The Million Dollar Case Study: Session #2 Recap: Advanced Product Research

Gen FurukawaProduct Research, The Million Dollar Case Study35 Comments

Can you tell me a product idea that has great demand, low competition, and will offer solid profit margins to sell about, oh, a million dollars in revenue? That's been the riddle that we've been addressing in Jungle Scout's Million Dollar Case Study for the past week.

And as of now, we have solved the challenge (maybe). We now have a solid product idea for our journey to a million dollars!

And the winning product is…

baby hooded towels or magnetic tiles envelope gate

 

So we don't necessarily have one idea, but two at the moment. It's kinda like the Oscars “Envelopegate” debacle of this year, you definitely have to see how it happened.

So here it is, the full replay of our second product research session where we actually chose the product:

 

And here are the accompanying slides:

 

Additional Product Research Methods

Greg started the session with a review of the product research criteria and the process we followed in Session 1. We also explored a few additional product research methods that we touched on in Session 1.

Here are a few of the strategies, and how to utilize them.

 

Strategy #1: That Crappy Product Sells Like Hotcakes?!

The strategy here is to find products that sell really well, despite a very poor rating. So the logic is that there are hordes of customers looking for the product, yet can’t find any decent alternatives and settle for a poorly-reviewed product.


If we can identify what that product is, get it manufactured to better specifications, we would be able to capitalize on that demand and sell successfully. Ideally the product is relatively simple to manufacture and improve upon.

One product idea that came about with this method is some plastic food cell phone ornaments. It looks like this:


Strategy #2: The New Beast On the Block

This strategy looks at new listings that are hitting some monstrous sales figures, despite a poor listing and relatively few reviews. Ultimately, for us this means that there is a lot of existing demand and an existing market, and we can rank quickly for the main keywords and also improve on the product listing to get more sales.

The Product Database filter looks like this:

 


2000 units per month is almost 70 units per day. That is a lot! If we found at $25 product that moves around 70 units per day, that would be more than a $50k/month product. What types of products are these?

One additional criteria that we included in this filter is putting a maximum Listing Quality Score (LQS) of 40. The LQS is Jungle Scout’s proprietary system that evaluates and scores a product listing based on the Product Title, Description, Product Images, Keywords, and more. It is a scale of 0-100, so products with a LQS below 40 leave a lot of room for improvement.

After we ran the filter, the results included a lot of water filters, nutritional supplements, a carbon knife, and some magnetic tiles. Magnetic tiles… interesting! They look something like this:

 

And here is the Jungle Scout data when we pull up the top results for the keyword “magnetic plastic tiles”:

 


Here's Greg’s initial analysis of the data:

  • There is good overall demand, judging by the Estimated Sales column of the top 10 sellers
  • Good price point—products ranging from $24 up to $70. People look like they are willing to spend money to purchase this product
  • There are some top sellers with less than 50 reviews – in fact, there are 6 sellers in the top 10 with less than 50 reviews

And pulling up the Google Trends data from within the Extension we can see some interesting patterns:

 

 

Overall, it looks like there is increasing popularity based on this Google Trends data. There has been marked year over year growth for the past five years. There is also some seasonality, with spikes in demand during the winter holiday season. Not ideal, but not a deal-breaker, especially not with an impressive growth trend like this.

This is a good product—solid demand, low competition, overall growing popularity, and a standard sized product (hence easier inventory management once at Amazon's warehouses).

 

Strategy #3: Gimme Your Lunch Money (aka Spy On Private Label Sellers)

The last new research strategy that Greg laid out shows how to leverage the success of other private label sellers to drum up new product ideas.

The strategy is simply examining the storefront of private label sellers with numerous products, identify their top-selling products, and see if it can be replicated or improved upon.

How do you find private label sellers? Easy, you can identify private label sellers in the Jungle Scout Web App by filtering for only products that have a one seller:

 


Alternatively, you can search for a popular private label product, for example yoga mats:

Using that method, we discover that this seller is a top ranked product for yoga mat:

If we click through on the product, you can look at the “Sold By” link, and go to their storefront to see all of the products that they sell:

 

 

Looking through the catalog of Super Deal's products sold, we can sort all of the products by estimated sales in descending order, so we can easily identify which the best selling products are. Himalayan Salt Lamp comes up…

 

 

Clicking through on the product, we get a better idea of what this product is:

 

At this point, we are still not exactly sure what the target market is for these lamps. But there is certainly a lot of demand, and a good price point. However, it is very competitive and in the end, it seems to be tough to rank on first page.

Can we “niche down” and position for a particular type of Himalayan salt lamp? Let’s look at the other main keywords to see what is possible. Himalayan Salt night lamp, USB plug, Salt Lamp with chunks…

Looking at this “Himalayan salt lamp with chunks”, we see that there is a lot less competition, yet still some decent demand.

 

One issue looking at this is what Greg refers to as “depth of market”. In other words, are the sales evenly distributed across sellers, or are most of the sales concentrated with just a few sellers? It does look a bit concentrated at the top, but good enough to add this product to the list of potential product ideas.

By this point, we had a list of potential product ideas, with some of these notes jotted down. Greg’s spreadsheet can be found here.

Now that we have some ideas, let’s review everything holistically…

 

Note: for the purposes of this case study, we only had four decent ideas to review. Ideally, this phase of product research would generate some 20 to 50 products, and therefore have a lot more possibilities to evaluate.

 

Review All of the Ideas!

Now that we have a solid list of ideas, Greg wanted to take another look at the ideas with a fresh pair of eyes and re-evaluate the data.

Questions that we’d address:

  • What are the concerns that existing customers have with the product?
  • How can we position ourselves selling this product?
  • What do the existing reviews, both good and bad, have to say about the product?
  • What manufacturing requests would we make to our supplier?

And here are the comments for each product:

 

Tactical belt

A bit competitive with a lot of sellers, despite the good demand. Some of the products are priced too low at $15 or so, so our profit margins would also be lower than ideal. There may be some liability issues depending on how the belt is used (for example, we wouldn’t want this belt to be used as a safety belt to keep people inside a helicopter!).

 

Hooded Baby Towels

There is opportunity with this product. There is a lot of demand, while not being super competitive. We could also offer a differentiated product by creating and marketing a high-end product.

Therefore, we could sell it at a higher price point, maybe $25 per product. Some of the bad reviews comment on quality control issues, with loose threads, low-quality cloth, holes in the towels, and more.

 

Magnetic Plastic Tiles

This product is promising. The top selling products for “magnetic plastic blocks” have a good price point, solid demand and there are some sellers in the top ten with less than 50 reviews. Additionally, there are some products that aren’t directly related to “magnetic blocks” that appear in the top 10, which indicates that we could also rank well with an optimized listing.

One challenge here is that there are solid reviews for the existing products, so it may be harder for us to offer an improved product. Possibly stronger magnets, as a few reviews noted weak magnets that didn’t hold the blocks together.

 

Himalayan Salt Lamp

This is a more competitive niche, and lots of the sales are concentrated in the top seller. What is the cause for this? It will require more research to get an answer to this.

However, it may be too competitive of a niche with fewer ways to differentiate our product, so ultimately this is not a product to pursue further.

 

Further Research Until Next Week

Until our next session, we will do further research on customer reviews of both magnetic tiles and baby hooded towels. We will also dig in to the actual sales data of these products using Jungle Scout’s Product Tracker.

In a quick review of the Product Tracker data for baby hooded towels, we see that there is consistent demand in the past 30 days. There doesn’t appear to be any promotions or giveaways that are artificially spiking the Best Seller Rank and estimated monthly sales.

Here is a look at some of that Product Tracker data for baby hooded towels:

 

 

And the data for another brand of bamboo baby hooded towels:

 

This data reinforces that this may be a good product to sell!

Additionally, we will need to verify that there are no patents that would create issues with us selling the product. We did some quick Google searches on the webinar, but patent research certainly merits thorough evaluation.

 

Next Steps

Well glad you made it this far in the recap! Now you know the exact strategy and process that we used to generate these ideas and narrow down to just these two products.

Magnetic Tiles or Baby Hooded Towels? Which product do you think has the potential to carry us on this million dollar journey?

Drop your thoughts and rationale in the comments section below!

Enjoy this session? Next up in Session #3 we take a look at sourcing and how to find reliable suppliers. This session was originally held on Wednesday March 8th, with sourcing expert Gary Huang, of 80/20 Sourcing. Gary is a wealth of knowledge in product sourcing from China, so his advice will be invaluable in actually getting supplier quotes and a rough idea of what our cost of goods will be. If you missed the next session or need to catch up, head here to find a full recap, replay and slides!

Until next time friends!

Gen Furukawa
Let's Chat

Gen Furukawa

Marketing at Jungle Scout
If dreams came true, Gen would be playing alongside Steph Curry in the NBA. He's living the best possible alternative, in San Francisco helping others use Jungle Scout to build profitable businesses.
Gen Furukawa
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35 Comments on “The Million Dollar Case Study: Session #2 Recap: Advanced Product Research”

  1. Awesome write up! Thank you JScout for the excellent content. Question: if you find a product selling like hot cakes amongst a few vendors, minimal reviews, not such polished listings and also launched around the beginning of the year- would this be good potential or should you be tracking it for an extended amount of time. The trend is really taking off now.

    1. Hey Casey, thanks, glad that you found it helpful!

      Regarding your question, of course hard to give a detailed analysis without specifics, but it would help to probably get some idea of the niche for at least a few days before acting on it, but sounds like a ripe opportunity!

  2. If you decide to sell magnetic tiles, treat suggestions about stronger magnets with caution. Whatever you do, don’t use “world’s strongest magnets” as a USP. They belong to a class of magnets based on Neodymium. Adults would have a hard time separating two of these and children would never move them! You may as well weld the tiles together!
    It’s a pity time ran out before you were able to find a few more promising products. Why not spend another session on research?
    As Casey said, the re-cap write-up is awesome. Very comprehensive, beautifully organised & presented. I look forward to every session. Thank you for sharing such great content.

    1. Hi Peter, thanks for your suggestion about the magnets! I don’t know anything about the science or classification of magnets, but you make a great point that there is a fine line between strong magnets and unhelpfully strong.

      Looking forward to sharing the next sessions as we decide on the product!

    1. Hey Danny,

      No, unfortunately we will not be offering any coupons or discount for JS. Thanks.

      Gen

  3. Amazing work done in seminar and nice notes putted up which helps a lot to pick ideas.
    Thanks for this case study to find how best of ideas to use.
    eagerly waiting for next session.
    my vote for baby hooded towels as long as we get it a good quality one, as recommended by reviews.

    1. Hey Saurabh, thanks for your vote and glad that it helped! Definitely tune in next Wed to see the next steps of finding a supplier!

      Gen

  4. Magnets by far would be better than baby towels. Far less liability since baby products are under such a watchful eye understandably. Also, less potential for defects, easier, lighter and smaller to ship and different ways to make them truly better and unique with new designs, packaging, etc.

    Just my 2 cents but I have known someone in the baby space who was doing well but got hit left and right for safety issues after one person complained to Amazon. Its not fun to get a good seller taken down after so much work… plus the fear of any legal issues freaks me out! 🙂

    1. Your 2 cents is much appreciated, thanks for sharing your thoughts Jacob. No one likes legal issues, something to bear in mind for sure.
      Hope you can join us on Wednesday for the next webinar!

      Cheers,
      Kym @ Jungle Scout

  5. This webinar is awesome. Great tips! I would like to know when are you going to send # 3 link since I missed it yesterday. Thank you!

    1. Hi Nathaly,

      Glad that you enjoyed the webinar. You can see Session #3 on Product Sourcing on our youtube channel now, or catch the full writeup on our blog by tomorrow!

      Gen

  6. I looked into the toy category and baby category but decided not to launch a product there due to U.S. laws regarding consumer safety. I believe toys need to be 3rd party tested for safety and any article of clothing touching young children needs to have safety certifications.

    Are you worried about that?

    1. Hey Terry. I’m not worried about it but certainly something I will do if required. It’s just a cost of doing business and at the end of the day, not a big deal or cost.

  7. thanks a lot for the webinar
    During the explanation you showed that there is a product with 200 est. sales
    But only 2 reviews
    How can it be ???
    Thanks in advance
    erez

    1. That is fairly common – the product was probably just launched within the past few weeks so doesn’t have many reviews yet.

  8. Hi Greg,

    Thanks for going through step by step.
    How to avoid patent issue at all cost? My products just get hit right bottom and stuck with almost 500 units.

    Thanks in advance
    Cena

    1. Yep, we read through them and talk about it in more depth in another webinar. We plan on fully adhering to all guidelines and regulations surrounding the niche 🙂

      1. I’ve never heard anyone really address the issue, it’s great that you did/will! Where can we find the webinar so we can watch? I’d really love to see you talk about it!

        I’ve been a fan of yours since hearing you talk on The Amazing Seller a year ago! Thanks for all the great info and help you give:)

  9. Hello,

    Thanks for your valuable content.

    For one product I looked for, JS web app (niche hunter) revealed based on my input an excellent demand, low competition, and Listing quality – poor. So far so good. A lot of opportunities to go with this product.

    But this product is sold only by Amazon and Fulfilled by Merchant. No FBA. Besides that, it needs NOCSAE and SFIA standards and I am not sure if some manufacturers have these approvements.
    Although I have seen some suppliers (China) that show on product these standards.

    I will appreciate your opinion. Thank you.

    BR,

    Dan

    1. Hi Dan,

      I can’t comment on the standards that you mention the suppliers need, however, there are plenty of good opportunities, especially those that are sold by Amazon or FBM. If the other metrics show promise, then it sounds like it would be worth looking into further.

      Gen

  10. Hi guys,

    your service is amazing. I just signed up and spotted a good opportunity to sell my favorite soccer teams’ jerseys. The product has 4/5 sellers and I am one of them selling at a slightly lower price than competitors.
    I uploaded the product on Friday and I received 6 orders in 4 days. I am new to Amazon so I am sure there is a lot of room for improvement in what I am doing.
    Thanks Greg & Jungle Scout team 🙂

  11. Hi Greg, Gen and team.

    Excellent case study, been following on, learning a lot and loving it. I had a quick question regarding lead times. When requesting and receiving a manufacturing lead time from a supplier on alibaba as part of the RFQ e.g 30 days, generally speaking would it normally be only working days or would it include the weekends? And when does the time (e.g the 30 days) start ticking? Is it straight away i.e the day you complete the first part payment? Is it when the factory receives the materials for the order?

    1. Hey Mo,

      Thanks, glad that you’ve been enjoying it! In my experience, lead time are just calendar days, not business days. the time starts generally from your first deposit….it’s assumed they have all that they need on hand, unless it’s a lot of customization.

      Hope that helps!

      Gen

  12. Hey, as you can see i have been doing the Affiliate Sales thing for a bit – – now it’s time to take it to the next level and sell my own products on Amazon . . . . .
    you doing this case study is what’s getting me to buy your software and get started . . .
    i was looking at other software But i think yours has more to offer . . .
    and with you going through the process has Sealed The Deal – – it shows you care about your customers . . . . . . .
    .
    love what i see – i will be starting selling quicker with this Case Study teaching me – and then i will have my daughter doing the same – – “she’s wanting it Too”
    .
    Thanks – – David Boggs

    1. Hey David,

      That’s awesome, thanks so much for sharing your story and your kind words. All the best to you and your daughter, we hope you find every success. Maybe you can help each other along in the journey?

      We’d love to hear how you get on in the future, so don’t forget about us 🙂

      Kym

  13. Can I get someone’s opinion about market depth.

    In a case where it’s clearly a well known brand dominating I can understand the difficulty in competing but when the one or two sellers dominating aren’t brands, perhaps there is still room?

    Or do you assume that some other factor about their company and/or product and/or listing is the cause?

    An example that I just came across in my product research is as follows. The top seller (according to estimates) is selling around a 1000 per month – the other sellers are struggling to sell 50.

    How much weight do you put on market depth as a factor in deciding whether to go forward with a product or not?

    Thanks!

    1. Hey Steve,

      It’s difficult to say in relation to your example without delving deeper. But there could be a lot of reasons for this, here’s a few things to consider:

      – Make sure you do your intellectual property research to make sure there’s not a good reason why there aren’t many sellers of this product

      – The other sellers may be newer sellers or have poor listings. Take a look at their number of reviews, rank and rating to determine whether they are getting low sales due to poor performing listings.

      – Most importatantly, how many sales are there amongst the top 10 sellers per month? Sounds like it’s <2000, which might indicate there is potentially too little demand for this product, especially if this is on Amazon.com. I would advise monitoring this product idea over a couple of weeks to get some deeper insights.

      Ultimately, if there are only one or two FBA sellers dominating a product idea, and you can easily see that you can enter the market with a better version of that product, and a better product listing, then it sounds promising. But the crux is to ensure there is enough customer demand! That's where the Product Tracker in the Jungle Scout Web App comes in really handy.

      Thanks for reading,
      Kym

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