3 Key Components For Evaluating A Product’s Potential Profitability On Amazon


One of the most important factors in evaluating your next product, is to determine the potential profitability that it could have.

After all, unless it’s a loss-leader product, your profit margin will determine how quickly you can grow and scale your product.

That’s why we look at these 3 key components for every product we evaluate, to decide whether we should move forward and consider selling it, or drop it and look at other products:

  1. Analyze Proven Sellers
  2. Proper keyword research (search volume + converting long tail keywords)
  3. Calculating Profit Margin

The first key component in this process is to:

Analyze Proven Sellers

We do this so we can see how well potential competitors products are selling.

While we’ll give you a quick breakdown in this post, you can read a more in-depth walk-through in this post:

“How Many Sales Are Your Competitors Really Generating?”

Here’s a super-quick way to see how well other products are selling.

Go to Amazon and do a search for the products you’re considering selling, then click the ASINSpector Pro icon in your Chrome Browser bar…

…and in seconds, you’ll have all the competitive data you’ll need to analyze how well the competitor’s products are selling.

[Don’t have ASINSpector Pro yet? Then get your copy right now]

Here’s a quick example:

From a quick glance at the data, you can see Estimated Sales and Estimated Revenue for the month for each product. You can also sort the columns by numbers, so you can see the products by those with the greatest total revenue and/or sales at the top.

I can’t tell you how many products I’ve looked into where I really liked the product, and sales were great, but estimated revenue was really small, so I decided to pass.

However, as I mentioned at the beginning, if something sells a lot of units, but does not have a ton of revenue, you may want to save that product as a possible “loss leader” where you sell related products that have higher profit margins, but use the loss leader as a way to sell a bunch of products fast, in hopes that they naturally want to add your other related products to their purchase as well.

The important part in this process is to evaluate as many products as you can quickly, which is why a tool like ASINSpector Pro is a must-have tool, because it researches in just seconds what used to takes hours and weeks before.

Now that we’ve evaluated various proven sellers, it’s time to look at the next key component.

Proper Keyword Research
(Search Volume + Converting Long Tail Keywords)

The next key component in finding the right products to sell is doing proper keyword research.

I’ll show you the quickest way to get this information, but if you want a more in-depth walkthrough, you’ll want to check out this article on our site:

“How To Find High-Converting Amazon Buyer Keywords Fast”

Again, the best and quickest way to find this information is to go to Amazon, do a quick product search, then click the ASINSpector Pro icon in your Chrome Browser.

Once your data has loaded, you’ll click on the “Key” icon, which then brings up all the most searched keywords, their position and the number of results.

With this data, you can now see at a glance which keywords drive the best and highest converting results. You can also export the results to keep handy later as you select your products and begin to set up and optimize your Amazon listings.

Research and save as much of this keyword data as you can so you can compare products and see which have the most searches and which keywords products actual results so you can select the best products to work with.

This data will also quickly show you which products to avoid due to having little demand and slow sales. After all, there is nothing worse than sinking your hard-earned money into trying to sell something that nobody wants.

Next, we’ll look at the component, which we’ve touched on briefly above…

Calculating Profit Margin

At the end of the day, you’re in business to make a profit. That’s why finding and selling products with the best profit margins is the key to being successful.

A quick way to know your potential profit margins is to know how much your product will cost tp produce.

Those numbers will include such things as:

  • Upfront Costs per product
  • Fixed Costs
  • Variable Costs
  • Advertising Costs
  • Giveaway and Promotions

Once you know how much it costs you per item you sell to bring your product to market, you can quickly check your profit margin using ASINSpector Pro using the “Get Net Payout” section of ASINSpector.

You simply enter the sales price you want to sell for, how much each unit costs, then click “Get Net Payout” and it will show you your profit on each unit sale after it factors in your Amazon fees.

From there, you need to decide if you can live with the profit margin of the products you’re evaluating at the sale price and unit cost after removing Amazon fees.

Bottom line – the time you spend researching these 3 key components for as many products as you can, is the most valuable time you can spend in your business.

As you continue researching, your eyes will be opened to lots of new options and possibilities like never before. Products you thought would be winners won’t be, and the ones you thought nobody would buy may show themselves to be the best products to launch with due to sales volume and margin.

This is probably the most fun part for me on the process (outside of watching sales roll in), so be sure to have fun with this part as well and make it a game to see if you can beat your previous “best” product finds as you continue your research.

Make your research time quick and easy – let the ASINSpector Pro Amazon Research Tool do all the hard work for you.

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