How to Make Money on Amazon FBA with Private Labeling in 2018 (Jungle Scout Tutorial)


Hey guys. In this video I’m going to be giving you my
updated for 2018. Step by step tutorial on how to pick money
making product to private label and sell on Amazon using the FBA program. Even if you’ve watched my last years video
tutorial, I do strongly recommend that you watch this one. Not just to see which winning item I find
using my formula. But also because I’m going to be giving some
extra tips in this one too. Now what I’m going to be teaching you how
to do is to find items that have high buyer demand, but low sell competition. It’s important when you’re researching these
items to note what criteria to look for. I’m going to be giving you my exact formula
to judge items by. I’m also going to be switching back to my
computer and using this formula to find a winning item on this video. So that you can follow along with me. And If you stick around until
the end of this video, then I will show you how I found the manufacturer for the top rank
compeitor for this product at the time of filming this video. You’ll see how this private labeler is purchasing
products for just $3.00 a unit, but then selling it for $21.00 a unit. That is a huge profit margin. Let’s jump straight into the video. Step one, research a list of potential high-profit
items. In this tip we’re going to be researching
the item listings on Amazon and looking for ones that meet the following criteria. One, they have 50 reviews or less. Two, they’re selling more than 300 units a
month. Three, they have a price point of between
$20 and $50. Four, they weigh two pounds or less. What we’re trying to do here is we’re trying
to find an item listing that is making lots of sales as in over $300 a month, despite
having low numbers of reviews. Because, you see, when we create an item listing
to start with we’re not going to have many reviews. We want to have proof that products still
sell well in this niche, despite having low numbers of reviews. The reason why we have set a minimum price
point to be $20 is because we still want to be making at least a 30% profit margin after
we account for manufacturing costs, shipping costs, and Amazon FBA fees. Both set a maximum price point to be $50 because
usually our product with the high price point is expensive to manufacture. If it’s expensive to manufacture then you’re
going to need to have a lot of start up money. Think about it. If it costs you $20 to manufacture an item. You’re selling 300 units a month. That’s $6,000 a month in inventory costs alone. That is a lot of money up front for a beginner. We want to focus upon items that are going
to be low cost to manufacture. The reason why we’ve set our maximum weight
to be two points is because of the fact that heavy items are expensive to ship. We want to keep our shipping costs as low
as possible. We know what criteria we’re looking for. But it’s very, very difficult to go through
all of the items on Amazon and find winning products that meet it. When I made this tutorial last year, Amazon
had over 480 million products listed on its website. Now they have 530 million. That’s a lot of product. As I’m sure you can imagine, you simply can’t
go through 530 million products looking for the best ones. It’s impossible. Which is why we need to utilize research tools
during this process. The tool we are going to be using to massively
streamline this research process and saves us days, if not weeks of time, is the Jungle
Scout product database. Which is included in the [Webix 00:03:33]
subscription. There are multiple pricing labels for the
Jungle Scout web app, but for this step we only need the lowest cost one which is the
Start Up edition. In addition to the web app, we are going to
be using the more famous Jungle Scout tour which is the Chrome Extension. But we’re not going to be using it in this
step. We’re going to be using it later in the video. I’ll have a link to how you can get Jungle
Scout’s tools in the video description below. Please be aware that as an affiliate link
here at Wholesale Ted, all of our YouTube videos are free. Affiliate links helps us keep our videos free. Okay. I’m going to switch over to my computer now
and show you exactly how to do it. Start out by coming to the product database
inside the web app. This tutorial is for Amazon.com. I’ve selected USA from the list. You can select other countries. If you wanted to sell in the UK, you could
select that. But I’m going to choose the USA since it’s
the biggest market place. All right. Now it’s time to select a category. There are a lot t pick from. To get started I recommend selecting one that
you like. I’m going to select ‘Kitchen and Dining’ since
I’m a bit of a foodie. Now we need to modify the filters to look
for high profit, low competition products. Come to Price. Set the minimum to be $20 and the maximum
to be $50. Now come to Estimated Sales. Set the minimum to be 300. Next come to Reviews and set the maximum to
be 50. Finally set the maximum weight to be two pounds. Click the Results Per Page button and select
200 so you don’t have to sort through lots of pages. Then just click Search. That’s it. Jungle Scout is now finding all the products
in ‘Kitchen and Dining’ that meet the criteria that we set. Cool. We’ve got our list of products. Now we need to go through the list and filter
them further. Step two, pick the best products to analyze. What the web app has done is it’s gone through
our chosen category and it’s identified items in that category that meet the criteria. Now this is a huge help but it’s still not
perfect. There is some criteria that is going to make
most of the items in this list unsuitable. It’s criteria that unfortunately tool sand
computers can’t filter out for us. We’re going to have to go through manually
and use our brains to sort through the list. Here’s the criteria we need to be looking
for. One, it is not a big brand product. Remember when you’re looking for a product
that’s making lots of sales despite having low numbers of reviews, big brand products
don’t count. Why? Well, because they have an extra advantage
over us. Even though they’ve got low numbers of reviews
people are going to purchase from them anyway because they recognize them. Plus, while it is okay to have a few big brand
products in there that we’re competing with, we really want to pick niches where we have
as few as possible. Because again, they have an advantage over
us. Two, it won’t be easy to break on transit. Not only will this cost us money in having
to replace inventory that was broken on transit. But when customers get items that are broken. Then they’re going to be asking for refunds
which is going to hurt our Sellar statistics. Also, we’re going to risk that they’re going
to leave negative reviews. Stay away from products that have fiddly electronics or are made out of easy to break materials like glass. Two, it won’t be bulky to ship. Again this is to keep our shipping costs low
so that we keep our profit margins high. Four, it doesn’t require variations. Now don’t get me wrong. There is nothing wrong with product variations. In fact, for some products this can greatly
increase conversions. But they are expensive. Why? Well, let’s take t-shirts. If you wanted to manufacture this t-shirt
and sell it on Amazon. Then you’re going to have to manufacture it
in extra small, small, medium, large, extra large. Not only will this make it more complicated
when you’re managing inventory, but it’s going to be expensive. Stay away from products that require variations. What you want to do is you want to go through
manually the list of items that the Jungle Scout product database has given you. Figure out which ones on the list meet our
criteria. When you find a product that does, add it
to your product tracker. This is another tool included as part of your
Jungle Scout web app subscription. Now I’m going to switch back to my computer
and show you how to do this. But before I do, I have a warning for you. I find that a lot of people make a huge mistake
during this process. Because they judge items using an additional
fifth criteria. That criteria is whether they like the item
or not. I had a very frustrating experience recently. I was teaching this method to a couple that
I know. They were going through the list and finding
items that met this criteria perfectly. Would they add it to their Product Tracker? No. Instead they’d look at it and they’d make
comments like, “Oh, it’s not interesting enough.” Or, “Oh, I don’t like it.” They’d skip over it. Please, please, please do not judge items
by whether you think they are interesting or whether you like them. When you’re selling on Amazon listen to the
numbers. Just because you don’t have an interest in
a product doesn’t mean that someone else doesn’t want to buy it. It’s the biggest mistake that newbies make
when they start selling online. They try to pick items that they like and
that they think will sell well. Don’t do that. Take your emotions out of this. Listen to the data. It shows you what people actually want to
buy. Not what you think that they want to buy. Okay. With that out of the way, let me switch back
to my computer and show you the step by step process on how to do this. Okay. Let’s do this. I’m interested in this product. It looks easy to manufacture and it isn’t
made from easy to make materials. Plus it isn’t from a big, well known brand
which is perfect. I’m going to click this button to add it to
my Product Tracker. When successfully added you’ll get a success
message. I’m just going to scroll down now and look
for another promising product to analyze. Okay. Here’s an example of a bad product. First of all it’s from a well known brand
Anchor. A big part of why it’s getting lots of sales
despite small number of reviews will be the brand. Not because competition is low. Plus it’s made from glass, which is easy to
break on transit. We want to focus on products made from sturdy
materials like plastics, stainless steel. Or soft materials like nylon. Let’s keep scrolling down and look for more
items. Don’t get discouraged if this process takes
a long time or you have to try different categories. It’s absolutely normal and a good thing. Since it means that there is a barrier to
entry which helps protect your product and business from being copied. Now this one looks interesting. It’s made from plastic which won’t easily
break and it’s not from a big brand. This is a generic, private label brand someone
has created. I can see that they’ve made different color
variants but it wouldn’t be necessary if we produced one in a neutral color like black. I’m going to add this item to my product tracker. As you can see, it was successfully added. All right. We’ve got two products to analyze which we’ve
added to our product tracker to make it easy to keep track of. It’s time to move on to the next step. Step three, analyze the competition. All right. We know that our items have potential because
we can see there is at least one seller that is selling over 300 units a month of it despite
having low numbers of reviews. But that isn’t enough. We now need to go through the list and see
if there are multiple sellers that are selling lots of units a month, despite having low
numbers of reviews. This is for two reasons. Of course, first of all, it indicates that
the seller competition is low. But just as important, it indicates that there
is plenty of buyer activity and lots of market depth. To analyze the competition, we’re now going
to be using the Jungle Scout Chrome extension. There are two versions of this. I really love the Pro Extension and I use
it over time when doing research on Amazon. I highly recommend it if you can afford it. But for this tutorial, you will only need
the Lite version. What we’re going to do is we’re going to take
each of the items that we added to our Product Tracker. Then look at the top 10 competitors for that
product and analyze them based upon the following criteria. One, the price on average should be $20 or
more. You want to look at a product and take the
top 10 competitors for it. See if on average they’re selling it for $20
or more. Again this is crucial because when we launch
our product we want to be pricing at at least $20. So that we have plenty of room for profit
after manufacturing costs, shipping costs, and Amazon FBA fees. But if we see on average that the price poin
is below this, then it’s going to be very difficult for us to come into the market,
price our item at $20, and still remain competitive. It means then that if a product doesn’t meet
this criteria then unfortunately we’re going to have to throw it away and look for an item
that does have a higher price point. Two, we want to see that the top 10 sellers
are selling at least 3,000 units plus a month collectively. Market depth is crucial. We want to see that there are lots of buyers
out there that want to purchase our product. Go through the list of the top 10 sellers
and add up all of the units that they are selling. If it’s below 3,000 units then the market
depth is not strong enough. Three, we want to see that at least half of
the sellers are selling 300 plus units a month. While market depth is very important it’s
utterly useless, if there is one seller selling 2,000 units a month but the other nine sellers
fighting over the scraps. We want to see that there isn’t just one big
brand out there dominating all of the sales and stealing them for themselves. We need to see that at least half the sellers
in the top 10 are selling 300 plus units a month. Because it indicates that buyers are willing
to purchase from multiple merchants. Four, we want to see at least one seller in
the top five competitors that has 50 reviews or less. Go through the top five competitors on the
list and see if there is one seller in them that has 50 reviews or less. Five, we want there to be at least three sellers
in the top 10 competitors with 50 reviews or less. Of course, in addition to this, we also want
to see that if you take the top 10 competitors that at least three of them in there have
a product listing with 50 reviews or less. Again, this indicates that you can still be
successful selling this product even if your listing doesn’t have tons of reviews. If the time doesn’t meet this criteria then
it’s too competitive and it’s too risky. It’s going to take time for us to build up
reviews for our product. We can’t just race to 200 reviews. Okay. We know what we’re looking for. Let me switch back to my computer and show
you the step by step process on how to do this. Start out on your Product Tracker. I’m going to open the listing for the first
product I added, these measuring cups, by pressing this button. What we’re going to do is do a search on Amazon
for other items that are like this. I’m going to come to the search bar and type
in “12 stainless steel measuring cups” and do a search for it. We’ll then analyze this items competitors. As you can see we’re on the search results
for this keyword. On the search page come and click the Jungle
Scout Chrome extension button in the top right corner of your browser. Be sure to give it time to load up and analyze
the results. All right. Let’s see if it meets our criteria for price. As we can see, it does. All but one listing in the top 10 for those
keyword has a price point of $20 or more, which is perfect. Now let’s analyze the sales. Now unfortunately this item does not meet
our criteria for sales. While there are more than 3,000 sales a month
being made across the top 10 products. Less than half the results in the top 10 are
selling over 300 units a month. With the other six products making less than
100 sales a month, with three of the products making less than five sales a month. That is very bad. That means this item is not suitable to private
label. But we’ll continue on with the analysis anyway
for the sake of this example. Let’s analyze the reviews. We can see that one of the items in the top
five results has 50 reviews or less, which is good. It has more than three products in the top
10 results with 50 reviews or less. On the surface it looks good until you realize
that three out of four of those listings are making five sales or less a month. Not so good. Unfortunately this item is not suitable to
private label and sell. Let’s switch back to the Product Tracker and
analyze the next item. See if that will meet our criteria. Okay. Now we’re going to analyze this leak proof
lunch box. I’m going to open up the Amazon item listing
for it. Once again, come to the search bar. Do a search for a keyword related to the item
that you are analyzing like I am doing here. As you can see we’ve loaded up the search
results for the key word “leak proof lunch box.” Once again, click the Jungle Scout Chrome
extension button in the top right corner of the browser. Again, be patient, letting the results load. Let’s start out by analyzing price. Yes, only one item in the top 10 results has
a price point below $20 which is perfect. It means that we will easily be able to charge
at least $20. Okay. Let’s analyze the sales. Yes, it meets this criteria too. The top 10 results are collectively selling
over 3,000 units a month. More than a half are selling over 300 units
each a month. The other item listings that aren’t selling
this much are still selling over 100 units a month each. The sales are spreading through the listings,
which is great. Now let’s analyze the reviews. It meets the criteria of having at least one
item in the top five results with 50 reviews or less, with two item listings meeting that
criteria. There are four items in the top 10 results
with 50 reviews or less, which is exactly what we want. As you can see, this would be a fantastic
item to private label and sell. Having high demand, but having low competition. Awesome. We’ve found a great product to private label
and manufacture and sell on Amazon using the FBA program. I’ve actually got a bonus step for those of
you out there that have some extra money and time to invest into the research process. It isn’t necessary but it’s still good to
do. Bonus step, analyze the SEO competition. My subscribers here at Wholesale Ted will
know that I love free search engine traffic. Luckily, when you’re selling on Amazon it’s
a free, organize, search engine traffic that’s going to be making you most of your sales. The vast, vast majority of your sales are
going to be made by people coming into the search bar, typing in relevant keywords for
your item, and then it being on the fit page of results. Now there are multiple factors that make some
listings appear on the first page and some not. One of the factors is of course using your
key word throughout the listing. That is important. But that is a huge factor that Amazon looks
at, is how high converting your product page is. A high converting product page will have awesome
pictures, a great title, fantastic bullet points and an excellent product description. Ideally what we really want to find is a product
that meets our other criteria but also has a bunch of competitors that don’t have optimized
product listings. That means that even though we’re new to the
market, we can come in, great a better listing than our competitors and get a slight edge
over them. To do this I use the Niche Hunter which is
a tool included only in the Standard and Business editions of the Jungle Scout web app. Unfortunately it isn’t included with the lowest
cost subscription, the Start Up which is why this is a bonus step. But if you can afford it, it’s well worth
it. What the Jungle Scout team have done is they’ve
created something called the Quality Page Score, which analyzes all these factors and
helps you figure out if your competitors are well optimized or not. What we want to do is we want to type in our
products into the Niche Hunter. Then we want to look at the key words that
it gives us and see that there is at least one key word [inaudible 00:19:38] the competitor
that are targeting it, have low to medium quality page scores. We will then choose to optimize our listing
around that specific key word because of the fact that we know that the competitors are
currently not well optimized. It will give us an edge. As a bonus during this step I’m also going
to be showing you an example of a product listing that is poorly optimized and then
compare it to a product listing that is very well optimized. So that you don’t make any of these mistakes
for yourself. All right. Let me switch over to my computer and show
you exactly how to do this. Okay. This here is the Niche Hunter. Let’s use it to analyze key word competition. Come down here and type in the key word you
want to analyze. I’m going to type in “leak proof lunchbox.” Then click the Search button. The Niche Hunter has given me two common [searchful
00:20:29] phrases for this. You can see that changing the order of the
words makes quite a big difference. On average products rank for the key word
“lunch box leak proof” are making more sales, indicating more people search for that key
word. Which does mean overall more buyers. You’d think that you should target that right? But take a look at the competition. The products for the keyword “leak proof lunch
box” are far less competitive than for “lunch box leak proof.” Even though the latter keyword gets more sales,
it’s better for beginners to go after the easier keyword. Interestingly enough, the listing quality
score for both key words is quite similar. This wouldn’t be the deciding factor but the
significant difference in competition means most people should pick “leak proof lunch
box” as their primary key word. Let me show you why some Amazon product listings
have higher quality scores than other. Let’s open up our chosen key word. All right. That lunchbox that we found at the start of
this video has a listing quality score of 74. Not bad, but let’s open up that listing to
see why it doesn’t have a higher score and how it could’ve been better optimized. It has multiple pictures showing the product
from different angles. That is very good, but the pictures aren’t
in high enough quality to zoom in on which is bad. Being able to zoom in on pictures is important
for converting customers. Now the title is descriptive and key word
rich, which is good. However if we go and take a look at the bullet
points you can see that it looks like a gigantic wall of ticks that is difficult to read. This would be hurting the products conversions. Don’t key word stuff if it means you create
an unreadable wall of ticks like this. Finally, scrolling down, we’ll check out the
product description. A lot of people make mistakes with their product
descriptions on Amazon. Here is the product description. This is bad. I’m going to be honest. It is short and does not include any pictures
in it. It’s also very poorly written. Just reading it now, “the heat release valve
prevents the container of suctioning and being difficult to open due to hot contents.” That is not well written at all. This poor description will very much be hurting
the quality score for this listing. Let’s compare this to a super optimized product
listing. Jungle Sticks created by the founders of Jungle
Scout. As you can see they’ve uploaded lots of images
showing the product at different angles which is excellent. Plus they’ve uploaded images in high enough
quality to zoom in on. Which is again very important for converting
potential customers into buyers. Looking at their title, it’s nice and descriptive. Coming to their bullet points, they are very
easy and clear to read while still being descriptive at the same time. Now let’s scroll down and check out their
product description. As you can see, this is fantastic. It is descriptive, well written, and importantly
it has pictures in it. This is a fantastic item listing. If you manufactured and created your own leak
proof lunch box. Then made a listing for it that was like this. It should convert much higher than your competitors. All right. There we go. We know that if we can pick the right key
word to build our listing around, that has competitors that are not well optimized, that
we can come and create a better product listing and get an edge over them. Before I close off this video I just want
to show all the skeptics out there how easy it is to find a manufacture, to private label
the products that you find using this formula. At the time of making this video the top ranked
competitor for leaked proof lunchboxes was a private label brand called Modetro. With a little bit of research I was able to
uncover the manufacturer that this merchant on Amazon was using. They were purchasing the items from them at
dirt cheap prices and then reselling them for huge profits. Trust me, finding this manufacturer was a
lot simpler than you might think. Let me switch back to my computer and show
you my super sneaky detective skills. I’ve come to Amazon and done a search for
the top listing of our chosen key word. This listing here is the top ranked non sponsored
product. It’s a top result in the Amazon organic search
results. Okay. Let’s switch over to Alibaba and see if we
can find the manufacturer for this item. I’ve come to Alibaba and I’m going to do a
search for “slim bento lunch box leak proof.” Let’s see how hard it will be to find this
supplier for this item. Look at that. Here is the exact same lunchbox listed on
Amazon. Pictures are the same and everything. This Amazon merchant would be buying it for
$3.00 a piece and then selling it on Amazon for $21.95. A great mark up. As you can see. Finding suppliers on Alibaba is very easy. See, easier than you might think. I’ve actually made a free YouTube video on
how to find suppliers with Alibaba. I will have a link to that video in the description
below. There you go. That is my three step, or four step process
if you’re following my bonus step, formula for finding high profit, low competition items
to private label and sell on Amazon. If you would like to follow along with this
tutorial and find your own winning items. You’ll find a link on how to get both the
Jungle Scout web app, and the Jungle Scout Chrome extension, in the video description
below. Thanks for watching this video. If it helped you I’d really appreciate if
you’d gave this video a thumbs up and Subscribe to us here at wholesale Ted for more create
video about selling online. When you subscribe to Wholesale Ted be sure
to click that little notification bell next to the subscribe button so that you don’t
miss out on any of our new videos. Before you go, I’d like to give you one last
freebie. Here at Wholesale Ted we have a free ebook,
“How to Make $10,000 Online a Month with Drop Shipping.” You’ll find a link on how to download this
free ebook in the video description below.

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