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Finding an Amazon Niche

If you’re selling on Amazon, you’ll eventually notice that just about any product can get into a price war.  Someone decides they’re going to undercut everyone else to take the volume, and survive on thin margins.  Usually it’s a large seller with lots of volume.  Check out any of the most popular toys selling on Amazon as an example.

What can sellers who are just starting out do?

My suggestion is to start with products that aren’t going to invite a lot of price competition from large sellers.  E.g., you can focus on products that have good but not great volumes.  Products that rank in the 10K – 50K range are often good candidates.  Do make sure you track their sales rank for a couple of weeks to make sure they never drop below about 50K.

If you have a reliable source of used products of a single sku that can also be a good choice.  Most of the high volume / thin margin sellers want to concentrate on new products.  If you go this route it’s important that your source of products be pretty stable.  It takes time to create a good listing, so you need to sell a lot of products to make it worth your while.  A notable exception to little competition selling used products, though, is books.  There’s a lot of competition in used books.

Products that need preparation before being sent to an Amazon warehouse can also be good candidates.  Some high volume sellers handle their own fulfillment, but many send their inventory to an Amazon warehouse for FBA fulfillment.  If they do, they probably don’t want to spend the effort on a lot of manual, time-consuming product preparation, and will skip selling such skus.  However, if you’re fulfilling your own sales, you don’t have to worry about prepping the products to send them to Amazon.

You can also sell unique products, like your own art work or craft work.  A clever example of this I read about was someone who could print t-shirts on demand.  He had a program that generated random messages, and create an image of a t-shirt with that message (so he didn’t have to actually make a t-shirt with that message until an order was placed).  Then he had a program create an Amazon listing with the message, using the image created earlier.  In this way he was able to quickly create millions of unique t-shirt listings on Amazon, and of course no direct competition.

There’s no limit to the number of ways you can succeed selling on Amazon, but it will take a lot of effort to come up with a reliable way you can win.  The important thing is to actively work on finding a way to win, rather than just trying to compete on price, or hoping no one else starts competing with you.

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I’ve updated my list of potentially good products for you to sell on Amazon for August.

 

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