10 Strategies for Generating New Amazon Product Ideas

Developing new Amazon product ideas has become far more challenging than it was in 2017. Gone are the days when you could simply source 1,000 units of a generic silicone phone case from Alibaba, add your logo, and rake in profits.

Now, Amazon is saturated with “me-too” products (items that closely imitate or replicate existing successful products), making it difficult to stand out in a crowded marketplace. Finding reliable, high-quality suppliers has become increasingly competitive, and a modest investment of a few thousand dollars no longer guarantees success.

Sellers now face the reality that without proper research and strategy, their product could get lost among countless similar offerings. If you’re planning to launch a new product, it’s more important than ever to approach it the right way.

In this guide, we’ll uncover the top strategies for generating new Amazon product ideas using data-driven research and customer feedback. This will help you identify product opportunities that fill unmet needs and position yourself for long-term success on Amazon.

The “Where Am I At” Checklist

Before you get into research on the best things to sell on Amazon, recognize where you stand and what kind of resources you have at your disposal. Here’s a checklist to make sure you have a good foundation.

Overall Budget for the Launch

Assessing your total budget is crucial for a successful product launch. For example, a new product launch can cost anywhere from $2,500 to $5,000 depending on the product category. Ensure your budget matches your launch goals to avoid cash flow issues.

This includes:

• Product development and design testing: Prototyping and refining your product idea.
• Sourcing and sample creation: Finding suppliers and ensuring product quality.
• Production costs: Manufacturing your product at scale.
• Creatives (photos, videos): High-quality images and videos are key for converting Amazon shoppers.
• Trademark registration: Protecting your brand is essential for long-term success.
• Video marketing and PPC: Plan for the first month of pay-per-click (PPC) advertising to boost visibility.‍
• External traffic: Allocating funds for marketing on social media or through influencers.

What Niches Do You Want to Stay Away From?

Identify niches you either want to avoid or stay within, depending on your existing product line.

• If you already have an Amazon store, decide whether your new product will suit your current niche or expand into a new one.
• Top-selling items on Amazon are highly competitive (like electronics or health supplements), so entering them may require a higher marketing budget and effort.

Sellers without a specific niche or brand identity may struggle in competitive niches. Amazon suggests avoiding overly saturated markets, where top players already dominate with established brands and massive PPC budgets.

What Kind of Timeline Are You Aiming For?

Your timeline can shape everything from Amazon product research to development to marketing strategy.

• Do you want to launch within weeks, or are you okay with a longer development process?
• Faster launches may require compromises on certain aspects like advanced product testing or extensive market research.

For many sellers, launching a private label product on Amazon typically takes 3-6 months from concept to market. If you’re aiming to be ready for a peak season like Prime Day, carefully map out production and shipping lead times.

Are You Hiring Any Service Providers?

Hiring service providers can free up your time but comes at a cost. Services such as branding, Amazon catalog management, PPC management, or product photography can be outsourced.

If you are new to certain aspects like Amazon Brand Registry setup, listing error troubleshooting, or product sourcing, hiring experts like SellerAssist by Carbon6 can help you avoid costly mistakes. 

It’s important to calculate these costs early on. More on that below.

What is Your Long-Term Goal?

Knowing your long-term goals will guide product selection and business strategies.

• Are you aiming to scale and eventually sell your Amazon business? Amazon aggregators may be interested in acquiring successful brands, for example.
• Do you want to build a brand recognized by households, requiring ongoing product development, branding, and customer engagement?
• Or, are you testing the market, focusing on short-term profitability with lower-risk products?

If your goal is to sell your business, focus on scalable, evergreen products in a profitable niche. Amazon businesses are currently selling at 2-4x their yearly profit, meaning long-term planning can lead to a substantial exit.

After you’ve distinguished your starting goals, you can get to Amazon product research. These details will allow you to narrow down your search and help you avoid falling in love with opportunities you can’t financially handle.

Let’s do a little bit of math.

Narrowing down your research is understanding how much you want to make. Of course, this has to make sense with your budget.

Let’s say you’d like to make $100,000 a year on one product. A decent ratio is normally:

• 1/3 of retail price = Cost of Goods Sold (COGS)
• 1/3 of retail price = PPC, Amazon referral fee, FBA fee
• 1/3 of retail price = Profit
• So, $100,000/year = $8,333/month

This means you would need to sell 100 units at $83 per month to achieve that. Alternatively, you could sell 50 units at $167 per month or 200 units at $42 per month.This is the part that you decide for yourself based on your budget because products at price points like $83 and $167 will logically cost more in production.

Now that you have decided…

• How much you want to make a year/per month
• How many units you want to sell
• How much you’re willing to spend

It’s time to look for an opportunity that fits those parameters.

Next, find 1 to 2 US-based sellers that have the revenue you’re looking for and don’t have a high amount of reviews.

It is advisable to choose a US-based seller, as this indicates that their COGS is likely higher than that of a seller based in China. Opting for a seller with a limited number of reviews is also crucial for managing expectations, particularly since the maximum number of reviews a new seller can accumulate at launch is currently capped at 30 Vine reviews. As the product gains traction, you can anticipate an increase in reviews over time.

How to Develop New Amazon Product Ideas

1. Start Brainstorming Product Ideas

If you are a seasoned seller, you may already have an idea about what to sell on Amazon, but if you don’t, here’s a free tool you can save for later to get the juices flowing: AmazonProductScout GPT.

Designed by Izabella Ritz, this chatbot helps sellers find new Amazon product ideas to further validate by considering your personal preferences and financial parameters. It functions based on real Amazon data and is updated every single month.

For instance, when doing market research, you may request GPT to provide a list of the most profitable items to sell on Amazon in 2024. Or when doing competitor analysis, you may ask for insights on successful sellers in a particular niche like “Who are the top sellers in the home and kitchen category on Amazon?”

Take it a step further by requesting guidance on how to analyze customer reviews to identify pain points and opportunities. For example, “How can I analyze reviews to find gaps in the market for kitchen gadgets?”

Engaging with AmazonProductScout GPT using these strategies can help you gather valuable insights and information to identify the best products to sell on Amazon.

This approach combines market research, competitor analysis, product differentiation, and marketing strategies, empowering you to make informed decisions in your selling journey.

2. Determine Amazon Product-Market Fit

Amazon product-market fit refers to the alignment between a product and the specific needs, preferences, and demands of Amazon customers. It means that a product successfully meets the expectations of its target audience on Amazon, leading to strong sales, positive customer feedback, and sustainable growth. 

Achieving product-market fit on Amazon typically involves understanding market trends, analyzing competitor performance, and using customer reviews and data to refine product features, pricing, and marketing strategies.

So, before you fall in love with an idea, check for these red flags.

• Saturated Market: The market is saturated with numerous options, and it is dominated by large players, making it difficult for new entrants to compete effectively.
• Me-Too Sellers: There are many “me-too” sellers, leaving little room for differentiation except in aspects such as color, size, or quantity.
• Consumers’ Main Buying Motivation is Low Price: This means people are generally unwilling to pay significantly more than the average price range established in the market.
• Low-Profit Margins: Low-profit margins typically accompany saturated markets filled with me-too products, making it much easier to sell fewer units of high-end items than to move a high volume of low-end products.
• Seasonal Demand: While seasonal demand can offer strategic opportunities for experienced sellers, it is generally safer to focus on evergreen products due to the reduced risk involved.
• May Need to Obtain Certifications or Brand Approvals: Some product categories require certifications (authenticity certificate or product safety) or brand approvals (aka ungating a restricted product category). While some sellers are willing to handle this responsibility, inexperienced sellers should avoid entering niches that demand more than one certification or additional restrictions.‍
• Limited Target Audience/Low Demand: A limited target audience can lead to sales. However, catering to a small number of potential customers sets a low ceiling for sales volume, and playing it too safe can hinder growth.‍
• Too Many Existing Patents: Although design patents are relatively easy to navigate by avoiding similar appearances, numerous utility patents may necessitate consulting with patent attorneys to ascertain what products can be sold legally.
• ‍Complicated Manufacturing or Assembly: Products that involve complicated manufacturing or assembly processes tend to have higher return rates and more negative reviews, often due to missing parts. Although these issues may not be the seller's fault, they still bear the responsibility, which can negatively impact profit margins due to added logistical challenges.

Some of the red flags should be viewed as potential opportunities rather than definitive deal-breakers. By approaching these challenges with a proactive mindset, you can identify ways to innovate and improve the product.

For instance, if a product requires complex assembly, consider exploring solutions that simplify the process, thereby addressing a pain point that has yet to be resolved in the market.

3. Leverage Top Amazon Seller Tools for Greater Efficiency

Now that you’ve sorted out the bad apples, it’s time to use the most advanced tools for sellers available.

While you can use just one, like Helium 10 for example, it’s best to use more so you can see the bigger picture. For example, SellerTools will show you something H10 can’t, which is the search conversion rate.

What Is Search Conversion Rate?

Search Conversion Rate is a key performance metric that measures the percentage of visitors who make a purchase after entering a specific search query on an ecommerce platform or website.

It is calculated by dividing the number of conversions (sales) by the total number of visitors who searched for a product, then multiplying by 100 to get a percentage.

A higher search conversion rate indicates that the site effectively matches users’ search intent with relevant products, enhancing user experience and driving sales.

Let’s your product received 1,000 views from search results and you made 50 sales, the calculation would be:

This means that 5% of the people who viewed the product listing ended up making a purchase, indicating the effectiveness of your product presentation and marketing strategies.

4. Validate Your New Amazon Product Ideas

Once you have a few new Amazon product ideas on the roster, validate further.

• Check how this product and niche performs over the course of a year.
• Go through positive and negative reviews. To help with this, you can pull consumer insights using a tool like VOC.AI or use AMZ Alert to get notified when you receive a negative review.
• Identify the market gap. What is truly lacking that, if addressed, would give you a significant advantage over the competition?
• Take a look at the keyword opportunity. Are current sellers leveraging it to its fullest potential?
• Check if you can visually showcase the benefits of your product on your hero image without violating Amazon’s Terms of Service. This is crucial, as consumers will need to be drawn to your image before they can view your listing.
• Analyze whether the improvements that customers are seeking will be affordable to produce and if they will enable you to justify a higher retail price.
• Review your competitors' daily and monthly PPC spending to understand their revenue generation. This analysis will help you determine whether your budget is prepared for similar or increased expenditures.
• Examine how many new products have been launched in the past 180 and 360 days. Generally, a lower number of launches indicates less competition.
• In addition to examining negative reviews, be sure to check return insights. This will reveal opportunities for you to enhance the consumer experience. Also, consider using Seller Investigators, which specializes in Amazon FBA reimbursements, to help you identify discrepancies and recover lost funds, further improving your profitability.
• Once you have identified a solid product opportunity, obtain quotes from suppliers for the most relevant product to ensure accurate profit margin calculations.

5. Designing Your Product

When all numbers check out, it’s time to start designing with a designer whose expertise lies specifically in product design. 

Before you commit to a big design project, ask the designer for their portfolio and if they’re willing to do a test job so you can better assess their skillset. This will shed a lot of light on what it will be like to work with them and the quality they’ll give you.  

If their skillset is up to par, their work for you can only be as good as the task you give them. This means you must be specific with the features that should be included in the product design and the standards that must be followed. Share examples, reasoning, and be as organized as possible.

Consider using GPTs to ask for advice on what unique features or benefits could make a product stand out. For example, “What innovative features can I add to kitchen storage containers to make them more appealing?”

Because you’ll be testing your product design against another competitor, it’s important that the design they make for you looks photorealistic. This will provide you with the most valid consumer feedback as designs that look animated or photoshopped tend to get more negative feedback despite having better features.

Spoiler alert, you will most likely end up creating numerous design versions and that’s okay. It’s important to keep your emotions out of the process and make design revisions strictly based on research data and consumer feedback.

If you add an uncommon or innovative feature, make sure to check how much it raises your COGS before you do any more testing in case it significantly decreases your margins.

6. Test Your Product Design

Conducting a product design test for Amazon products involves several key steps to ensure the product meets market needs, consumer preferences, and Amazon’s guidelines. 

Here are some tips to make sure you get the most out of this step.

• Define Objectives: Determine what you want to achieve with the product design test. Are you testing usability, aesthetics, functionality, or all three?‍
• Select Your Target Audience: Identify the ideal customers for your product based on age, gender, interests, and purchasing behavior. Consider recruiting participants who match your target audience for the testing phase. 
• ‍Create Prototypes Develop visual representations of your product using design software (e.g., Sketch, Figma, Adobe XD). If applicable, create 3D models or physical prototypes to provide a tangible experience.
  Start with low-fidelity designs (simplified, preliminary versions of a product) to gather initial feedback before creating high-fidelity prototypes (detailed and polished representations of a product).
• ‍Conduct Usability Testing: Develop specific tasks that users need to complete using the product. This helps evaluate how intuitive and functional the design is. Watch participants as they interact with the product, noting any challenges or confusion they encounter.
  Ask unbiased questions. Do not prime your audience. As tempting as it is to sway them to vote for you. After testing, collect qualitative and quantitative feedback through surveys or interviews to understand user perceptions.

7. Analyze Design Test Results

Evaluate the feedback to identify common themes, pain points, and preferences. Measure results against the success criteria you established earlier. For instance, if usability is a focus, look for high completion rates on tasks.

Once you have a winning design, test it against the most relevant competitor. Don’t compare it with a weak or objectively bad competitor just to skew results. The goal is that you can guarantee that people will choose your product against the main competitor before you spend a dime on inventory. You don’t want to gamble your entire investment right?

8. Refine Design

Based on feedback, make necessary adjustments to the product design. This may involve changing features, improving aesthetics, or enhancing usability. Then, conduct additional rounds of testing with updated prototypes to ensure improvements meet user expectations.

9. Prepare for Amazon Listing

Ensure your design meets Amazon’s product guidelines, including safety standards and image requirements. Create high-quality images that highlight your product’s features and benefits, ensuring they attract potential customers.

10. Launch and Monitor

Once satisfied with the product design and compliance, launch the product on Amazon. After launching, continue to collect reviews and feedback from customers to identify any additional areas for improvement.