How to Identify Profitable Products to Sell on Amazon?

TL;DR

• 90% of Amazon Australia sellers face challenges in identifying profitable products during their first year.

• Understanding Aussie customer behavior, including a preference for value and local products, is key to success.

• Amazon AU offers lower competition in certain categories compared to the US, presenting unique opportunities.

• Focus on product gaps, use Amazon's data tools, and leverage customer reviews to find high-demand, low-competition niches.

• Local sourcing offers advantages like reduced shipping costs and faster delivery, while importing from India or China can lower production costs.

• Be mindful of GST and customs duties, as they can significantly impact the landed cost of your products.

Did you know that 90% of Amazon Australia sellers struggle to identify profitable products in the first year? 

One of the biggest challenges is understanding the unique buying behavior of Aussie customers and navigating the nuances of local demand. While the US marketplace might be saturated with trends, Australia offers a different landscape where lower competition and specific buying habits present valuable opportunities.

This guide is designed to help you identify profitable Amazon product launches that align with the Australian market. By focusing on product gaps, using Amazon’s data tools, and leveraging customer reviews, you'll learn how to spot high-demand, low-competition niches that others overlook. 

We’ll also dive into the importance of local sourcing, GST considerations, and the strategic approach to scaling your business globally first with Amazon Australia and then to Amazon US.

Ready to find your next best-seller?

How to identify profitable products to sell on Amazon?

#1 Start with knowing your playing field

If you're selling on Amazon Australia, understanding the marketplace and the unique buying behavior of Aussie customers is crucial. Australia has a distinct shopping culture that differs from other markets, especially compared to the US. 

Here’s how to leverage these differences to identify profitable products for the Australian market.

Unique buying behavior of Aussie customers
Aussie consumers tend to be more price-conscious, preferring products that offer great value for money. They also show a preference for local products and services, especially those that align with 

Australian values like sustainability. 

Understanding these preferences can help you select products that resonate with local buyers, creating more engagement and increasing your chances of success. Keep an eye on seasonal trends as well, which might differ from the US market, as holidays and shopping habits can vary significantly.

With over 7 years of experience and managing more than 5,000 Amazon AU accounts, we help identify profitable products to sell on Amazon Australia by leveraging deep market insights and data-driven analysis. 

As Amazon experts in Sydney, we understand local buyer behavior, emerging trends, and competitive gaps that allow you to make informed product decisions with confidence. We analyze Australian customer trends to create detailed consumer personas.

This customer persona helps you understand your target audience, what they buy, what matters to them, and how they shop. By using this insight, you can identify profitable products that match actual market demand in Australia.  

So,  this data-driven approach reduces guesswork and helps you make confident product decisions.

With this example, you can better understand your audience and identify products that improve Amazon search optimization by aligning with customer demand and search behavior.

Lower competition, different demand trends

The beauty of selling on Amazon Australia is the lower competition in certain niches compared to Amazon US. While popular trends in the US may be flooded with sellers, Australia often offers different demand trends with fewer competitors. 

This gives new sellers the opportunity to introduce unique products and gain traction faster. Focus on finding products that solve specific problems for Australian customers or fill gaps left by existing listings, and you'll have a higher chance of success.

By understanding the Australian marketplace and its unique buyer behavior, you can make smarter, more profitable product choices.

#2 Look for gaps, not just trends

When it comes to choosing the right products to sell on Amazon, it's essential to go beyond popular trends and focus on uncovering profitable niches. Here are some practical strategies to help you identify the best products for your Amazon store.

Product gap analysis 

Rather than jumping on every trend that appears, focus on identifying gaps in the market. Research Amazon AU and explore categories where products are limited or not serving a particular need. A product gap is a clear opportunity to offer something that customers are searching for but aren't finding easily. 

This could be a unique variation, a product with better features, or simply one that offers a better user experience.

Use customer reviews, ratings, and “frequently bought together” as signals

Customer reviews and ratings are treasure troves of insight. Browse reviews of products in your potential niche to find out what customers like and dislike. Look for recurring complaints or unmet needs. Use this feedback to improve your own product offering. 

Additionally, the “frequently bought together” feature is a great tool to identify complementary products that could indicate a potential market demand. If customers are regularly purchasing similar items together, it's a sign that there's an opportunity to provide a related product.

Identify low-competition, high-demand niches

The key to success on Amazon lies in finding a niche with enough demand but little competition. Tools like Jungle Scout, Helium 10, or even the Amazon search bar can help you analyze the level of competition. 

If a product has high search volume but relatively few sellers or poor-quality listings, it could be an excellent opportunity to enter that market and stand out with a better product or more compelling listing.

By following these strategies, you can uncover profitable product opportunities and build a successful business when getting started on Amazon Australia. 

#3 Use Amazon's data tools to identify  product ideas

Best Sellers

Amazon Best Sellers is an invaluable resource for finding trending products. This page showcases the most popular products based on recent sales, updated every hour, giving you a real-time look at what’s performing well. 

Whether you’re interested in Beauty, Home, or Electronics, the Best Sellers page highlights products across a variety of categories, allowing you to explore which ones are currently in demand. You can also dive deeper into subcategories to discover more niche products gaining traction. 

A particularly useful feature is the list of frequently repurchased items, offering insight into everyday products with consistent, long-term demand. These products can be ideal for sellers looking for steady sales and repeat customers.

By leveraging Amazon’s Best Sellers data, you can spot trending items and gain inspiration to create your own profitable listings on the platform.

Keyword research

Keyword research is one of the most powerful ways to identify profitable product ideas on Amazon. Amazon's own data tools, like the search bar, are perfect for uncovering what people are searching for. 

Simply type in a broad keyword related to your niche, and Amazon will auto-suggest search terms based on popular queries. This can give you instant insight into what potential customers are interested in. This is the most effective Amazon keyword research strategy. 

\Additionally, third-party keyword tools like Helium 10 or Jungle Scout provide valuable metrics on search volume and competition levels. These tools allow you to gauge how many people are searching for specific products and how competitive those niches are.

What does that mean to you:

• Fewer results: Products with fewer search results might indicate lower competition, making it easier to stand out. While demand may be smaller, these products offer a great opportunity for niche sellers.

• More results: Products with more search results generally indicate higher competition. While it might be harder to rank highly, there could also be a larger audience and greater demand.

By combining Amazon’s search data and keyword tools, you can find product ideas with the right balance of demand and competition.

Competitive research

Amazon provides a wealth of data tools that can help you identify profitable product ideas. By leveraging these tools, you can easily track what customers are searching for and spot trending products. 

Tools like Amazon's Best Sellers, Product Opportunity Explorer, and Keyword Research can provide valuable insights into what’s in demand. They also help you assess market size and discover potential niches.

Competitive research

Wherever there is demand, there’s likely competition. If you’ve narrowed your choice down to one or two categories, it’s crucial to evaluate the existing competition. Look at the established sellers and analyze what makes their listings successful.

Understand their strengths, like pricing, product quality, or customer reviews. This insight can help you refine your product or find a gap where your offering can stand out.

Here, you can choose Amazon marketing services that are invaluable for deeper competition analysis. These services help you track competitors’ performance, uncover low-competition opportunities, and optimize your strategy for better results.

Movers and Shakers

Amazon’s data tools are invaluable for uncovering trending product ideas, and one of the best tools for this is the Movers and Shakers page. This feature showcases products with the most significant increase in sales within the past 24 hours, giving you a real-time snapshot of what’s gaining traction.

By exploring the Movers and Shakers page, you can spot emerging product patterns, seasonal trends, or items that are catching attention due to big events or pop culture moments. This tool is perfect for spotting hot opportunities before they become mainstream.

Additionally, take note of how successful sellers are optimizing their product pages and look at their titles, images, and descriptions. 

You can learn from their strategies to enhance your own listings, ensuring they stand out and attract the right audience. Leveraging Movers and Shakers is an excellent way to stay ahead of the competition.

#4 Avoid restricted, oversized, or low-margin products

If you started selling products on Amazon Australia, it's crucial to be strategic about the products you offer. Some product categories come with significant challenges or limitations that could hurt your business.  Avoiding these categories can help you focus on more profitable and efficient options.

Here are the common product categories to avoid in the AU market.

Australia’s market is smaller compared to other regions like the US, so it’s important to keep your product offerings straightforward. The fewer complications, the simpler the process, the better customer satisfaction, fewer returns, and higher ratings. 

When a product is easy to use, understand, and maintain, it builds a more loyal customer base and reduces the likelihood of returns, which ultimately helps your bottom line in a market with more limited potential.

By avoiding restricted, oversized, or low-margin products, you can focus on items that offer long-term profitability with less risk.

#5 Check local sourcing options or lightweight global shipping feasibility

When expanding your Amazon business, sourcing products locally or importing from global markets like India or China can have significant implications on your costs, logistics, and overall profitability. 

To make informed decisions, it's essential to evaluate local sourcing options and weigh them against the feasibility of importing lightweight products from international suppliers.

Sourcing from Australia vs. importing from India or China

Sourcing products locally in Australia offers advantages like shorter lead times, easier communication, and better control over quality. It also reduces the complexity of international shipping, customs, and tariffs. 

However, local sourcing might result in higher production costs compared to overseas markets. On the other hand, importing from countries like India or China allows for lower production costs, especially for high-volume products, and access to a wide range of manufacturers. 

But international shipping fees, longer delivery times, and customs procedures can increase your overall costs.

GST impact and customs considerations

When importing goods into Australia, the Goods and Services Tax (GST) plays a crucial role in pricing and compliance. GST is applied to most imported goods, and you will need to register for GST if your business turnover exceeds the threshold. 

Additionally, customs duties may apply depending on the nature of the product and its country of origin. These costs can significantly affect the final landed cost of your products, so it's important to factor them into your pricing strategy. 

Understanding GST implications and customs requirements helps prevent unexpected fees and ensures smoother operations.

Practical example:

Imagine you're importing a batch of kitchen appliances from China to Australia. The cost of the goods from your supplier is $2,000, and the customs duty for these appliances is 5%. This means you will pay $100 in customs duties. 

On top of that, GST is charged at 10% of the total value of the goods, including the customs duties. So, in this case, the GST would be 10% of $2,100 ($2,000 + $100), which is $210.

Therefore, the total landed cost of your goods will be $2,100 (product cost + customs duty) plus $210 (GST), giving you a final cost of $2,310 before considering other fees such as shipping and handling.

This example illustrates how customs duties and GST can add significant costs to the import process, which must be carefully considered when setting prices to ensure profitability.

Takeaways 

Identifying profitable products to sell on Amazon Australia requires a strategic approach that considers local market dynamics, competition, and consumer behavior. By leveraging Amazon’s data tools, exploring product gaps, and understanding local preferences, you can uncover high-demand, low-competition niches that offer significant growth potential. 

Additionally, evaluating sourcing options and factoring in GST and customs considerations will ensure a more streamlined and cost-effective operation.

If you’re located in Melbourne and looking to navigate the complexities of Amazon selling, our team of experienced Amazon consultants is here to help. We specialize in guiding businesses through product selection, sourcing strategies, and market entry to ensure your success. 

Reach out to us for personalized support tailored to your unique business needs.