Dominating Your Niche via Product Selection


Nick Young joins us on product selection in niche markets

  • Niche domination and strategy of product selection
  • Selling 8 figures a year thanks to this strategy
  • Go after a whole niche and dominate it
  • First 2yrs saw lots of growth with $2.5m in revenue off that first product
  • Went into Me Too products and did $7.5m in the 2nd year but profitability was dropping

 

  • Best products were where they added more variations in the same category
  • Niche products and niche markets was good
  • The original me-too products died as a lifecycle after a year
  • Now they have products that are lasting 2-3 years

How do you know you’ve hit the right momentum in the market?

  • The market can be too big and difficult to break into as it’s dominated by certain competition
  • The market is too small or narrow for you to expand sideways into it with more variations etc
  • How do you determine if the market is the right size to enter nad expand products into
  • Looking for $5k-15k monthly revenue
  • SIlicon baking mat has little differentiation so no good to add value to
  • Looking at doing multi-packs, bundling, etc
  • Evaluate the competition – is there an opportunity to be in the top 5 spot on keywords
  • Are the PPC results going into the 5th page still relevant?
  • If still relevant for the top 10 keywords it indicates lots of people going for this niche
  • Expecting Amazon to come after giveaways so we’re going for markets we can differentiate in

Launch with Variations?

  • Depends how expensive the product is
  • If ROI is massive with a 300-400% ROI and a cheap product with a high payout
  • Then we will launch with 3 products to maximise AMS and have a competitive advantage
  • Three also helps with logistics with the supplier
  • We test a lot
  • If we find one is working well then we’ll go back to the Supplier and roll out more variations to dominate
  • We aim to cannibalise before someone does it to us
  • Moneyballing is their strategy

Scientific Category

  • Scientific as a category
  • Industrial scientific has lower sales volume but is an opportunity
  • Sell where other people aren’t
  • Why don’t people want to do this product and how can I turn this to a competitive edge

Product Design

  • Have some patents
  • Just entering some product design but more around customising with colours and patterns

Manufacturing

  • All China or domestic?
  • Majority of OEM products are made in China
  • Domestic suppliers are not as quick as Chinese suppliers
  • US Supplements supplier has worked well
  • Domestic is a lot better cashflow-wise
  • Margin is less but return on cashflow is a lot faster
  • Did a BOM and got it a lot cheaper by getting everything shipped in to the manufacturer to get it put together
  • Negotiate 30-60 days with the manufacturer and getting paid every two weeks by Amazon

Domestic

  • Find the right partner for product selection and it’s terrific in the US
  • They are willing to try new things and make it happen
  • China is focussed on volume but domestic suppliers are focussed on relationships

Determine the Market

  • Based on search volume and keywords
  • Products with a broad amount of keywords
  • We want to go and rank for as many long tail keywords and synonyms as possible
  • Plug it into seller.tools with search volume
  • See sales volume before sourcing a product
  • Filter to exact searches and you’ll see how much opportunity you have to go after the keywords
  • Find only 3-4 competitors and call different with <100 reviews
  • And if no headline ads then they’re not tapping into the full marketing power that Amazon has

Launch Budget

  • Launch budget is how much for a product with 3 variations
  • First started with giveaways we would put down $50k
  • 1,500 units for giveaways and product landed at $5
  • We cut it down to max 8-10k per SKU and max 15k for all the variations
  • Sticking to a strict budget is key if launching rapidly
  • Now have 250 SKUs

Differentiating your Product

  • Merchandise it in a different way to add value
  • Difficult for others to compete against
  • They can drop price, increase PPC and Add Coupons but they can’t change their product
  • Arbitrage of FBA fees by changing the shape of a product to reduce the cost of Amazon Fees on your product and add to your margin
  • Shaved 2 inches on each size and dropped from small-oversize to large standard
  • This shaved $4 off the product and helped us destroy the competition
  • Optimising the carton size (63cm one-side and less than ~20lb to reduce costs
  • Work all this out even before we go to the factory
  • How many units can you get in a carton – used for 3PL but send in on a weekly loose cart based on sales velocity volume
  • Ask for a Bill of Materials from the factory

Optimising your Product Selection Research

  • 3PL optimise costing
  • Optimising on velocity
  • Reducing the size of the packaging
  • Flexible material to reduce size and reduce CPM
  • People get to the stage of finding the product and are exhausted
  • Do what people aren’t willing to do
  • Using the same tools as everyone else then you’re dipping in the same pond

Contact

Get FREE tools when you subscribe to the mailing list

Go to Your inbox to get Your:

•Private Label Calculator
•PPC Optimization Tool
•Amazon Refund Tool

Share This
%d bloggers like this: