differentiations to go with?
- My head is going to explode with all the information. How do I know what to do next, what’s important now, and what matters later?
- My PPC campaign is about 200%. I know 200% profit margins are awesome but 200% ACOS does not look right. What am I doing wrong?
- I’m scared of failing.
- My product needs to be perfect.
If any of these resonate with you, I have good news for you! First, you are normal, and second, you don’t have to stay stuck. At the end of this post, you may download a free but powerful tool you can use to help you get unstuck when trying to decide on a product. But first I am going to offer three steps you can take to get yourself un-stuck.
#1: Remind yourself why your company exists in the first place.
Ask 100 Amazon sellers, “Why does your company exist?” and you will get as many answers as colors in the rainbow.
Let me qualify the question: I am not talking about your long-term personal goals like time with your kids, traveling the world, or paying off our house. I’m talking about the immediate goal of your Amazon company.
Perhaps you think it’s to provide amazing customer service. I’ll never forget calling AT&T, back in the day when I purchased locked cell phones on a contract, and I became convinced the phone menu was built to torture humans. When a real human being finally talked to me on the phone, I could only understand every other word. Horrible customer service yet AT&T is still going (in spite of SBC Communication’s massive purchase).
Maybe the goal of your Amazon company should be to provide more jobs. Grow fast, add on employees, and now you are helping others. This one sounds super progressive and economically sensitive, but is it really the main goal?
Could it be cost-effective purchasing? Producing amazing products? Capturing market share? This one sounds pretty smart and financially savvy.
These are not the goal but means to serve the goal.
Another way of asking this question: What is the one thing that if you fail to achieve, your company is finished?
There are companies making crappy products, but they still exist.
There are companies not providing any new jobs, not capturing any more market share, and doing terrible at cost-effective purchasing, but they still exist.
As materialistic as it might sound, everything you do for your company must revolve around the goal of making money.
If you fail in this goal, #1) your company will die and #2) your personal goals—the ultimate reason you started this company in the first place—will not be reached.
Eliyahu M. Goldratt, in his book, The Goal, says:
An action that moves us toward making money is productive. An action that takes away from making money is non-productive.
#2: Accept that you will make mistakes, lose money, and be treated unfairly along the way.
You cannot expect yourself to do everything perfectly. If you cannot accept this, you are not cut out to be an entrepreneur. Entrepreneurs encounter the best and the worst. Success and wealth come with a cost. Have you tallied the cost?
You are going to mess up along the way. Instead of resisting failure, embrace it as part of the learning process. When I worked as an employee for Apple, FedEx Kinko’s, and Xerox at various times in my life, I was haunted with a constant awareness that I was supposed to not mess up. I was supposed to stay between the lines and be a good employee. This held me back from taking healthy risks. That kind of corporate thinking is utterly destructive to the success of an entrepreneur.
Carlson and Wilson, the founders of Xerox messed up.
Fred Smith, founder of FedEx, made a lot of mistakes.
Steve Jobs was anything but an angel of perfection. And if any of these entrepreneurs had not been willing to mess up, their companies would not exist today.
Stop thinking like an employee. and start thinking like the boss. You are the owner of your company. You will climb that mountain—snow or sunshine, blizzard or blue skies, the mountain will be conquered!
#3: Use the right side of your brain to connect with people (buyers and market). Use the left side of your brain to make business decisions.
My friend, Dennis, is the most social person I have ever met. If you are within ten feet of him, he’ll find a way to strike up a conversation with you.
His emotional intelligence is very strong. He reads people, gets perfect strangers laughing, and helps them feel very comfortable talking to him. That ability to connect with people is a fierce marketing weapon when used the right way.
But when making business decisions, you need to engage the other half of your brain.
How do you do it? I created a tool to make this very simple when trying to choose which product to sell on Amazon.
Make a list of all the pros; make a list of all the cons; let the facts guide you. If the numbers add up, pull the trigger. If they do not, keep hunting.
Let’s say you have narrowed your Amazon research down to three products and still cannot decide which one to go with.
Give each data point from your research (such as sales volume, monthly search volume, the number of top-performing competitors, etc.) a number of points using the following point system:
Daily sales volume
This means sales volume of the product’s top competitors.
- $100-$400/day = 4
- $401-$700/day = 8
- $701-$1000/day = 12
- $1001 and up = 16
Monthly search volume (for the main keyword):
- 5k-10k monthly searches = 2
- 10k-20k monthly searches = 4
- 20k-30k monthly searches = 6
- 30k and more monthly searches = 8
For example, if the product is a plasma lighter, and the monthly search volume for “plasma lighter” is anywhere between 5,000 and 10,000, give the product 2 points. If the search volume is 23,000, it gets 6 points.
- Going down = 1
- Steady or erratic = 2
- Going up slowly = 3
- Spiking = 4
Number of top-performing competitors
(You know it’s a top performer if they are doing 8 sales or more/day).
- 21-25 competitors = 4
- 16-20 competitors = 8
- 11-15 competitors = 12
- 5-10 competitors = 16
Number of median reviews of top competitors
- 501-750 reviews = 4
- 351-500 reviews = 8
- 201-350 reviews = 12
- 100-200 reviews = 16
- $1-$5 = 2
- $6-$10 = 4
- $11-$15 = 6
- $16 and up = 8
(Determining the level of differentiation is difficult as there is no exact, measurable data to use. You will have to make this judgment call as you read the critical reviews of your competitors and find out what works and what does not).
- Low opportunity = 4
- Medium opportunity = 8
- High opportunity = 12
- Incredible opportunity = 16
Each piece of data is assigned a number of points based on the data itself and also based on the weight of the data. For example, your product can receive 2, 4, 6, or 8 points for its gross profit potential but 4, 8, 12, or 16 points for its daily sales volume. This is because sales volume receives more weight than profit. Why does sales volume carry more weight? Because at this point in the research process, you don’t know the actual profit, but only estimates. Once you are negotiating with suppliers, you will have a much more definite figure for the product.
Why does monthly search volume carry far less weight than daily sales volume? Because sales volume is a stronger indicator of demand than global search volume.
Add the numbers up for each product and the product with the highest score is the one you choose to sell on Amazon.
When choosing the right product to sell, don’t let your emotions lead you. Do what the numbers say. This takes the emotional, subjective element out of the process and de-risks you as much as possible. You can take this same analytical approach and apply it to choosing a supplier, picking a trademark, or differentiating your product. Create a system with measurable data points, giving each piece of data a number value, and then decide.
Whatever you do, keep thinking, but do not stop acting.