In 2020, Amazon grew by 50% to a value of $300 billion US. This growth clearly indicates that Amazon is an unbelievable opportunity for thousands of new sellers. However, at the same time, only 2-5% of all Amazon products bring in enough profit to build a business. The rest result in zero profit or even a loss.
Here is a conversation with the CEO of a company that enables people to start their Amazon business and find a product that will actually build profit in this increasingly competitive market.
Please describe the story behind AMZScout: What sparked the idea, and how has it evolved so far?
In 2015, my friends and I were thinking about how e-commerce, specifically Amazon, developed so quickly. This growing trend seemed likely to continue. Naturally, we were interested in how new sellers were joining Amazon. We talked to a number of them and found that while starting a new business and launching new products is very promising, it is also challenging.
The main challenge sellers kept mentioning was deciding which product they should start selling to make a profit. We decided to focus on this challenge. We created some educational materials to help newcomers understand the process of selling on Amazon and the basics of making a product choice.
Next, we designed a browser extension for evaluating how profitable a given product would be. This extension took off and quickly began to grow in popularity.
What services do you offer?
AMZScout now provides a complete set of tools for selling on Amazon. We help individual sellers, established companies, agencies, retailers, and even big-name brands. Whether you want to find your first product ever or consider expanding an established business into a new category, you want to make sure that the money and time that you invest will pay off.
We enable sellers to find product opportunities and identify which of them are most likely to make a profit on Amazon. Locating a supplier for those products can also be done in a few clicks with AMZScout. You can even choose between local and international suppliers. Amazon businesses of any size have to make a marketing effort to actually sell their stock.
With AMZScout, you can get the keywords needed to create attractive product listings and Pay-Per-Click ads. This ensures that customers will find and buy your product.
AMZScout also provides Amazon Trends reports with growing niches and categories, fresh profitable products, and tips about beating the competition. These reports are used by newcomers to have a quicker start to their business, and by agencies, retailers, and brands to grow their business.
What is the mission of AMZScout?
AMZScout’s mission is to increase Amazon sellers’ profits and make running a business easier for them by providing accurate market data for investment decisions and product marketing.
Who are your typical customers, and what do you think is the main challenge that your product solves for them?
Our main customers are Amazon sellers, retailers, agencies, brands, and those who want to start selling on Amazon.
- For individual sellers, the challenges are identifying profitable products and then attracting customers.
We help them by providing sales data that shows how much they can make on a product, identifies if it is seasonal, and shows existing competition in the niche. Users can then use AMZScout to get keywords for their product listing and ad campaigns. These are major steps in promoting any product. A low-competition product with an attractive listing and cost-effective ads allows sellers to grab a piece of their niche’s sales.
- Bigger companies and retailers of course need to find new products to launch and then market those. They also have additional challenges, like monitoring Amazon trends to figure out where they should expand and prepare new product launches. They also need to track competitors to make sure that their niche share is growing and not let anyone bite into their own profits.
This is where our Amazon Trends report comes in by sharing growing niches and categories, fresh profitable products, and categories to avoid in the near future. Large brands may also order customized market research targeted at their products and competitors. This allows consideration of expansion into new niches or finding ways to increase the market share.
- Another customer type is beginner sellers. They face the same challenges as individual sellers. However, they have another hurdle to overcome, which is learning the process effectively to avoid losing their investments through rookie mistakes.
This is why we do a lot to help new sellers. For example, we have a free course about how to sell on Amazon. We also offer free masterclasses by 7-figure sellers to equip sellers with more advanced strategies for making money on Amazon.
Having studied the materials we provide, new sellers can confidently start market research and launch their products. They can even start making a profit within a week or two, depending on the selling method they choose.
Which trends and technologies do you find to be particularly intriguing these days?
Right now, the most exciting area in our work is AI and Big Data is used to identify super early Amazon sales trends. This allows businesses to catch growing trends more quickly than has been possible in the past with traditional analytical tools. This means that it is possible to claim a profitable product niche early when there is very little competition and dominate it.
One of the most prominent product trends is Ecological. Eco-products and packaging are growing in demand. Consumer surveys show that people all over the world are becoming more aware of the pollution problem, so they prefer sustainable items made of natural materials. Amazon is supporting this movement by getting rid of single-use plastic packaging in India as an example. Items ranging from cotton shopping bags to natural brushes are products that are more and more in demand as evidenced by AMZScout analytics across marketplaces.
The next technological trends I should mention are virtual fitting rooms and 3D mockups of products. Also, fast batch video production fulfills a need for producing videos that demonstrate how the product looks, what it can do, and what you can do with it. The product pages that offer perks like these have higher sales conversions because people understand more about the products. Customers are more confident that clothes will fit with these new options because one of the reasons that people don’t buy something online is that they can’t try on and touch a product in real life.
In the near future, we will also see drones helping to deliver your order more quickly. This will have a huge impact on both sellers and customers. Buyers will be able to obtain an item they need within minutes. This will dramatically increase the quality of life for some groups of people.
How has COVID impacted your customers and business?
During the pandemic, many people realized that they would benefit from some extra income working online and that one of the easiest ways to do that is to sell things in small quantities.
The only problem is identifying profitable products with low competition that are easy to start selling quickly without starting your own label. This fall, my team developed a browser extension that opens on any Amazon product page and shows all of the profit metrics and flags that you need to know to select a product effectively.
For all of the sellers online, it has become even more vital to quickly spot the products that have growing sales because a lot of sellers are looking for these products, and will saturate the market within a few months. This is why we came up with an algorithm that spots such products in AMZScout PRO Extension and Product Database.
Now, our users can enjoy finding hot-selling novelties without wasting precious time googling potential trends. AMZScout sellers are the most successful sellers, which is confirmed in stories like Alex’s.
In some ways, it wasn’t easy. Customers looked for deeper discounts, special deals, and overall support. We did our best to meet their needs, introduced new plans, new valuable features and bundles, and more educational materials. Thanks to these efforts and increased interest in our tools, we actually managed to grow over the last year.
The pandemic has had a complex effect on Amazon and our customers. Overall, sales went up while Amazon revenue and profits surged because people shopped online even more. At the same time, the average product price went down, so lower-cost products have seen a steady growth while some more expensive products have had their sales dip.