“What should I sell?” or “How do you find something to sell?”
This is pretty much the first question anyone asks when thinking about selling online. It’s the same for selling on Amazon.
“What should I sell and how do I find it?”
I recently did a quick “count” and found that there are MORE than 417 Million items available on Amazon. I think it’s very possible to find SOMEthing to sell.
The secret is to find something PROFITABLE to sell.
Parameters for Profit
We. Like. Profit.
After all, that’s the end goal of any business. Profits equal longevity. No profits? Your company dies.
We like to sell whats already selling. That’s what the Top 100 Best Sellers in every Category can tell you.
But, there are other rules of thumb that we use to select our products.
The 3-Times Rule
So, the first parameter is called the “3 Times Rule” or 3X Rule.
Simply stated, you are looking for something that you can sell for about 3X what you paid for it. Or that you can buy it for about 1/3 what it sells for on Amazon.
The logic goes like this: 1/3 for buying it, 1/3 for Amazon’s fees, and 1/3 Gross Profit for paying your other expenses.
This 1/3 profit is the same as your cost. We also call this 100% ROI, or 100% Return On your Investment.
The 3X rule isn’t hard and fast, but a great target to shoot for.
The minimum selling price for us is generally $10. Basic fees will start in the $3 or so range which doesn’t leave a lot of room for profit. We have a few items at about $6, but we made a very good buy for them.
Best Seller Rank
The Best Seller Rank, or BSR, is Amazon’s measure of current popularity. The Best is #1.
We like to have items generally in the 1% ranking or better.
Amazon won’t tell you how any product fits in the top %. You can find this for yourself by entering the pair of square brackets – [ ] (no space between) – into the Amazon Search Bar for the Category you’re interested in.
Amazon will search, but can’t find anything for you matching that entry, so they will offer you these XYZ alternatives. The XYZ is that Category’s item count. To get your 1%, just whack off the 2 right-hand digits, and what’s left is 1% of that Category BSR.
Anything smaller than that will be a pretty good seller.
Number of Sellers
The greater the number of Sellers, the less likely you’ll make a sale, and the more likely the price will be un-profitable.
So, we look for items with fewer than 3-5 Sellers. We really like it if none of them are FBA Sellers. (You will know this because Amazon hangs a “Prime” logo on the FBA Sellers names.) But even if they are all FBA Sellers, we’ll proceed.
We aren’t too excited to see Amazon as a Seller, because they can hog the Buy Box and make selling hard. However, it isn’t a deal-breaker for us because we can compete with them as long as we have the 3X Rule in play.
Limited number of Sellers make it easier to compete, and the Rush to the Bottom pricing wars are less likely.
Category and Item No-gos
There are more than 417 Million items available for sale on Amazon. If not restricted (Category or Brand) you can sell any one of them. However not all of them are a good item for you to try to sell.
We avoid Electronics, Computers, and Cellphones. We don’t know enough about them to know what to buy, or how current they are.
We avoid stylish and holiday items. Fashion and jewelry taste changes too much for us. We like long-term prospects.
Heavy or Over-size items cost more to ship and store.
Fads can make plenty of money early, but they get saturated quickly and prices drop like Pet Rocks. (Get it? Pet Rocks? Fad? Oh well…) What stage is the fad you’re interested in?
We like to find items with no real season, selling pretty much year-round. They should also be something that customers will need to buy again and again. Toilet paper, although not profitable for most Sellers, is a perfect example of an evergreen product.
Look around any store to refresh your understanding of evergreen, replenish-able products.
We Know About It
We should have some sense for what is popular or in demand. We should be able to spot a bargain or know when something isn’t.
What do you know about? What are your hobbies, interests, recreation, spare time activities? These are areas you should focus on. Look at Amazon Categories Top 100 products to see what’s selling.
Remember that we don’t do electronics, computers or cellphones? Even though they are super competitive, we don’t dabble in them because we don’t know anything about them. At least in the should-we-sell-it way.
Now, Go Find Something
Start in your closets and garage. I’m sure you’ll find something there that you HAD to have, but somehow haven’t managed to open it.
The thrill is gone.
Look it up on Amazon. Type in the UPC Code. Use all the numbers, including to tiny ones on each end.
Did you find it? Then Sell It!