Greg Mercer, the founder of Jungle Scout, which is one of the best Amazon research tools, shares with us some great insights about how you can double your profits.
Here is what I love about Amazon as a primary sales channel: it is a meritocratic marketplace. What I mean is, the barrier to entry is low, and the fundamentals to succeeding are fairly straightforward: do thorough product research, source a great product, and optimize the listing to maximize your chance of getting the product in front of those who need it. Super easy, right?
Well, it is and it isn’t. The word is out that Amazon as a sales channel represents one of our decade’s greatest online opportunities in a long time. And of course now there are more people competing for a given private label product, buy box, or keyword ranking. I have seen competition intensifying over the past few years, but the opportunity, if approached with the right mindset, is still as ripe as ever.
One of the key advantages that I have used to my benefit in selling at a $400k per month clip is the speed to market. Improving my ability to do product research faster, and with greater insight, was the genesis for me building Jungle Scout, now the industry-leading Amazon product research tool.
Of course I may be biased, but I am proud to note that no one comes close to matching our 2 million plus points of Amazon sales data that we collect every month. Furthermore, Jungle Scout has been collecting this level of data for the longest amount of time, so we have the ability to extract macro trends and therefore fine-tune our sales estimates to be the most accurate that you will find. And what does that mean for you?
With Jungle Scout’s integration into 888Lots, it means that you can get the most accurate sales estimates for the liquidating items you are considering. However, you will be hard-pressed to find someone that loves Amazon data as much as I do, so of course there is much more than sales estimates data that I needed.
Below are three Jungle Scout features that will help you determine the profit potential from any given item on 888Lots.
1. Net Margin:
There is no more important figure at the end of the day than net margin, right? One of the tricky things with Amazon, especially for newer sellers, is the various Amazon fees that may be applied without you fully realizing it. When a marketplace can be as competitive as Amazon, especially for products purchased on 888Lots where you will not necessarily own the Buy Box, you need to know your target profit. That is why we have the FBA Profit Calculator. With this tool, you will get the actual FBA fees, and if you also enter the product cost (which you will get from the 888Lots listing), you will get a precise figure of what your profit will be.
I believe this tool is invaluable for any informed seller, and especially for those who do not outright own the Buy Box (as private label sellers do). Here is a look at what Jungle Scout’s FBA Profit Calculator offers:
As price is such an important factor in securing the Buy Box, I find that having the ability to play with various pricing and cost structures is crucial in helping determine whether to sell a product.
2. Competitive Analysis:
I recently launched a private label product myself. Though I have more than 40 SKU’s currently selling on Amazon, I wanted to share the exact process to others to show how viable Amazon is as a sales channel. I decided to sell bamboo marshmallow roasting sticks you can learn more about my case study here: http://junglescout.com/collaborative-launch. Certainly a unique product, but one that I knew would succeed out of the gates, despite being out of season. How did I know it would sell gangbusters? My competitive analysis indicated minimal competition for the demand!
Here is the short-hand for how I assess the existing competition for a product and/or keyword. Would I be able to break into the Top 5 or Top 10 organic results for the keyword if I had around 50 reviews? Is the Buy Box Seller a majority FBA, Amazon, or Merchant? Here is what the results today look like for “marshmallow sticks”, one of the main keywords we are targeting:
The barrier to entry is relatively low for people to start selling on Amazon. Consequently, you are going to start seeing more competition from the fringes, and you want to know as much as you can about that competition. Jungle Scout is the perfect tool to help with your competitive analysis, so you can aggregate some important metrics, like the number of reviews and the types of sellers, before you invest thousands of dollars in buying inventory.
For any product that you are considering, I recommend pulling up Jungle Scout data for several of the main keywords. Are the top 10-15 organic results filled with listings that have hundreds of reviews? Do you foresee challenges appearing in the first few pages of organic results? Will you tie up your capital with inventory that is not moving due to significant competition? These are all questions that a five minute competitive analysis with Jungle Scout will answer.
3. Macro Analysis
I love the concept of 888Lots, and I think there is tremendous opportunity for each Lot. When purchasing something at 80% off MSRP or more, isn’t it almost like buying a dollar in order to receive a $5? Why would you ever stop that deal!? Well, there are some ways to play those cards in your favor even more, and Jungle Scout can make that happen.
There are most certainly seasonal fluctuations and predictable trends that you will see while selling on Amazon, and with one click in Jungle Scout, you can see what those (Google) Trends are. For example, below are the saw-tooth spikes of “pool floats”, with the surges in interest peaking during the summer months:
I generally don’t love highly seasonal products like this for private label products, though if you are buying a highly specified batch of categorized products, you can use the trends to your advantage. For example, you can expect many Lawn & Garden products will sell much better in 2nd and 3rd quarter, while Toys see a surge in 4Q. This will differ by product and category, but as you can get the general information in the 888Lots listing, and cross-reference the Macro trend in Jungle Scout, you can time your inventory purchases and cash flow accordingly.
So there you have three business concepts that I believe will help you double your profits when you use Jungle Scout in tandem with 888Lots product research. Amazon is a dynamic and fast-paced sales environment that is a gold mine for proactive and discerning sellers. I have touched on only a few of the elements that helps thousands of Jungle Scout users 10x their product research and consistently sell six figures per month, I highly encourage you to take a deeper dive in to find your next Lot of profit.
Jungle Scout also offers a free 7 day trial for the Web App, which is the easiest way to uncover profitable product opportunities in a matter of seconds, and get the actual Amazon data to support your Amazon product research. Best of luck in your Amazon pursuits!
