As you research potential manufacturing partners for your private label business, you can access public import records to see from where your competitors are sourcing their products. Think of this as a shortcut to identifying overseas manufacturing capabilities similar to what you need.
Just because your competitors are using specific overseas manufacturers doesn’t mean you will be able to get cooperation from the manufacturers to make your products. Keep in mind; these manufacturers may not be able to accommodate your custom design needs. It is a good place to start, however, without having to make a whirlwind trip overseas to identify suitable manufacturers.
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Realistically, you should install these free tools immediately upon becoming an Amazon seller. By being able to determine listing activity across other sellers on listings you currently have or are considering adding to your catalog, you can gauge likely types of pricing competition you will face. You will also be able to understand whether the product has been sold by Amazon itself.
Remember, it’s critical to look at historical pricing information so you aren’t getting a static and potentially misleading picture of competition. For example, you may see the product you’re aspiring to sell has very little competition only to discover a week later that Amazon itself is selling this product. It was only temporarily out of stock, at which point you will be back to competing head-to-head with Amazon. This is something that may cause you to rethink whether you want to sell that item.
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If part of your sourcing model includes retail arbitrage, you can save yourself a lot of time by having one of these tools accessible when you walk the aisles of your retail sources. By scanning barcodes to produce instantaneous Amazon product and profitability information, you can quickly establish whether an item makes sense to buy for resale on Amazon.
Most of these tools look only at Amazon fees and your cost of goods sold. You should factor in any indirect and overhead costs into your decision on whether to buy any of these items for resale. In doing so, you may find that some of the estimated profitable items you’ve scanned aren’t profitable and that your time wandering the aisles inspecting product isn’t, in fact, free. There is real opportunity cost to your time.
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When you go looking for new products to add to your Amazon catalog, you may find yourself scouring through supplier catalogs or staring at spec sheets. Just how are you making your decisions about what to add?
Are you able to screen hundreds and thousands of prospective products on criteria like Amazon customer demand, Amazon seller competition, the presence of Amazon Retail as one of the competing sellers, margin opportunity, and so on? Without some automated tools, you likely aren’t able to do a deep-dive on most prospective products.
Fortunately, these product research tools can help accelerate this evaluation process significantly, allowing you to become more efficient and data-driven in your sourcing decisions.
While the line between inventory scouter software and product research software is closing every day, I typically see more types of data in the product research software. But, you have to figure out how to incorporate these additional data points into your decision on whether to source specific items.
Also, keep in mind that product attractiveness can change very quickly by the introduction of a just one lower-cost competitor, so make a habit of revisiting this information on a regular basis.
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James Thomson is Partner of Buy Box Experts, a managed account services firm enabling brands to sell direct on Amazon. He is also president of PROSPER Show, the largest US-based continuing education conference for Amazon sellers. Previously, James was the head of Amazon Services (which recruits >99.5% of all new sellers to the Amazon marketplace each year), Amazon's first FBA account manager, a banker and a management consultant. He earned a Ph.D. in Marketing (B2B Pricing and Distribution) from the Kellogg School at Northwestern University.