How to Validate Amazon Product Ideas Before Placing an Order with a Supplier?

TL;DR

• 95% of new Amazon sellers fail in their first year due to poor product selection; validating your product ideas can minimize risks.

• Use Amazon AU’s Best Sellers, Movers & Shakers, and Google Trends to gauge local demand and identify trending products.

• Focus on Australian-specific search terms using tools like Helium 10 and Jungle Scout to understand local buyer interest.

• Study competitors by analyzing product listings, reviews, and top products to spot gaps in the market.

• Consider local compliance, import restrictions, and logistics, including shipping speed and costs when planning your strategy.

Did you know that 95% of new Amazon sellers fail within their first year? 

One of the key reasons behind this high failure rate is poor product selection. As an Amazon AU seller, skipping the critical step of product validation before committing to a supplier can lead to costly mistakes, dead inventory, wasted capital, and even lost reputation.

We manage over 5,000 accounts in Australia, so we understand the challenges that local sellers face. Validating your product ideas is essential to minimize these risks and ensure your products align with market demand, while effective Amazon advertising Australia strategies help maximize visibility and drive sales in the right categories.

This blog discusses the proven strategies for validating your next product idea. Whether it’s using Amazon’s Best Sellers or conducting in-depth keyword research, these steps will help you confidently validate your product ideas before taking the leap with your supplier.

How to validate Amazon product ideas before placing an order

#1 Understand the local demand in Australia

When it comes to an Amazon product launch in Australia, understanding local demand is key. Without this insight, you risk investing in products that may not resonate with Australian buyers.

Here are some actionable strategies to help you identify what Australians are actively searching for.

Use Amazon AU Best Sellers and Movers & Shakers

• Start by looking at Amazon’s Best Sellers and Movers & Shakers pages. These lists show the top-performing products across various categories and give you a quick snapshot of what’s currently trending in the Australian market. 

• This is a great starting point to spot popular niches and validate if your product ideas align with current demand.

Use Google Trends for Australia-specific keyword interest

• Google Trends is a powerful tool to gauge the level of interest in specific keywords over time. Focus on the Australian region to see if the products or keywords you're interested in are trending locally. 

This can help you understand seasonal spikes in interest, which is crucial for planning inventory and marketing strategies. Additionally, using Google Trends allows you to compare multiple search terms to find the most promising one for your Amazon listings.

Look into marketplace-specific buyer behavior

• Understanding the unique characteristics of the Australian market is crucial for new sellers. Australia has a smaller population, which means competition can be different compared to larger markets like the U.S.

• Australians may have different buying habits during holidays like Christmas, Easter, and other local festivities. By analyzing local buying patterns, you can tailor your products and marketing to match the times when Aussies are most likely to shop.

Use Product Opportunity Explorer for deeper insights

• For Amazon AU sellers, the Product Opportunity Explorer is an invaluable tool. It allows you to explore product categories and see demand metrics specific to Amazon Australia.

• This tool provides detailed insights on search volume, competition, and potential profitability, helping you identify which product ideas are most likely to succeed. By leveraging this data, you can make informed decisions and reduce the risk of investing in products with low demand.

By implementing these strategies, you’ll better understand local demand, allowing you to make data-driven decisions that increase your chances of success on Amazon Australia.

#2 Conduct keyword and search volume research

Successfully selling products on Amazon Australia, understanding keyword demand is essential. Keyword research helps you gauge local interest, competition, and potential sales, allowing you to avoid the pitfalls of low demand or oversaturated markets. 

Here are some strategies to conduct effective keyword and search volume research for Amazon AU sellers.

Use tools like Helium 10, Jungle Scout, or Amazon's Brand Analytics

• These tools are invaluable for understanding what products and keywords are trending on Amazon Australia. Helium 10 and Jungle Scout offer powerful features that allow you to track search volume, analyze competitor keywords, and identify profitable product opportunities. 

• Amazon's Brand Analytics (if available) provides in-depth data on top-performing keywords in your category. These tools help you understand what customers are searching for, so you can tailor your product listings accordingly.

Focus on AU-specific search terms, not US data

• While it might be tempting to rely on global data, it’s crucial to focus on Australia-specific search terms. The Australian market has unique preferences and shopping behaviors compared to larger markets like the U.S. 

• Using U.S. data may lead you to overlook local trends, resulting in misguided product offerings. Always prioritize tools and data tailored to Amazon Australia to get the most relevant and accurate insights.

In the Australian market, a “healthy” monthly search volume for a keyword generally ranges between 500 and 1,000 searches per month. This indicates consistent demand without overwhelming competition. 

For broader categories, look for keywords with higher volumes but manageable competition. A balanced approach ensures you're not entering a saturated market, but also not investing in a product with minimal visibility.

An ideal product would have a BSR under 50,000 in its category. For kitchen gadgets, a BSR under 10,000 indicates high demand. Products with a BSR below 50,000 can still perform well and show consistent sales potential.

You can easily understand this by looking at the following ideal starting scenario example.

With these key metrics, you’re entering a market with healthy demand and manageable competition. By optimizing listings, running targeted ads, and focusing on customer satisfaction, you’ll increase your chances of achieving consistent sales in the Amazon Australia marketplace.

#3 Study the competition on Amazon Australia

Understanding your competition is one of the most important steps in launching a product in Australia for your Amazon search optimization. Here’s how to study your competition effectively

Sellers are offering similar products

• Before launching your product, check how many competitors are offering similar items on Amazon Australia. If the category is highly saturated, you may face challenges standing out. 

• Look for a balanced level of competition enough to indicate demand, but not so much that it’s hard to gain visibility. Tools like Helium 10 or Jungle Scout can help you assess how many competitors are in your space and how competitive the prices are.

Top product click share

• Look for the top-performing products in your category and study their click share. These products are getting the most attention from buyers, so it's crucial to understand what makes them popular. 

• Check their pricing, keywords, and listings to learn what works. By understanding what grabs buyer attention, you can refine your own product offering to better compete.

Are there local brands dominating the niche?

• Many Australian markets have local brands that dominate due to consumer preference for homegrown products. 

• If local brands are taking up most of the shelf space in your niche, you may need to differentiate your product with unique features or better pricing. Find out what sets them apart and look for gaps you can fill.

 Identify weak listings

• Weak listings offer a significant opportunity for new sellers. Look for listings with poor photos, bad reviews, or low review counts; these are often signs of underperforming products. 

• If you come across such listings, consider how you can offer a better solution. Use high-quality photos, work on building positive reviews, and address customer complaints in your product offering to provide a better alternative with Amazon listing optimization. 

By studying the competition in detail, you can find a market gap and tailor your product, pricing, and listings to meet Australian customers’ needs. This will help you carve out a place for your product and maximize your chances of success on Amazon Australia.

#4 Analyze pricing and margin potential

When considering selling on Amazon Australia, it’s crucial to analyze your pricing strategy and margin potential to ensure profitability. Here’s how to do it effectively:

Find landed cost vs. average selling price

• Start by calculating your landed cost, which includes the cost of the product, shipping, customs, and any other fees incurred to get the product to Australian shores. 

• Once you have this figure, compare it to the average selling price (ASP) of similar products on Amazon AU. This helps you understand if your pricing aligns with market trends while allowing for sufficient margin.

Factor in Amazon fees

• Amazon charges various fees, including referral fees, FBA fees, and others, depending on your selling method. Make sure to factor these fees into your cost structure. 

• These fees can eat into your profits, so understanding them is essential to setting the right price for your product.

Account for GST and Shipping to AU Warehouses

• In Australia, Goods and Services Tax (GST) applies to products sold over a certain value. Ensure you include this in your calculations. 

• Additionally, consider the shipping costs to Amazon’s AU warehouses, whether using FBA or a third-party logistics provider.  These costs add up quickly, so they need to be accurately estimated.

To remain profitable, aim for a margin of at least 30% after accounting for all costs, including fees, shipping, and taxes. This ensures you have enough cushion to cover unforeseen expenses and still make a profit. Here, you can choose an Amazon account management agency in Australia that manages your account and resolves the issues. 

#5 Validate customer pain points through reviews

When launching a new product on Amazon Australia, understanding customer pain points is crucial for success. One of the best ways to do this is by diving deep into competitor reviews on Amazon AU. Here’s how to use reviews to fine-tune your product and better meet customer needs:

Analyze competitor reviews

• Start by examining reviews of similar products in your niche. Look at both the positive and negative feedback to get a full picture of customer experiences. 

• Pay particular attention to the issues that arise frequently in the lower-rated reviews. This can help you pinpoint areas where your competitors are lacking.

Look for repeated complaints and unmet needs

• Focus on repeated complaints. If customers consistently mention a specific issue with the product, it’s a clear signal that there’s a gap in the market. 

• Whether it's a design flaw, poor quality, or lack of a particular feature, these recurring problems represent an opportunity for you to improve. Similarly, if there are unmet needs, such as features or benefits customers are asking for, take note of them.

Diving into the customer review insights and returns tabs is key to understanding customer needs and improving your product. Here's how to approach it:

Ask Yourself:

• Can I improve product materials to prevent breakage?

• Is there a way to reinforce the design to enhance longevity?

• Can I make minor adjustments to ensure durability without increasing costs significantly?

You can also explore feature requests  like “wish it had a lid” or “needs better ergonomics.” Customers often provide clear insights into what would make their experience better.

Ask Yourself:

• Can I add a simple feature (like a lid) to solve this?

• Would an add-on or a bundle make sense to meet this demand?

• Could I introduce a new version of the product with these improvements?

Examine  the return reasons such as  “wrong size” or “poor packaging.” Understanding why customers return products helps identify potential areas for improvement in product presentation or sizing.

Ask Yourself:

• Can I improve the packaging to avoid damage during shipping?

• Is there a way to provide clearer size guides or improve product descriptions?

• Can I offer an easy way to personalize or adjust the product for different needs?

By using this feedback-driven approach, even small changes in materials, packaging, or design can significantly boost your conversion rates and customer satisfaction.

#6 Consider local compliance and logistics

When selling on Amazon Australia, it’s essential to factor in local compliance and logistics to ensure smooth operations and avoid costly mistakes. Here’s how to navigate these key aspects:

Local import restrictions and safety certifications

• Before importing products into Australia, check if there are any import restrictions on the items you’re selling. 

• Certain products, especially electronics or chemicals, may require safety certifications or be subject to customs regulations. Additionally, labelling requirements are crucial.

Fulfillment speed and costs within Australia

• Australia's vast geography means that shipping times and costs can differ significantly depending on where your customers are located. 

• For example, a customer in Sydney might receive their order in 1-2 days, while a customer in Perth may experience a 5-7 day shipping time due to the long distance between the two cities. This discrepancy can impact your customer satisfaction, especially if you are targeting a national audience.

• When planning your logistics, you need to carefully balance cost and speed. If you’re using Amazon’s FBA (Fulfilled by Amazon) service, it can simplify things by storing your inventory in Amazon’s warehouses across Australia. However, it’s important to factor in storage and shipping fees.

A practical example:

If you are selling a dish drying rack, which is compact and lightweight, FBA would likely be a cost-effective solution. You would benefit from fast delivery times and low shipping costs, with the added advantage of being eligible for Prime shipping. 

However, if you sell larger items like stand mixers or furniture, the fulfillment costs might be higher. In such cases, you might want to consider working with a third-party logistics (3PL) provider who can store and ship the products more efficiently. 

For example, a 3PL provider could store your stand mixers in local warehouses in major cities like Sydney and Melbourne, allowing for faster delivery to customers while reducing overall shipping costs.

Ultimately, by understanding the unique needs of your products and using a mix of Amazon FBA and 3PL services, you can strike the right balance between cost-efficiency and successfully getting started with Amazon FBA in Australia.

Offering Prime shipping can be a major selling point, as Australian customers value fast and reliable delivery. To qualify for Prime, you’ll need to have your products stored in Amazon’s local fulfillment centers. 

Alternatively, consider setting up your own local warehousing if you anticipate high order volumes and want more control over stock management. This can help you offer competitive delivery speeds while keeping shipping costs low.

Ready to take the next step?

Validating your product ideas before placing an order with a supplier is a game-changer for your success on Amazon Australia. By understanding local demand, diving deep into keyword research, and analyzing competitor reviews, you’re setting yourself up for a smarter, more profitable launch.

Don’t forget to factor in local compliance, fulfillment speed, and logistics; these are key to keeping your operations running smoothly.

With 7 years of experience, we help Amazon AU sellers like you tackle these challenges head-on. Our Amazon agency Australia team is dedicated to guiding you through every step, ensuring your product ideas turn into a thriving, competitive business.