Finding a niche for amazon FBA private label selling can be daunting. There are so many factors that you need to consider when picking a niche and finding the right product. You can’t just pick any product or niche, you have to think from the point of view of the customer and see if there are enough customers in the market who will be interested in buying your produc.
In this article, I’m going to share some factors that you should consider when finding a niche for amazon FBA private label selling.
The success of your private label FBA business is heavily dependent on the niche you choose. In this article, I will discuss the important factors you should consider when selecting a niche. So, find a niche that is both profitable and manageable.
Before we begin, it is important to understand that Amazon has a large number of niches. For example, a niche can be as broad as “toys” or as specific as “radio-controlled airplanes.”
You need to be careful when choosing a niche because if you go too broad, there will be too much competition and if you go too narrow, there won’t be enough demand.
The ideal niche has many sub-niches which are quite similar to each other. A good example of this is the “Home and Kitchen” niche. This is a huge niche with many different sub-niches such as “Kitchen & Dining,” “Furniture,” etc.
When it comes to selling on Amazon FBA, I highly recommend starting off in a sub-niche rather than going for something big like “Toys.” In my opinion, the best niches are those with low competition and high demand.
Important Factors
There are many factors to consider when finding a niche for Amazon FBA private label selling. Some of the things you need to consider when finding a niche are as follows:
Cost and Profitability
Is the niche profitable? There is little point in putting time and effort into finding products that won’t sell.
Cost is another factor that needs to be considered is the cost of sourcing for your niche products. You can easily source products from any country but how much will it cost you? How much profit will you make? The best way to find out if you’re making profit is by calculating your net profit margin which is calculated by deducting all expenses (including advertising) from gross profits. Your net profit margin should never be less than 20% of your gross profits which means if your selling price is $100, wholesale price should be $65 or less.
Competition
How competitive is the niche? You want to find a niche that has low competition, but not too little competition. You don’t want to be the only one selling.
Find out what your competitors are doing. Check out your competitors’ listings. This will give you an idea of what they’re doing right and what they’re doing wrong that you can improve on.
Demand
This is one of the most important factors to consider before choosing a product niche. If you choose a product niche that isn’t in high demand, you’ll end up losing money. The best way to find out the demand for a specific product is by searching it on Amazon and checking the number of reviews and sales ranking. A product with over 50 customer reviews and a sales ranking below 1000 has great potential and should do well in your Amazon store. You can also use Jungle Scout to check demands for products.
Length of Sales Cycle
How long does it take for a customer to make a buying decision on your product in that market? It is better if you sell products that are not very expensive and don’t require much thinking before purchase.
Seasonality
Some products sell better during particular months. For example, Christmas lights will sell best around November/December, whereas BBQs will sell best from May to September. Make sure that there are some consistent sales throughout the year so you can achieve year-round profitability.
There are also private label tools that can help you determine how profitable a niche/product might be on Amazon. One of the tools people use is known as Jungle Scout, which gives you an idea of how well different products perform on Amazon in terms of estimated sales, number of reviews and parent ASIN. While these tools aren’t 100% accurate, they give you an idea of what sells well so you can choose your product with confidence.
There are other things you need to consider like the size of your target market and how easy it would be to reach them. You also need to consider your own passion or interest in the products you are going to sell. The most important thing is to make sure you have an existing demand for your products before entering any niche.
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