April 7, 2020
10 Criterias Of Profitable Ecommerce Products 2020 | [INDEPTH] Ecommerce for beginners

10 Criterias Of Profitable Ecommerce Products 2020 | [INDEPTH] Ecommerce for beginners

If you guys want to succeed in the eCommerce
world today, 80% of your success comes from choosing the right product. And that’s the reason why we’re making this
video today, to share with you the 10 criterias of choosing the right product. Today we’re going to be talking about the
top 10 criterias in choosing the right, the profitable eCommerce product in 2020. So if you’re thinking about building an Amazon
brand, or a brand, or an eCommerce shop, this is the video to watch, so keep watching. Hey, it’s Wilson, serial entrepreneur and
owner of multiple seven-figure business. Make sure you guys subscribe Along the Journey
for more tips, tricks, and strategies on how to build a successful, booming online business. If you have ever struggled with finding the
right product, getting the confidence to choose this product that you have in mind for the
longest time, comment yes in the section below. The most frustrating time is that you get
off from your nine-to-five, you go home, and you’re doing months of research trying to
find that one product that’s going to make you successful, yet you have no clue what
you’re doing and you’re always second-guessing yourself. Today we’re going to dive into the top 10
criterias in finding the right profitable business, the right profitable product. As I said, 80% of the success really comes
from product choosing and which is the reason why we’re doing this video. And once you have chosen the right product,
it’s going to allow you to make sure that moving forward everything becomes so much
easier. And that’s exactly what we’re going to dive
into right now. As a disclaimer, the 10 criterias that I’m
sharing with you is not only applicable to Amazon sellers or Shopify sellers. We are talking about this as the fundamental
principles in finding the product that you can sell anywhere, any platform. Because at the end of the day, Amazon is just
a platform. Shopify is only your personal platform as
well. So we’re talking about the bigger principle
and not just Amazon, just because I’ll be using Amazon to reference a lot of tools I’ll
be using. But without further ado, let’s dive right
in. Number one criteria in choosing the right
product to sell is demand. Never ever choose a product, doesn’t matter
how attractive it is, without demand. Without demand, there’s no point of you making
any supply. So at the end of the day, make sure that you
guys choose a product that has a lot of people wanting this product and that’s how you’re
going to be able to find success. Imagine going fishing in a pond with no fish. Does not matter what kind of bait you use. Does not matter what kind of rod you use. There’s not going to be any fish biting on
it because there isn’t any fishes in that pond. The same analogy when it comes to selling
things online. If there’s no demand for it, it is just like
fishing in a pond with no fish. So make sure you guys go to a pond with tons
of fish. And it doesn’t matter what kind of bait you
put in, doesn’t matter what kind of rod that you put in, you’re going to be able to have
lots of fishes. That’s what we were trying to find, to find
a product and has a lot of denial. So one of the key areas and platforms that
I love using to see the demand of a product is on Amazon. The reason why I choose Amazon is because
everyone shops on Amazon, and thus we can see the demand of a product. Now, within Amazon, how do we find whether
a product has demand or not? We look at the BSR. What is a BSR? BSR stands for best seller ranking. Now, according to Amazon, BSR calculation
is based on Amazon sales and is updated hourly to reflect recent and historical sales of
every item sold on Amazon. This acts as a really great indicator on how
well a product is selling overall, but it also doesn’t always indicate how well an item
is selling in relation to similar items. So BSR ranking, the closest to number one
is actually the better. That means that it’s the most popular items. So if you see a BSR of anywhere from 50,000
to 100,000, that means that those products aren’t really moving. Now, BSR is not the best metric for estimating
sales volume, but it can just give you a general gist, a general idea of potentially how well
the sales are doing. That’s the reason why I love using BSR. So as a general rule of thumb, we want to
choose at least three products that has 10K BSR or below. The reason why we want to be able to do them
is we do not want to choose a product and validate the demand of it just because it
has a bestseller ranking of, let’s say, two or three because a lot of times products can
be skewed by external traffic. And what I mean by that is if a product is
promoted on QVC, television, commercials, and stuff like that, and that prompts people
to purchase it on Amazon, does not equate to demand on Amazon, does not equate the demand
from the public that is wanting this product because they’re wanting this product because
they’re seeing it from QVC, which in turns skews the results. That’s the reason why we need to see at least
three different products within the same niche that has under 10K and BSR as a general rule
of thumb. A software that I highly recommend you guys
to use is Viral Launch. It’s a software that has a ton of tools to
help you find the right product. Now, this tool is created specially for Amazon
sellers. But even if you’re not an Amazon seller, even
if you just want to create your own brand, this is also a very, very powerful tool that
analyzes the sales pattern within Amazon. This is a product discovery tool to find the
right best product. There’s a market intelligent tool to help
you provide insight, and the in-depth Amazon analytics allows you to see historical trends
of monthly sales, monthly revenue, the number of sales, also keyword research and listing
builder, and much, much more. So one thing that … One of the features
that I really like about Viral Launch is the fact that they can allow you to see the number
of searches for the specific keyword. And as you can see here, once you put in an
exact search term, such as dog leash, it needs to populate at least 3,000 exact searches
per month in order to validate that there are that much people searching for this specific
item per month. This is why I love Viral Launch [inaudible
00:06:24]. They have and provide very accurate insights
so then that way we can make the best decisions with the software. If you guys want to check out this software
and see the different versions that they have, checkout in the link below. We have a discount code just for you. The second tip in choosing that right profitable
product that you have is competitors. Now, how competitive is the product that you
want to sell? We can check on Amazon as well. Now, having said that, we want to choose a
product that doesn’t have too much of the big players playing in them. We don’t want to just choose right off the
bat supplements because everyone that is in the supplement game is super, super veteran. They know exactly what they’re doing, and
it’s very, very competitive. So we want to dive into Amazon’s research
to see what type of products that we have in mind that we can start having a foothold. Now, within Amazon itself, we can actually
see this by the amount of reviews that the product has. Anywhere below on average 500 reviews, that
means that you still have a chance to actually establish your brand name, establish the product
that you want to sell. Whether it be applicable to just selling on
Amazon or not, this is also a very, very key metric to look at is that when you type in
dog leash, the top 10, top 20 people, how many reviews that they have. If, for example, they’re all dominated by
people with 2,000 reviews, 10,000 reviews then that means it’s going to be a huge uphill
battle for you if you were to go into this space. That means it’s super, super competitive. Whether you’d be selling on Amazon or your
own website, it is still very, very competitive, which is a reason why, as a rule of thumb,
we want to choose products that have below 500 reviews on average. The third winning criteria is price range. What I mean by price range is you want to
select a product that bypasses people’s thinking behaviors. What I mean by that is if you were to buy
something at $120, you would probably do a lot more research versus something that is
$20, right? That’s the reason why there’s a huge psychology
and barrier for people who are buying stuff online is that anywhere from 15 to $50 is
a very, very good range for you to aim to sell your product at. That’s the reason why for my products and
the things I actually recommend people I would recommend them to choose products that has
a retail value of anywhere from 15 to $50. The reason why we want to go … We don’t
want to go below 15 is that anything below 15 you need to run a lot of volume in order
for you to be super profitable. Because with $5 product, you can’t really
make too much margins with it. And even if you make, what, $2, $3, you need
super high volume for it to make sense for it to be worth your while. Now, anywhere from above $50 people usually
have double takes, triple takes. They do a lot more research before they decide
what product to purchase. That’s the reason why the sweet spot that
we have found is from 15 to $50. That’s the perfect sweet spot that if you
have nice pictures, if you have good reviews, if you have influencers talking about you,
then it becomes a no-brainer for people to just click and buy. If you’re getting any value from this video,
please smash the like button. That’s going to help us with the YouTube algorithm
so then that way I can make more of these videos for you in the future. Now let’s dive right back in. The fourth tip in choosing that perfect product
is brand domination. What I mean by brand domination is we don’t
choose a product that is dominated by this one big brand. What I mean by that is, what do you think
about when you think about toothbrush or toothpaste? Colgate or Crest. These are items that are brand dominated and
it is a huge uphill battle to fight against them, which is a reason why we don’t want
to do them. Now, having said that doesn’t mean that it
hasn’t been done before. It doesn’t mean that it’s not going to work. It just means that it’s a huge uphill battle
that we have to fight. That means that we need to educate people. That means that we need to have our own loyal
base of customers. We need to have the economy of scale in order
to beat them. Yet, these companies and corporations have
millions of dollars to just spent on marketing alone, so it becomes a very, very tough uphill
battle for you to fight if you were to create a product, or manufacturer, or white label
a product to sell online. You’re fighting against a really, really big
uphill battle if you choose brand-dominated items. Now, how do we find and verify whether these
products are brand dominated or not? Now, you go on Amazon. As you go on Amazon once again with Viral
Launch, you can actually see what types of brands are selling these products. For example, if we’re thinking about dog leash,
you see, as you can see here, there’s no big companies that are dominating this listing,
right? That’s means that with the dog leash it passes
this brand domination rule of thumb. But if you were to search, let’s say, baby
cream, and as you can see, all these big brands dominate all the listings, which is the reason
why it becomes very, very difficult for you to go and dominate in this market and to actually
make yourself win and stand out from all these different competitors. Now, as another general rule of thumb, if
you do not want to use Viral Launch or these tools, you just need to be able to think and
ask yourself, “Does any big brands pop up when you are proposing the product that you
want to sell?” For example, once again, if you think about
toothpaste, what comes to mind? If you’re thinking about, for example, razors,
what do you think about? And if nothing comes to mind, then that means,
first of all, it pass your own test. Then, second of all, you can go on Viral Launch. You can see exactly what other people are
searching and what are some of the different competitors out there to verify whether it
has been brand dominated or not. Tip number five in choosing the right product,
the most profitable product for your success, is seasonality. Avoid items that sell seasonal only. And why do you want to do that? It is because if you’re going to spend the
time, energy, resources in building a brand, building a business, why do you want it to
only operate throughout only specific seasons? For example, seasons such as Christmas items. You don’t want to do them because you’re going
to need to spend the same amount of time and effort, and doing your bookkeeping, and doing
your resources, and doing influencer outreach, and all these crazy things that you need to
do to start a business. It’s already all done. But you’re only limiting yourself in selling
during the Christmas season, and that itself becomes a really big no-no because throughout
the rest of the year you’re really doing not much. And when we’re in the business, we want to
be able to maximize the return that we have when we’re investing into our time, and energy,
and everything into this. Because, once again, we want to make and build
a thriving business. As a general rule of thumb, what I love using
is Google Trends. Google Trends allows you to see the different
spikes that are happening within the different search terms on Google. And as you can see, these are the seasonal
spikes that what I’m referring to, which we want to avoid. Why would we want to avoid the seasonal spikes? It’s because during the peak season, yes,
there’s a lot of demand for it, but during the off seasons there’s no demand and that
means that you’re not going to be able to make any profits whatsoever. Something that we also want to avoid are the
random spikes. Spikes are no good. Spikes indicate that these are just trends,
these are only fads, and it’s not going to last. And building a business based on a fad has
no sustainability, and that’s not the game that we’re teaching. That’s not the game that we are promoting. That’s the reason why this is part of the
no-go rule. What we like seeing are Google Trends that
have this steady curve that trends upwards. That means that the demand for items like
this are steadily growing. That means that for you to invest your time,
and energy, and resource in building a brand like this would reap you tons of rewards in
the future because they have more and more demand of people searching and buying this
product. Number six tip in choosing that right profitable
business idea and product is to choose items that are light, lightweight, and also small,
or relatively smaller in general. Why do we want to do that? It is because we want to minimize the shipping
costs. Shipping is very, very expensive. Whether you be shipping through your own resources,
for example, like 3PL, third-party logistic companies or selling it and shipping it through
Amazon, FBA, fulfilled by Amazon. Either way, they’re going to charge you a
ton on shipping fees. So if you’re not careful with selecting items
that are smaller and also choosing items that are lighter in weight, it’s going to cut right
into your margins. For example, if you’re wanting to sell a whiteboard
like this, you’ve done your research, you’ve done all the criteria check, you’ve validated
that it has high demand, and that it’s not seasonal, and you really, really want to sell
this product, but if this product costs you like a hundred bucks to ship, it’s going to
cut right into your margins, which is the reason why we don’t want to sell something
that’s going to be super heavy and super bulky because shipping is going to be a pain. It’s going to be an arm and leg. And that’s the reason why we want to choose
something that’s small and lightweight. Now, having said that, there is a caveat to
this, that there’s a balance between experience and branding versus practicality and shipping. That’s something that it’s always a constant
pull and constant tug, whether you want to value someone’s experience in opening a product
that is super high-scale. Give you an example. A brand that we’re building is called Made
in Nine. It is a skincare product. Right now we’re discussing whether to go with
a plastic bottle or a glass bottle. For us, we’re deciding to choose to go with
a glass bottle, very aware of the fact that we’re going to be paying double if not triple
the amount of shipping costs. Now, why are we choosing that? It is because we value our customer’s experience
over our margins. Now, I’m not telling you to always choose
glass bottle. I’m telling you this because all these rule
of thumbs is just there to show you, there to give you insight on what would be the most
ideal case. Having said that, experience in my, I guess,
in my criteria is way more important than profitability because we want to be able to
take care of our customers. If you guys want to check more about our journey
in building this brand, check out the vlog that we have here. It’s a series that we talk about how we’re
building our eCommerce brand. The seventh tip in finding the right product
is sales depth. What is sales depth? Sales depth goes along line the principle
of brand domination sales. That means that how much of the pie is distributed
amongst the sellers. How are the top 10 sellers doing within a
keyword? So for example, if within the top 10 sellers,
all the sales are skewed towards the top three people who are selling, that means that it
doesn’t have that sales depth that we’re talking about. Whereas if the pie is spread evenly amongst
the people amongst the top 10, you can see that everyone is making money, that means
that this item, this keyword that you’re choosing has a lot of sales depth. That means that you can potentially be one
of these people who are making money as well. Imagine yourself in the shoe of a product
that has no sales depth, that has only dominated by three different companies. For example, if you’re in the industry of
selling toothpaste, it’s going to be dominated by Colgate. It’s going to be dominated by Crest. And you don’t want to be in a position where
you’re fighting with them for sales because, once again, it’s just an uphill battle. Same theory with brand domination is that
you need to build a check how much people and what are the sales depth of the keyword
of the product that you’re actually choosing. To ensure that you choose a product that has
really good sales depth, I recommend something along the lines of at least five different
sellers which has more than $10,000 in sales. And as you can see and from Viral Launch,
you can actually check how much revenue that they make per month, and in turn allows you
to see the sales depth of the item that you have in mind. The eighth tip in finding that right profitable
product is to avoid electronics. Why do we want to avoid electronics? It is because it’s a pain to deal with. When you’re just starting off to build your
own brand and your own business, you want to avoid as much friction as possible. And electronics is a nightmare to deal with
because there’s just so many different components that can go wrong. Even if you do your due diligence, even if
you have really amazing quality assurances, it still can go wrong when you’re shipping,
when you’re manufacturing it, when you’re packaging it. So many things can go wrong. A circuit may blow, whatever the case may
be. Which in turn increases the dissatisfactory
for your customers. And in turn, for example, if you’re only selling
on Amazon, then you’re going to have a lot of refund rates. And when you have a lot of refund rates, it
hurts your listing and it hurts the ability for your listing to show up for your customers. But on the other hand, if you’re not just
banking on Amazon, you’re selling on your own website, same thing. You’re going to create a lot of trouble and
a lot of customer service just to fulfill this electronics. And if you’re starting this business as your
first business, it becomes a lot of headache that you can avoid if you just completely
avoid dealing with anything electronics. The ninth tip to find that profitable idea
of yours is the variation tests. What does the variation test mean? It means that some product require you to
have multiple colors, multiple sizes, and multiple stylings, and you to avoid these
products. Why do we want to avoid items that require
multiple variations? It is because of the investment and the risk
associated with it. Well, what do you mean by risk, and what do
you mean by variation? What do you mean by all of this? It is because if you’re doing ordering with
manufacturers, usually by every single SKUs, if it’s a medium, there’s a minimum order
of quantity. And what does that mean? That means that for every different sizing,
you need to order at least 2,000 of this unit. So for example, just imagine that you need
to order small, medium, and large for a sweater. You need to have at least 6,000 SKUs because
each SKU has a minimum order quantity of 2,000. 2,000 for large, 2,000 medium, and 2,000 smalls. And that itself runs up the amount of investment
that you need to make. You need to invest in 6,000 sweaters in order
for you to start your business to test it out, to test out whether it has enough demand
for it. That’s the reason why I would always, always
avoid items that require many variations. So now let’s hop onto Amazon Seller Central. They do an amazing job explaining the three
types of variation. First of all, the single variation are products
that vary in one configuration and only buyers can make purchasing decision based on the
differences between these configurations, something such as color. Double variation are products that vary in
two configurations. We’re talking about color and size. And third are no variations, product that
exists in only one configuration only. This is what I mean by choosing the least
… The road to least resistance is choosing things that don’t require you to have any
configurations whatsoever. That’s the reason why we want to avoid items
that have different variations out there. Look at your competitors and see if they offer
variations. And if they’re offering variations, that means
if you want to compete head to head with them, you need to invest a lot more. You need to invest in different colors and
different sizes, and in turn it runs up your MOQ, and in turn it runs up the amount that
you need to invest just to go head to head with the people that are selling the same
product. So that’s the reason why you would always,
always want to, when you’re starting off, to avoid items that have variations. Point number 10, final tip is to ensure that
you have profits, okay? Profits after you’ve spent all the time in
creating your brand, all the time in sourcing the inventory, and all the time marketing
and selling this product, which in turn you need to be able to calculate how much you
can make. Now, how do we do that? We’re going to dive right into Viral Launch. So if we take the YETI Rambler and plug it
in, we’ll see that they’re selling this Rambler for $30, okay? YETI would profit 13.24 per unit, and specifically
4.50 goes to referral fee, 4.75 goes to Amazon fee, and that’s the reason why you’re left
with 13.24. Below that you’ll see you’ve calculated the
upfront costs, the monthly expenses, the monthly profit, and the total profit. You might be actually wondering how they got
these numbers. So if you click on the advanced settings,
you’ll see a new window that pops up with a bunch of different options. All these affects the number you just see. So if you want to tweak it, if you want to
adjust it, if you think it doesn’t make sense, you can always do your own customization. Currently, the profitability and initial costs
are based on an initial order of 500 and a hundred sales per month. So you’ll see a bunch of other things that
it would affect your monthly profits, like sourcing fees, software, discount, shipping,
and all these different goodies. All these are things just to give you an insight
on the possibility and variation of your potential costs. Now, I’m giving you this and I’m showing you
this not to say that this is once and for all, but it just gives you an idea of the
different costs that might be associated with selling a product, with selling on Amazon,
or selling on your website. So if you’re just thinking about creating
a brand and selling it on your own website, you can actually use this tool to help you
forecast. You can adjust these tools, take out the FBA
fees, and input your own 3PL costs in there as well. Once again, this is not only for you to sell
on Amazon, it is to sell on eCommerce in general. Now, as a rule of thumb, for me to actually
spend all my time and working and to making sure that we’re doing everything that we can
to optimize, we want to aim for profit margins of at least 35%, and this is a very conservative
number. If you follow the last 10 rules that I’ve
just shared with you, most likely you’re going to find an amazing product idea. You’re going to find a product idea that would
minimize your risk and in turn maximize your chances of finding that winning product that’s
going to make you tons of money, that allows you to build an amazing brand out there, that
allows you to quit your nine-to-five and bring your family on vacation. And for your convenience, I’ve put together
this 10 rule checklist for you to find this product idea and to make sure that we can
actually support you throughout this journey. It is in this description below, so check
it out. Download it. Use it to your advantage. Once again, check that out. Also, with Viral Launch, we have a discount
code. Check it out in the link below. This all allows you to actually do your competitive
analysis to see anything in demand. And it is an amazing tool that is, I would
say, paramount to the success of your product discovery journey. For more videos on how to build a thriving
and memorable business, building a brand that you can sell in the future, make sure you
guys follow and subscribe Along the Journey. I really, really hope you enjoyed this video. Make sure you guys smash the like button. Subscribe Along the Journey. And I will see you guys in the next video.

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