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Five Things You Need To Research Before You Start Your Amazon Business
August 29,2018
Every successful journey, started with a simple research. The journey can be about your academics, food, health, fitness, travel, or business. 

We need to do our research before venturing out to the unknown. 

Why? It’s because of self-preservation. It is in our nature to have the sense of security even though we know it’s risky.

How’s that even possible to be secured when it’s risky? Well, before you know it’s risky, you already did your research. You’ve read somewhere what are the pros and cons. 

You know the success rate when you do this. And, you know what you will lose when you fail. With these knowledge, you are secured with yourself that this risk is worth taking, especially with the prize that’s waiting for you at the end.

With Amazon business, there’s also risk but more gain, especially when you do your researches right. You already know how much you will risk or invest when you start your Amazon business. We listed below the five things you need to research before you start your Amazon business. 

This list will save you time and lessen your probability of making a huge mistake.
#1 Product Research
The first thing you have to do when starting your Amazon business is to identify the product you are going to sell. 

It is important that your first product has good demand, low competition, and low supply on Amazon already. 

It must be simple and not reliant on heavy instructions to have good quality. (Remember that having a good quality product is the most important factor to prevent bad reviews from buyers.)

The product must be small and light, preferably around 400g, so that you will not pay a huge transportation cost and you can ship it by air.

The item will arrive to Amazon warehouse in 7 days. If you ship it by sea, it will take several months before it arrives there.

It is highly recommended that the price range is between $10 to $40 because customers are tend to be more impulsive buyers with this amount. 

Since this is our target range, we have to identify the product that is cheap to manufacture, preferably $1 to $3 per unit, so that we can order 50 to 300 units. 

This way, your investment and shipping cost will be low.

You can find your first product by going through the list of Amazon Best Sellers, Amazon New Releases, and Amazon Search. 

To evaluate the demand of a product, download the DS Amazon Quick View app. This is where you can view the Best Seller Rank (BSR) of each product, which is updated every hour by Amazon.
Here’s a step-by-step process on how you can identify a product opportunity:
  •  Go to Amazon New Releases.
  •  Go down to the third or fourth category
  •  Find a simple, light, and small product that has a price range of $10 - $40, has a BSR of 20,000 maximum, and has a review maximum of 100 only.
When you have found your product, identify your potential competitors and evaluate their listing; identify the keywords where the product is most popular; and, analyze if you can make better main image than your competitors. 

Then, rate your competition according to the following levels so that you’ll know how low the competition is:
  •  Level 1: 1-3 images, 0-20 reviews, short bullets, short description, no video
  •  Level 2: 7 images, 20-100 reviews, short bullets, short description, no video
  •  Level 3: 7 images, 100 - 300 reviews, longer bullets, moderate text description, no video
  •  Level 4: 7 images, 300 - 500 reviews, long bullets, moderate text description, no video
  •  Level 5: 7 images, 500< reviews, strong long bullets, pictures in Product description, video on the listing
Tip: the lack of images is the best indicator of low competition.
There are few tools that you can use for product research: Unicorn Smasher or Jungle Scout. You can also use this Product Research Sheet for your product opportunity.
#2 Patent Research
After identifying the product you want to sell, you have to know if your brand or product has existing trademark by doing patent research. 

Amazon takes intellectual property very seriously. 

The challenged is that, it’s impossible to be 100% certain that it’s not already patented since it usually come and go, and they are market-specific (e.g.US, Canada, Europe, and China). 

However, it must not discourage you to continue your progress. To minimize risk, order minimal inventory at first. You can start with your first 100 units and Amazon will accept that.
You can start your patent research in different marketplace below:
  •  US: https://www.uspto.gov/
  •  UK: https://www.gov.uk/search-for-patent
  •  Canada: http://www.ic.gc.ca/opic-cipo/cpd/eng/search/number.html
Tip: When there are a lot of sellers selling exactly the same product, it’s an indication that it’s not yet patented.
#3 Profitability Research
When doing the profitability research, you need to ask potential suppliers of your product for the manufacturing cost, minimum order quantity, how long does it take for them to finish the inventory, and shipping cost to US. 

You can find these potential supplier in www.alibaba.com, tick the “Golden Supplier” and “Trade Assurance” box because these are trustworthy.
Use the Product Research Sheet under the Key Information Tab to input the details that you gathered. 

From there, you can calculate the total investment cost, net profit, and gross profit when you start selling on Amazon.
#4 Product Market Research / Perfect Product Blueprint
In this research, we will collect the information about the product idea we want to sell. 

Read and study the competitor’s reviews to understand the needs of our potential customers. 

The customer’s reviews will give us valuable information, such as possible quality, usability and safety issues, which we need to avoid when we are sourcing our product from China, evaluating samples, or creating listing and the content. 

Eliminating these issues will make our product the superior one in the market.
Use this Product Blueprint Template to guide you while making your product market research.
#5 Listing & Shipping
Create your listing using UPC code and make a dummy shipping plan in your Amazon Seller Central so that you’ll know if Amazon will allow you to sell your product. 

Amazon may require certification/s for your product that you have to ask from your supplier before allowing you to sell your product.
Later, when you confirm that you will continue with the product, you will print out the shipping label, and send it to your manufacturer.
It is important to do this before paying your supplier in full. 

Once you have paid them in full, if Amazon asked for additional, i.e. certification, and you didn’t get one from your supplier, then they are no longer obligated to give you the said certification.
Bonus: Plan of Action
We need to create a plan of action with all the information we have collected because our intention is to release better product that is currently on the market. 

In the Product Blueprint Template, there are questions about product complaints, including quality, usability, instruction, and other issues. 

With that information, we will create a plan of action for our sourcing by making a list that you need to discuss and negotiate with your supplier if they can prevent the issues on your list, including its additional cost. 

Through this, you will learn and understand if that product idea is a good one or not. 

Otherwise, look for another product that’s very profitable and will allow you to dominate the market.
By Roxie
August 29, 2018
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