Today I’m starting a new blog post series where I go through Amazon UK FBA product research examples using Jungle Scout. My goal with this series is to show you exactly how to read the numbers and make informed decisions based on the information provided by the Jungle Scout Extension. Product research is the most time consuming and complex job any Amazon seller faces, so I really hope these posts help newbie sellers better understand how to do proper and thorough product research.
In this first post, we’ll take a close look at one specific product, but I hope to do these posts regularly in the future to cover various products in different niches with different competition levels and market sizes.
Another important thing: when I start work on these posts, I have no clue whether the product has potential or not. Just like you, I will only find out at the end of the post when I give you my verdict on whether this product is good or bad, along with the reasoning behind my conclusion.
If I find a good product, it’s up to you to take action on it (or not). Personally, I wouldn’t recommend you get into any of the products I cover in these posts as hundreds or thousands of people will read them and get the very same information. Chances are, when I do discover something good, dozens of people will quickly jump on the opportunity and start selling that product.
I’m NOT giving you good products on a plate here. These posts are intended for educational purposes, so you can learn and better understand how proper Amazon UK FBA product research should be done using Jungle Scout.
IMPORTANT! Even though I put a lot of time and energy into creating these posts, please note that they aren’t 100% accurate and in-depth research. Usually, when I search for products for myself, I spend two, three or even four weeks doing thorough, in-depth research. I can’t really afford to spend that much time on one post, but the principles I cover today will be fully applicable and this information will hopefully still be helpful to many of you.
The product we’ll cover today is Empty Tea Bags. These are empty bags that people use to create their own custom tea bags using loose tea or other ingredients. It’s a cheap, simple and small product—something many newbie Amazon sellers would definitely consider.
How did I find this product idea? Just like many other products, this idea came from my own personal need/experience. I was looking for organic decaf tea in unbleached bags, but I couldn’t find any at the time. So, my idea was to buy organic decaf tea in bulk and pack them into bags that I would buy separately.
Since then, I found a good organic decaf tea so I don’t actually need these empty bags anymore. Still, this product idea stuck in my mind, so I thought it would be a perfect example for my first product research post.
Ok, enough of the intro stuff, let’s get straight to the point! We have our product idea. Now, the product research process starts with gathering relevant supply and demand information—aka sales and competition data. As explained in my Jungle Scout post, the quickest way to do this is to use Jungle Scout’s EXTENSION. Let’s get started!
First, let’s go over to Amazon.co.uk, search for the product and launch the Jungle Scout Extension. In this post, I will be researching the UK marketplace. Just so you know, if you are researching products on Amazon.com (the US marketplace), you shouldn’t really use this post for guidance.
In the US, the numbers will be totally different. Be aware that what looks good in the UK (in terms of the Jungle Scout data) may not be a good product in the US and vice versa. As most of my blog readers are UK-based or are selling on Amazon UK, I will focus on this region for this and future posts.
In some cases, you might not be sure which keyword phrase/search term to use to best describe the product, so here’s what I recommend you do:
- Start by typing in the product name into the search bar. Amazon will provide you with a list of popular searches, and this is usually where you will find the most appropriate search term to use;
- Check the top 10 listings to find the most common phrase/keyword string that all of them use. Most of these sellers will have done thorough keyword research, so this strategy allows you to quickly find the best keyword/search phrase to use.
With my empty tea bag example, it’s pretty straightforward. The product is “empty tea bags” and that’s exactly what I should search for. However, as you can see, when I type in “empty tea bags”, Amazon also suggests other keyword phrases, like:
These are the actual keywords that people are using on Amazon to find this product and its variations. We can get even more related keywords by searching for the same phrase using the Keyword Scout tool! Currently, it only supports the US marketplace, but most of the products will be similar and it’s a great way to find even more variations and sub-niches. As you can see, besides “empty tea bags”, I also get search phrases like:
All of these searches are basically covering the same “empty tea bag” niche, and we can already see that some of the most popular sub-niches or product variations are:
- Unbleached tea bags
- Nylon tea bags
- Organic tea bags
- Paper tea bags
Write down these sub-niche product ideas as they will come in very handy when we start doing manual research—if the product shows good potential! For now, though, I will stick with the MAIN/GENERAL keyword phrase for this product, “empty tea bags”, which is the most searched term.
As you can see, on Amazon.com, there are 1658 EXACT match searches per month for this phrase and 2888 BROAD match searches. All the other variations and sub-niches have lower search numbers, and this is how I know that the main/general keyword for this product is “empty tea bags”.
Now, once that is sorted out, we can start digging through the actual information, numbers and data provided by the Jungle Scout Extension.
The built-in Opportunity Score shows:
- Medium Demand
- Low Competition
Now, personally, I don’t pay too much attention to this score as I don’t find it very reliable. The only time I will pay attention to it is when it says that the competition is HIGH. In that case, I know that 99% of the time, the competition is indeed EXTREMELY high and there is no point in continuing with the research process.
Or is there?
You might encounter a situation where the competition for your main search phrase is coming back as HIGH, but when you search one of the variations or sub-niches, the results change. So, for example, if the Opportunity Score is HIGH for “empty tea bags”, I would try some of the other search terms to see how the score changes. Remember, these are the additional product variations we got from Amazon’s suggestions and the Jungle Scout Keyword Scout, like:
- Unbleached tea bags
- Nylon tea bags
- Organic tea bags
- Paper tea bags
It could be that the general “empty tea bags” niche is oversaturated, but there are only 5 or 10 listings selling ORGANIC tea bags. If the demand and sales are there, you could turn a failing product idea into a successful one by simply niching down.
So, if you ask me, don’t instantly eliminate a product idea just because the Opportunity Score shows high or medium competition. Try searching the other product variations to see if it changes.
IMPORTANT: DO NOT base any decisions on the Opportunity Score alone! I believe that manually observing the sales, reviews and ratings for the top 20 to 30 listings is a much more accurate way to determine whether a product has potential or not.
In the same way, I simply ignore the average monthly sales, rank, price and review numbers at the top part of the Extension. What is average? It could be that one listing makes 1000 sales per month and nine others make just 10 sales per month. In that case, the average would be 109 sales per month, per seller, which is a number that doesn’t mean ANYTHING!
The true marketplace information and the true demand and supply information can be found on the first page of the results. Usually, I will look at the first 20 or 30 listings to evaluate the sales, competition/reviews and ratings. Let’s cover each one in more detail.
The very first thing I look at are the sales numbers. These are shown next to each listing in the Monthly Revenue column. You could also look at the number of items sold per month, but personally, I just like to look at the sales numbers.
What do we see in my example search for “empty tea bags”?
The sales are low. Not super low, but still low. (In my opinion, super low is when there are no listings with sales of more than £1000 per month, or maybe just one or two such listings).
This is where we need to take a quick break and clear the air about Sales Volume. How you look at these numbers depends on your personal situation, experience with Amazon FBA and the budget you have to invest in this product. For someone who is an experienced seller with tens of thousands of pounds to invest, the target numbers will be different compared to a person just starting out with a £1000 budget.
I have been helping people to start eBay and now Amazon businesses for more than 15 years. I have personally read thousands upon thousands of emails from people with different life stories and situations. I can honestly say that the typical person who follows me is someone with a starting budget of £2k to £3k. Only very rarely will I see someone with a budget of £10k+, and it is extremely rare for me to encounter new sellers with budgets of £20k, £30k or more.
For that reason, I specifically created my market research methodology for people starting out with small budgets of £1k, £2k, £3k or maybe £5k max. And for that reason, this is how I classify sales numbers:
- Ultra/super-low sales. When 90%+ of the top 20 listings have sales below £1k per month. This is what I would class as very low demand on Amazon UK.
- Low sales. When at least 4 to 5 (or more) listings from the top 20 have sales above £1k per month.
- Medium sales. When there are listings that have £3k, £4k, £5k or more per month in sales, plus lots of listings with sales of £1k+ per month. I’m sure we’ll see and cover such situations in future posts in this series.
- High sales. When there are multiple listings with £10k+ per month and very few listings that are below a few thousand in sales per month.
- Ultra-high sales. Most of the listings have tens of thousands of pounds per month in sales. There won’t be any listings with sales below £5k in the top 20. You can see such epic numbers when you search for popular items, such as “iPhone case”.
I hope this all makes sense now! Going back to our “empty tea bags” example, I would classify this as a “low-sales” product as there are more than five listings in the top 20 that have sales above £1k. And the way I usually look at this is, if there is a listing making almost £2k in sales per month, then with a perfect product, listing and strategy, I should be able to replicate that or even exceed it.
Whether or not a product with such low sales is suitable for you is something you have to decide on your own. As I have said multiple times, with Amazon becoming more and more competitive, going into small niches may actually be the best strategy to follow now. Build up a portfolio of 10 or 20 of these low-sales products and you have a business with a turnover of half a million a year that should generate a decent enough net profit to call it a full-time business.
Obviously, if you’re looking for a more aggressive strategy and you want to invest more money into one product to have much higher monthly sales, a product with low sales numbers won’t be suitable for you.
Now, let’s talk about competition.
There’s no real way of seeing the competition level with 100% accuracy using just the Extension, but we can at least understand how difficult it would be to rank a new product by looking at the number of reviews.
The more reviews the listings in the top 20 search results have, the more established they are and the more difficult it will be to outrank them.
This is not the only indicator, but it is a QUICK way to gather information about the POTENTIAL competition you are facing!
As we can see from the screenshot, there are four listings that have more than 100 reviews. One of them has 200+ reviews and another has 300+ reviews. These last two are definitely established listings with solid long-term rankings.
On the other hand, there are also many listings in the top 20 results that have less than 10 product reviews! I look at this the same way as the sales numbers. If those sellers can get into the top 20 or even the top 10 results in the search with less than 10 reviews, I can do the same—if not better!
And that’s how I look at the competition. I estimate how easy or difficult it would be for me to take their place in the search results and outrank the current offers. As we can see, there is very little competition in this niche, so if everything else works out, it shouldn’t be too difficult to rank a new listing in a short period of time.
Another important note, going back to the size of the market/product, many people do not realise that the greater the sales for the product, the more money will be needed to launch it. It doesn’t matter if you use Amazon’s PPC ads, Facebook ads or Instagram influencers; the principle remains the same. The more sales the top listings generate, the more money you will have to invest into the launch.
To outcompete these existing sellers, you basically need to reach the same sales numbers they have using various traffic generation tools. Usually, it will be Amazon’s PPC ads. If the top 5 sellers in that niche sell 100 units a day, you will also have to reach those numbers and maintain them for at least some time to push your listing up the organic rankings.
Now, it’s no secret that brand-new listings with little to no reviews will have higher PPC costs. And, if you need to reach 100 sales a day, you might have to burn through hundreds of pounds per day just to maintain that sales velocity. Can you manage that? Can you burn £5k on ads just to launch a product? This is so important to understand when you’re doing your Amazon market research.
With the “empty tea bags” example, you can see that most of the sellers in the top 20 sell less than 10 items per day, with only a few listings selling more than that number. This means that launching a new product with PPC ads will be much cheaper compared to products with higher monthly sales numbers.
Ok, I got a bit sidetracked, but it was really important to explain this. Hopefully, from now on, you will look at these sales and competition numbers from a totally different perspective. It’s great to be motivated by HIGH sales numbers, but it can quickly get ugly when you actually have to launch a new product in that niche.
Speaking of ratings, at this stage of the research process, I usually ignore them. Ok, if the ratings are five stars for all of the top 20 listings, then I would possibly drop the product instantly. But maybe not. It would be very interesting to read those reviews and see how it is possible for every single seller to get all five-star ratings for that product (it could end up being a good sign).
Obviously, we’re looking for products that we can improve somehow, so, ideally, the ratings should be four stars or below on average. With that being said, I don’t rule out a product based on this alone. As we can see from the Jungle Scout results, most listings have average ratings of 4.5 and 4.0, which is good enough!
So, we have established that this product has low overall monthly sales and the competition is also low. Is that a green light that we have found a good product to sell on Amazon? Not so fast!
This is where things get serious. This sorts the men from the boys. This is the MOST IMPORTANT step in the Amazon product research process, yet so many people don’t realise it, no matter how many times I repeat myself.
Numbers don’t mean anything. YouTube is full of “Amazon gurus” who promise to teach you how to find “profitable” products to sell on Amazon by simply looking at Jungle Scout numbers. I’m afraid it doesn’t work that way. The actual work begins when you have validated the sales and competition and begin to get into the manual research.
So, what exactly does “manual research” mean?
It means that you start using your brain to research the product in question from the inside out. This includes:
1) Researching all the current competitors selling that item on Amazon. Examine how professional they are, how long they have been established, what customers say about them, what information you can find on Google and Facebook about them, etc. You have to thoroughly examine your competition to fully understand whether you can compete with them or not.
2) Reading all the product reviews. Yes, this means reading hundreds or thousands of reviews on Amazon to truly get into the customer’s mind and understand if they’re happy with the current products offered for sale, what problems they’re facing, how the product could potentially be improved, etc. If there are not enough reviews on Amazon UK, go to Amazon.com where you will find lots more!
3) Researching the product inside out! By reading the same reviews, forum/blog posts, watching YouTube videos, reading manufacturer websites, etc., you will very quickly become an EXPERT on this product! You’ll know exactly what materials are used, what features are needed, any special certification requirements, expiry dates, etc. You must become an expert in this product so that you can properly communicate with suppliers, come up with product improvements and more!
4) Reaching out to suppliers and getting MOQ and pricing information. Yes, you will need to find at least a few suppliers on Alibaba.com, contact them to get prices, MOQ information and other technical information that you may need (such as packaging requirements and order lead times). You will have to know if the product variation you plan on launching is viable and whether it can be manufactured, how much it will cost, etc.
5) Calculating costs, potential profit and allocating your budget. The last step is to put all those numbers together and see whether you can make a profit or not. There will be times when you spend 10 to 20 hours on this manual research process only to find out that the product is not viable and not profitable. That’s life. It’s much better to get this information before you have spent any money on samples, designs or a product order.
This is a manual research overview. I won’t go into the details on what exactly you need to do because this post is not about that. But just so we’re clear, while this is a time-consuming process, that’s about all it takes—your time! There are no costs involved. Just spend at least a few hours a day—stop watching Netflix—and complete the task!
Depending on how complex the situation is, you will have to spend at least 10 hours on this process, if not more. Usually, I spend 30, 40 or more hours on a product before I decide to invest. There have even been times when I have done this research for several months before making a final decision.
I have always said that this is NOT a business for lazy people! Yes, once you do the work, launch and rank your product on Amazon, it becomes a lazy person’s business because there’s not much you have to do on a daily basis. But, in the beginning, you will have to put those hours into this process. If not, don’t wonder why your products are not selling. Just don’t.
The three main reasons why we’re doing this time-consuming, extensive manual research process are to:
- Properly assess the competition
- Understand customer needs, reactions or wants
- Become an expert in this niche/product
Once you tick those three boxes, you will know exactly what to do with the product to:
- Improve it
- Stand out from the competition
- Create an irresistible offer!
You can’t do that without doing the manual research. That’s why this is so important. There’s also the branding part (which is hugely important), the listing presentation and the launch process, but we won’t be covering those in this post. If you want to learn more about all that, check out my Amazon Sharks video course where, in 20+ video lessons, I show you from A to Z how to start a successful Amazon FBA business.
The good news is that you can research multiple products at the same time and cut the waiting time on tasks that are out of your hands (like waiting for supplier answers about MOQs and prices). But don’t be mistaken! This is work that needs to be done and this process will be the difference between an Amazon product launch FAILURE and a success story.
I will talk more about this process in next week’s blog post, but for now, let’s sum up what we have learned so far today and whether the “empty tea bags” product has potential or not.
Ok, this post is getting ridiculously long. I just wanted to quickly show you how to “properly read” the Jungle Scout Extension numbers to determine whether a product has potential or not. But it’s really not that simple and there are hundreds of moving parts you need to consider, especially if you’re just starting out.
Going back to the “empty tea bags” product example, from the research I did, it seems like this product is really not that great, and that’s mainly because of the price of the product.
The price point is very low. Most of the product versions are sold in the £5 to £10 price range, and while £10 is not a bad price point, that kind of deal requires a huge package/quantity, which further increases the product cost and FBA fees.
There are some quality issues with the current offers that I could most likely fix. The buying power required is also not that big as this is a very cheap product and you can buy a HUGE quantity of bags without spending that much.
The area I was interested in was unbleached and/or organic bags, and those have a much better price point and margin. Unfortunately, the demand for these bags is too low to call it a viable product option. At least for me. For someone who is happy to make £200 or £300 profit per month from this single product, it could actually be a good option, especially considering the low competition and low buying power needed to enter this market.
As I said at the beginning of this post, I don’t have enough time to do FULL manual research into these products just for the purpose of this post, so it could be that I missed out on something important. Please use these examples and information as guidance, not as advice on whether empty tea bags are a good product to sell on Amazon or not.
And that’s about it. Since we have now covered the most important information on how to read the market size (sales) and competition and do manual research, in the next post, I will be able to spend more time on the actual numbers and show you some more results and interesting scenarios.
If you need any advice or have questions about the Amazon product research process or how to use Jungle Scout, please leave your comment below the post and I will personally reply within 24 hours, Mon. to Fri.
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Very interesting post indeed Andrew !
Thanks Gilles! 🙂
Maybe I just get confused easily but Andrew when you talk about sales numbers I keep thinking you mean daily and monthly sales, when you mean revenue numbers are the first thing you look at yes?
Sorry, not sure I fully understand what you mean by that…?
Can you please explain it in more detail?
Hi Andrew. You say this: “The very first thing I look at are the sales numbers. These are shown next to each listing in the Monthly Revenue column. You could also look at the number of items sold per month, but personally, I just like to look at the sales numbers.”
When you say you like to look at the Sales numbers, are they the numbers in the Monthly Revenue list with the £ amounts? I think so but getting confused when you say Sales numbers because I then think you mean the Daily Sales and Monthly Sales.
The first thing you look at are the Sales numbers in the Monthly Revenue column, is that correct? Thanks.
Yes, that is correct 🙂
Cheers Andrew, very insightful as always
Thanks Matt! 🙂