I didn't realize that Amazon had such a precise 8 indicators for product selection! For Taiwanese sellers who are new to cross-border e-commerce, this is a golden key to success. Mastering these key indicators will not only save you valuable time, but also significantly increase your chances of success on the Amazon platform.
Indicator 1: Unique selling point of the product
On the highly competitive platform of Amazon, the fate of a product is determined by its ability to make it to the first page of search results. What's even more valuable is that a product with a unique selling point can make you stand out from your competitors and attract more consumers' attention. Nowadays, there are very few "crappy products" on Amazon, what's really lacking are good products with unique selling points that "consumers care about".
For example, if you sell a pot lid with a revolutionary technology that is completely unbreakable, this feature will set you apart from the rest of the ordinary pot lids. When consumers realize that they can buy an unbreakable lid for the same price, their perceived value immediately increases and they are naturally more willing to choose your product!
Indicator 2: Balanced conversion rate achievable
This metric is probably the most overlooked, but it's the most important! Amazon uses a PPC advertising model where you have to make sure that your product has enough profit margins to support the ads. For example, if your product has a profit of $10 and each ad click costs $1, then you need at least 1 purchase within 10 clicks to break even, i.e. a conversion rate of 10%.
Based on actual experience, different conversion rates are standardized for products in different price ranges:
- Products priced below $20 are expected to achieve a conversion rate of 151 TP3T
- Products priced in the $30-$50 range are expected to achieve a conversion rate of 10%
- Products priced over $50 are expected to achieve a conversion rate of 51 TP3T
This means that if you can't achieve a break-even conversion rate for your product, any amount of advertising is burning money, not creating profit.
Benchmark 3: Brand differentiation adds value to products
This is a great opportunity! When you realize that the competition under a particular keyword lacks a distinct branding and the product's header image is similar, you have the opportunity to stand out through unique branding. It's like when the whole class is in uniform and the only person in civilian clothes stands out.
Not only that, but you can also look at the price elasticity of the category to determine where there is room for brand premiumization. If the price of similar products in the market ranges from $50 to $150, and the high-priced brand is well regarded, this indicates that there is room for brand premiumization in the category. Of course, Amazon consumers are very savvy, and product pricing must be in line with perceived value.
Indicator 4: Low transportation costs or transportation cost advantages
This is often underestimated, but it has a huge impact! Amazon calculates logistics costs based on product volume, and "standard" sized products have lower logistics costs. If you can be more sophisticated in your packaging design than your competitors, the savings in logistics costs will translate directly into a competitive advantage.
Imagine that while half of your competitor's profit is eaten up by logistics, you save a lot of money because of smart design, which not only increases your advertising budget, but also allows you to quickly capture the market through more competitive pricing! This inherent advantage is especially important on Amazon.
Indicator 5: Monthly search volume of the most important keywords over 10,000 times
There is no demand without search volume, which is the basic rule of cross-border e-commerce! If a product's keywords are searched for more than 10,000 times a month, that means there are enough potential customers looking for this type of product. On the other hand, if no one searches for a good product, it will be short-lived.
For example, "Chinese medicine" is a household name in Taiwan, but in the pre-epidemic European and American markets, consumers knew very little about it, and the percentage of those who actively searched for and purchased it was extremely low, making it difficult to anticipate revenue from such products.
Indicator 6: Homepage 25% has less than 100 reviews.
This could be your breakthrough! If there are products with less than 100 reviews on the first page of a keyword search, it means that the category is receptive to new brands, and you don't have to start competing with the big sellers with thousands or tens of thousands of reviews.
Another scenario is even more noteworthy: if a product on the first page is generally rated with less than four stars, it may indicate that consumers are dissatisfied with the existing product. In this case, you can use third-party seller tools to analyze the bad reviews and introduce products that better meet consumers' needs, so as to stand out from the fierce competition.
Benchmark 7: Products with $5,000 in revenue
This is an invaluable indicator! If you have a product with low reviews but high monthly revenue, it means that consumers in that category value the quality of the reviews more than the quantity. At this point, you need to make sure of three things:
- Outperform the competition in terms of product experience
- Products that actually solve consumer pain points
- Build good customer relations and increase positive reviews
On Amazon, a platform that emphasizes consumer reviews, high star ratings drive sales more than the number of reviews, creating a huge opportunity for new brands.
Indicator 8: Pricing of products at the same level as competitors, while maintaining 30% margins.
This last indicator points directly to the cost advantage! In Amazon's highly competitive pricing environment, the ability to maintain 30% margins at the same price as the competition usually requires a manufacturing cost advantage. This advantage often comes from the own factories or close cooperation with them.
With this cost advantage, you can invest more advertising resources or quickly capture the market through more competitive pricing, laying a solid foundation for brand development.
Running Amazon is like investing in stocks. Instead of spreading your resources over 100 products on the shelves, you should focus on building one star product. As the rule of eighty-two says, 20% products will bring in 80% revenue. These product selection metrics will help you find the most promising products on Amazon and create amazing sales results!
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# Cross-border E-commerce # Amazon Global Store # Taiwan Cross-border Sellers # E-commerce Entrepreneurs # Selection Guide # Product Strategy # Amazon Sellers # Cross-border Brands
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