Many Amazon newcomers face a common conundrum: How can you get started on Amazon without spending a fortune on your first product? Otherwise stated, how can you start selling on a budget?

The lack of a profitable product idea is one of the most common reasons new Amazon sellers are slow to begin an Amazon business. So how do you know what to look for when performing product research for your first Amazon product, and what types of products assume the least financial risks?

Below are several factors to consider that will help make your product research more time-effective and less frustrating when searching for a budget-conscious product.

As always, I champion Helium 10 for its usability and customer service, but any product research software will work.

If you opt for Helium 10, feel free to use my sponsored link here to get 20% off for the first 6 months.

Look for Giftable Items

My late aunt Delma was notorious for horrible gifts: Beanie babies for my 12th birthday, twin Furbies for Christmas, and an oversized Taco Bell Chihuahua turtle neck for my 13th. But despite absolutely hating all these atrocious donations, they remained unused in my closet for years.

So why didn’t I just return them for cash or store credit? Allow me to explain.

We form emotional connections to gifts, meaning we’re less likely to request a refund or exchange them. In my case, I was also worried about offending my aunt, so I kept them out of guilt.

Here are other reasons why they make great Amazon products:

Varied price points create options for any seller’s budget
Gift-giving occasions happen year-round, lessening the worry of seasonal dips or periods of low demand
Gift sales often spike around the holidays, providing sellers with an end-of-year revenue boost

Filter Out Electronics and Digital Devices

Odds are you’re going to come across a goldmine of inexpensive electronic goodies during product research, but I advise against the temptation of investing in a cheap whatchamacallit for your first product. Unless you’ve budgeted for a top-quality device, odds are you’ll hit trouble. Here’s why:

Electronic gadgets sourced from overseas run the risk of malfunctioning, and it doesn’t take but one or two poor Amazon reviews to put your investment in jeopardy. So avoid sourcing products you might find near the chewing gum and batteries in the checkout aisle:

USB chargers
Headphones
Small flashlights
Digital Kitchen thermometers
Small Bluetooth speakers
Portable fans
Laser pointers

Get Creative with Keywords

Creativity stretches far on Amazon, and in my experience, creative and “out there” keyword searches on Helium 10’s Blackbox is a great way of finding fresh product ideas. The more diverse your keyword searches are, the more likely you are to find unsaturated markets or niches.

Use a random word generator, Chat-GPT, or even an old-fashioned dictionary to vary your search results. Follow up on leads with Niche Explorer to dive deeper into longer phrases and keywords.

Beware of Trends and Fads

In an attempt to profit off the 1996 Tickle Me Elmo craze, my dad regretfully bought 15, Giggles the Big Red Monster knock-offs from a Memphis flea market. He planned to re-sell them to neighbor dads who failed to secure their own

Needless to say, both my dad’s wallet and reputation took a beating that year, as selling the knockoffs proved to be a difficult task.

So what’s the moral of the story? Investing in a trend or fad comes with risks. Here are a few possible hazards of investing in a short-lived product-craze.

1. Manufacturers and suppliers often take advantage of product trends by manufacturing subpar and knock-off products. Make sure to do your research when vetting suppliers from Alibaba and elsewhere.

2. Sourcing, shipping, and listing can take several weeks at best. There’s a high possibility the trend will have passed by the time you list your product.

3. Chances are high the market’s already over-saturated, and you’ll be competing at rock-bottom prices.

Price Point Between Above $15

Once you factor in shipping costs, Amazon fees, and other overhead, it’s difficult to hit consistent healthy margins for products listed below $15. On the other hand, products above ~$35 dollars (this is flexible depending on your budget) can skyrocket your startup costs, and you might find yourself competing against sellers with higher budgets and more experience.

Think of it this way; if you’re an inexperienced gambler, it’s best not to ante up at the high-roller’s table; you’ll get eaten alive, right? The same is true when selling on Amazon. Sellers in higher-priced markets are more experienced and better equipped to out-compete rival sellers. Of course, there are exceptions, and these numbers aren’t set in stone, but with higher budgets comes increased competition.

Don’t Compete with High Review Counts

If you’re like me, you have a shameless reliance on reviews.

Deciding on takeout? Check reviews first. Planning a weekend hike? Check reviews. Without a doubt, the reason my wife and I can never agree on a Netflix movie is because we put too much trust in the, you guessed it….reviews.

But on Amazon, reviews are worth their weight in gold, and give customers reasons to trust and purchase your product.

Social proof’s important in any business. Positive reviews give listings much-needed credibility and visibility. Long-term success is difficult without earning consistently high reviews. Once you’ve earned several high-quality reviews, it becomes more difficult for others to compete.

Conversely, don’t try to compete against listings with a high review volume for the same reasons.

Learn As Much As Possible

Selling on Amazon is a labor of love. The platform’s constantly changing guidelines, fees, and restrictions require staying up to date and strategizing around optimal approaches. Deciding on, or verifying a product idea is the first step of many towards a successful sales campaign.

Inventory management
Shipping and logistics
Taxes
Business Bank Accounts
Setting up an LLC
Product Marketing
Ordering samples
Negotiating final prices

Best of luck!

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