How to Find Winning Products With a High Profit Margin
E-commerce marketplace is one of the fastest-growing digital entities in the world.
In the US alone, e-commerce sales are expected to cross $374 billion, and global e-commerce sales are set to cross $4.2 trillion by the end of this year.
And it’s far from the saturation point of e-commerce, and the market and sales are set to grow for years and even decades more.
One misconception about the e-commerce market and profitability is that with giants like Amazon, eBay, Walmart, and Target, it’s highly improbable, if not impossible for individuals or small businesses to carve a place for themselves in online retail and e-commerce marketplace.
The fact is, almost half of all Amazons products are sold by third-party sellers, which you can become by hunting/developing the right product to sell, and that’s what we will try and help you with, in this article.
You see, the simplest law of profitability in business (buy low, sell high), doesn’t work very well in e-commerce.
That’s because market giants like Walmart and Target, with billions in assets (including hundreds of brick and mortar stores), and revenues, have already established a monopoly in this area.
You do not want to compete with these giants.
Thankfully, the solution is straightforward.
You need to learn how to find winning products with a high profit margin.
It might be a niche product, something that hasn’t been marketed the right way (or to the right people), or an up-and-coming product that not many sellers know about (but has a market).
And while the solution may be straightforward, it’s not easy.
Hundreds of sellers spend hundreds of hours trying to find the perfect product, only to get frustrated and leave when it doesn’t sell-off the way they hoped it would.
That’s usually because of a few simple reasons: They didn’t look for the right product; they ignored certain important parameters, they simply didn’t use the right tools, etc.
There is no one perfect formula and methodology that answers the question: how to find winning products with a high profit margin?
But there are certain practices and tools that can help you achieve this goal.
Tools and Tips To Find The Winning Products
There are various methods you can use to find the winning products.
Some sellers prefer to organically study the market, look for winning keywords, read reviews, and try and gauge the perception of buyers about similar products.
Other sellers prefer to stick with metrics and focus only on products that fall in the sweet spot of those metrics.
Some tips for both types of sellers are:
1. Look for products that have a high demand and low competition.
Since most high-demand products are already available in abundance, and if they aren’t, there must be a practical reason behind it (high shipping cost, bulky item, few manufacturers, etc.).
Instead, you should look for products that are growing in demand, and there aren’t many sellers who are able to fulfill the demand gap.
Competition is inevitable, but if you are growing along with the product’s demand, you might be able to stay ahead of the competition.
2. One way to gauge demand is a keyword search.
You can search for recently trending products and variations of the common keywords associated with them, or you can research demand organically (like listening to and reading about things people are looking for that they can’t find), and do your keyword research with those queries in mind.
The keyword search volume will inform you how many people are curious about a product, and periodically researching that keyword can show you whether the demand is growing, reducing, or has become stagnant.
3. A good idea is to decide upon some product viability metrics and some basic product parameters.
Size, weight, price, profit (per unit and margin), and return on investment are important parameters that you can look into.
Size and weight determine the shipping cost.
A cheap but bulky item won’t be profitable, simply because its shipping will eat into the profits.
Also, the price shouldn’t be too high or too low.
One famous seller placed the ideal price range between $20 and $70 (another placed between $25 and $50).
The more expensive a product is, the costlier it would be to take it off the ground.
ROI can be a bit low in the beginning if you are just entering the market.
4. You should also consider the seasonality of the product.
Unless that’s what you are specifically going for, look for something that sells all year.
When you are looking at product trends and have shortlisted a few products to choose from, keep watching them continuously.
The patterns you see will help you decide whether it’s a viable product to pursue or not.
5. Don’t look for products that have too many reviews.
Reviews fewer than 100 or 200 are good for you.
And make sure you can improve the product, or at least market it better than your competitors.
But be warned, marketing tactics are easier to copy, but if you manage to recreate/modify the product to be superior in quality, you will benefit from an organic edge.
There are some other tips and methods as well, but these are enough to get you started on the right track.
Now let’s take a look at some of the tools that can help you learn how to find winning products with a high profit margin:
Jungle Scout: It’s arguably the best Amazon product hunting tool available (for $39 a month).
It allows you to filter the Amazon database and track competitors.
It’s thorough, resourceful, and a perfect tool to find and cultivate amazing product selling opportunities in niche markets.
Ecomhunt: Ecomhunt is an amazing drop-shipping tool that’s great for beginners.
It’s equally helpful if you are hunting products as an Amazon merchant, or for your own e-commerce store.
It heavily leverages Facebook ads for data collection and provides helpful insights on product engagement.
Viral Launch: A good way to track what new products are being launched is to join a website like Viral launch.
But it’s not just that.
It’s a comprehensive tool that allows you to keep track of over 225 million products, new launches, keyword research and tracking, and competitor tracking.
Pricing starts at $50 per month.
Sell The Trend: Sell the trend sells itself is a 9-in-1 drop-shipping tool that can help you track hidden gems of Amazon products and track real product ranking trends.
It has separate trends exploring tools for retail and Amazon, and its pricing starts at $32.97 per month (billed annually).
Intelligynce: It comes with Ali Inspector 2, and has a variety of features to help you hunt profitable products.
Each product’s information on Intelligynce has been broken down into 33 variables.
It’s a lot of information that can help you shortlist your ideal product.
It’s available for $39 per month or $99 for a lifetime.
Other tools that can help you find winning products are Wish Inspector, Thieve.co, Ali Shark, Shop Genius.
Some of these tools might seem expensive if you are an up-and-coming merchant.
But if you look at them as investments, the cost won’t matter much because by choosing the right tool, you will not only increase your learning of how to find winning products with a high profit margin, you will also save a lot of time.
And once your product sales gain traction, these tools will pay for themselves.
