3 Less Known Tips For Amazon Product Research & Selection

The 3 Most Overlooked Aspects of Amazon Product Research

Hey! It’s Vova Even again, I welcome you to another tips-based article, and this time, I am going to tell you some important things lots of sellers don’t usually talk about. 

Product research is an integral part of selling on Amazon, but if you make mistakes in this sphere, failure will be inevitable. That’s why I would be sharing three less-known things that you should take into consideration while you are researching your potential products.

Ever since I started selling on Amazon in late 2016, I have certainly made mistakes in my journey and learned from them. 

These mistakes opened tons of opportunities for learning which has made me capable enough of being here with you and sharing my experience and helping you achieve your goals. 

After entering the Amazon space, I realized there are too many new sellers don’t know and too much that I myself wanted to share.

That’s why I started a YouTube channel and created free Udemy courses, which have proved to be a great success so far!

So, that’s all about me. Let’s now get started with today’s tips. As always, I am linking down here my YouTube video where I discuss the same tips so feel free to go with your preference:

Tip #1: Inquire About the Lead Time

The first thing that we should look at when we're searching for products to sell on Amazon is the lead time. What does it mean, and how can it benefit us? 

The lead time is the time period that the supplier takes to produce the product. 

For example, we want to sell kitchen knives and we decided to start with a thousand kitchen knives at first. 

So, one of the questions we should ask our supplier is what is the lead time, meaning how long it will take to prepare the order? Now, you might be asking why does it matter? Let me tell you, it matters greatly!

Here’s why: after you decide about a product to sell on Amazon, you might interact with a few factories to ask for quotations and see their quality standard of the product. 

Now, one factory perhaps will have a great type of knife and really does promise brilliant quality standards, but the supplier says it will take 30 days to create a thousand units. 

On the other hand, the other factory might also have somewhat similar quality standards and will produce the order within 25 days. Similarly, there's a third factory that promises to complete the order within the period of 20 days.

Here, you might think, “Oh, come on, let’s not compromise on the quality, it's just five days it's not like something long that will create a big difference,” but if you ask me, it does make a big difference. 

One of the main things of this business, which is based on selling products or physical products private label, is that we have to try to get money back into our pocket faster, so we can order more units and grow our business.

Just think about it – you have decided to invest in a thousand kitchen knives that cost you ten thousand dollars, and different factories give you different lead times. 

Now, just for a moment, let’s suppose you chose to go with the supplier with 30 days of lead time and produced the first batch in 30 days.

Then, as it happens, it takes you 70 days to ship products to Amazon and until it reaches the company and gets unpacked and ready to be delivered, add ten more days to it.

The total time will be 80 days, excluding the lead time!

Now, just conjure up the same scenario, but only replace the supplier with that of 20 days of lead time. What do you get? 

You are going to save ten days! If it takes you 80 days to kick off selling, or at least get to the selling stage, it will take you 70 or maybe even fewer days to welcome some bucks into your system. 

I hadn’t really looked that deep into the lead time when I was just starting, but gradually, I learned what saving ten days and starting selling faster means!

I hope you understand it too, but sooner rather than later. I understand the temptation to get done with the supplier-choosing process the moment you find one with cordial communication and better quality. However, it might not be worth it if it comes at the expense of 10 days of avoidable delay in selling. Suppliers intentionally behave like the world’s most friendly suppliers, but you don’t have to get carried away just by a few warm words. 

Invest hours into researching suppliers, look for the minimal lead time that you can get, and then look at the ratings of all these suppliers with less lead time. 

Don’t stress out; eventually, you are going to find a good supplier without compromising on quality and lead time. I'm telling you, the faster you start getting money into your system, the more you'll be able to create products and invest in more products.

One of the bad things about Amazon FBA is that it needs money to get going. So, be attentive and careful.

I’ve also prepared a whole playlist with Amazon product research tips and tricks for you, over 50 videos!

Tip #2: Negotiate Payment Terms

Another important thing in the product research process is payment terms. Do you know what that means? Good, if you do. For those who don’t, let me explain it to you.

Let's go back to the scenario we conjured up earlier. 

Suppose you are going to sell kitchen knives and invest ten thousand dollars for a thousand units. So, what are the payment terms here? Usually, for private label products, we pay 30% before we start production. 

After that, when the production is completed, we inspect all the pieces and see if each one is in perfect condition or not. And when the inspection is successfully done, we pay the rest of the money. That’s why we call 30-70 payment terms.

In the starting days, I didn’t pay much attention to it. I started selling in 2016, and my first sale came on 25th January 2017 (yeah, I remember the date for my first sale!). 

But even though I continued making impressive gains from Amazon, I never focused on payment terms and continued using 30-70 payment terms without thinking there could be another way around!

Then one day, a supplier asked me if I would like to order 5000 units and pay him 20% of the total amount, and then if and when I needed some of the units, I could pay 80% for these units and let the rest of other units lay in the factory. 

This really took me off guard, and the thought that struck me that time was, how come I never thought of negotiating payment terms?! 

The supplier’s offer sounded really good to me. 

I do have to say that I and the supplier met in Phuket, Thailand, prior to that. So we got to know each other better, and trust went up. 

Now, try to imagine implementing it in your business. You can buy more initially and pay a certain percentage for them but let the rest lay in the warehouse. 

This will also help you with cash flow because you don't pay straight away for all five thousand units. 

That will freeze all the money, and paying for all the units won’t be a paltry sum. 

I, at least, don’t find this idea a comfortable one. Because, even if it's not a big thousand of bucks, why would anyone want to freeze money in one go when you have got other better options?

So I started negotiating better payment terms for myself. For example, if I order 5000 units at 20% or 10000 units at 20%, that will be like paying $2000, and then I will have enough in my pockets to invest in other things. But what if I told you that there are even better payment terms? Interesting, isn’t it? 

But, to get better payment terms, all you need to do is negotiate. If you have a better idea, put that on the table in front of the supplier. It will be a win-win situation for both of you.

Another payment terms option can be paying the supplier 30% before the start of production but completing the full payment until the inspection and, subsequently, shipping to Amazon and the unpacking process is completed. 

It is called Against Bill of Landing payment terms. Honestly speaking, I haven’t tried this yet, but I recently learned this from a girl speaking at a webinar. 

I believe that the above-mentioned payment term is cool to try, but let me repeat again, it all depends upon how you negotiate. 

Usually, the bigger your company, the more trust the supplier will have in you and the better relationship you can enjoy with that supplier. 

But all is possible if you just ask. If you get rejected, ask what made them reject you so that maybe next time you will work it out. 

It's something I've learned in my life as well. I got rejected a lot of times in different spheres of my life, but I'm super happy about it because it taught me myriad things. 

It's not like if you get rejected, the world or your life ends. Sometimes, you've got to accept no, but always be ready to work on it in order to improve yourself.  

Tip #3: Learn about HS Code

Let's now talk about the third product research tip which is about HS Code.

During your product research, you have to look at the HS Code. You must have heard about it, but what exactly is the HS Code?

HS Code is a tariff on the product when it enters a specific country. Let me give you an example. Suppose you are importing something into the United States from China. 

You must have heard about the Trump Tariffs, no? So, maybe a specific product has a tariff of 20%, which means that you have to pay 20% of the cost of that product when it enters the country, and if you don't look into that HS Code, you might be surprised when it appears in front of you. 

You can read more about HS Code here. Also called the HTS code.

Just enter the product name combine it with ‘hs code’ and leave the rest to Google. 

If you really want to learn more about HS Code, I'm embedding a link to my YouTube playlist about shipping to Amazon.

It's basically a FREE course with Amit Rosenthal from Rosenthal Logistics, and currently, Amit is with Proboxx.

Use Proboxx discount code vovaeven100 to get $100 OFF your first shipment.

In those videos, we explore shipping to Amazon from ABC to XYZ, which is why it is a perfect course for beginners as well as advanced sellers. I especially recommend it to all my readers here. 

Generally, sellers don’t pay much attention to HS codes while researching products on Helium 10 or other software.

They only see if the product has demand among customers and how easily they can sell it, but they don’t take HS Code into consideration. 

Hence, eventually, when the HS Code comes to the surface unexpectedly, sellers lose money they could’ve saved.

So, my advice is: always look for the product’s HS Code while placing your order and save yourself a nasty surprise! 

Final Words

I hope you have learned something new today.

I have wanted to talk about these things for so long because ever since I started selling on Amazon, I haven’t seen sellers or instructors discuss lead time, payment terms, or HS codes. 

These might be little things, but they create a huge difference; they might even change the entire structure of your plans if you start considering them! 

I am going to sign off now. You are welcome to explore more on my FBA sales blog here. 

There is the kind of information encapsulated in these pages that you might not get anywhere else.

Also, my Udemy courses are highly recommended for you if you are new to selling on Amazon. 

Till we meet again, ciao!

Yours,

Vova :)