There is always a lot of talk about doing product research to find the next best seller or winning product on Amazon that people should sell through Amazon FBA. But what about products to avoid selling?
A consensus among experienced Amazon FBA sellers, experts, and Amazon course coaches is that there are certain product types that sellers, especially new sellers, should avoid.
These products include:
- Topical or ingestible
- Products without data
- Glass or fragile items
- Products with over-saturated markets
- Hemp and adult items
- Products selling below $15
- Gated category
- Products with multiple variations
Let's go over each of them and at the end, we'll also tell you the BEST business model that most new sellers should use when getting started on Amazon to give you the best chance of success!
1. Topical or ingestible
Why you should avoid them: You risk the possibility of lawsuits.
Creams, ointments, or supplements are products that are strictly governed by various government agencies, especially since these deal with the human body.
However, despite the strict rules and laws that these products adhere to, freak accidents or mistakes can still happen. And when they do, you would not want yourself to be in the line of fire of any potential lawsuit.
Are you really liable for the products that you sold, but did not manufacture? Can you really get sued for it?
This should not bother you because you really should not be asking that question to begin with. Between fighting a lawsuit and avoiding it, the latter is your safest and most stress-free choice that you should make.
To do this, simply do not put these types of products in your product catalog.
Why you should avoid them: You risk the possibility of the fad dying out.
Trends are one thing. Fads are another. If you have to pick between the two, then going for trending products should be your ideal strategy.
What is the difference between the two? While it may seem like it's a matter of semantics, it's not.
A trend refers to a development, or situation that shows changes in the way people behave. A fad is simply something that gains popularity quickly, but also loses it just as quickly as it had gained it.
A good example of a fad product is fidget spinners. Everyone seemed to be in on it. Today, it is probably rare for anyone to find a person who genuinely enjoys using it.
Trends, however, have the effect of changing society for the long term. A perfect example of a trend is the change in people's environmental awareness. This trend resulted in the emergence of eco-friendly products or environmental sustainability practices. It's been years, but this trend still shows no signs of dying out or slowing down.
So, do your product research and find a winning product that can ride the trend.
Why you should avoid them: You risk yourself building a foundation of inconsistency
Some of you may find this debatable, and it really is. Seasonal products are a good way to make money, no doubt.
As someone who's just starting out, however, you want your foundation to be built on consistency. To achieve this, the products that you sell should be something that is available and reliable all year round.
Seasonal products have spikes in between months or quarters, and you can certainly bank on these spikes. But taking advantage of these spikes is easier if you are more experienced.
And since you are just beginning with your Amazon FBA seller journey, it would be wise to gain this experience with other products first.
4. Products without data
Why you should avoid them: You risk wasting your money sourcing a product that won’t sell.
You might have an excellent product idea, but you shouldn’t get too excited about selling that product without first verifying Amazon customer interest.
You can check the Amazon best sellers to see what kind of products are selling well in the category you want to sell in.
Amazon FBA guru Travis Marziani also recommends checking the Amazon search results for keywords that pertain to your product. If a product similar to yours is near the top of the search result, it means there is Amazon customer interest in the product.
However, the most efficient way to do Amazon product research is to employ the help of a product research tool like Jungle Scout or Viral Launch.
These tools can show you accurate data for how many people are searching for a keyword and how many sales it’s getting so you can easily identify if there is Amazon selling potential.
5. Glass or fragile items
Why you should avoid them: You risk inventory breakage during transit.
An Amazon product is subject to quite the journey before making it into the hands of your paying customer.
In most cases, a product needs to make it all the way from China to the domestic port of the country you are selling in.
From the port, it's loaded onto a truck and taken to an Amazon fulfillment center where it is lifted onto a storage shelf and eventually removed from that storage shelf once sold.
Finally, it’s loaded onto an Amazon delivery truck and dropped at the doorstep of your customer.
If it arrives broken, your customer will not be happy with their purchase.
You could take the extra precaution of spending more on better packaging for your product, but this can be expensive.
It’s a safer bet to avoid these kinds of products when starting as your margins are likely to be slim already, and too many broken units can easily result in a negative profit margin.
Why you should avoid them: You risk yourself to possible faulty items or lawsuits.
Similar to seasonal products, some are perhaps against this, and your arguments may be valid, too.
But, as much as we can, we advise you not to deal with or fill your inventory with electronic products at the start of your Amazon seller journey.
Faulty electronics products are a thing. In fact, according to one study, people return at least 28% of coffee machines and blenders for being defective. Gaming consoles, TVs, and speakers have a reporting rate of around 25%, while small gadgets have a rate of 20%.
It is hard to take those odds when you are a beginner Amazon seller. But those are not even the worst part. The worst-case scenario for you are, surprise, lawsuits.
As we said earlier, it is much better for you to focus on building your foundation and goodwill rather than take on risks. As a new seller, one bad customer review or complaint can destroy that foundation or goodwill. Imagine what a lawsuit can do to you.
To be safe, find another product category and avoid electronic products.
7. Products in over-saturated markets
Why you should avoid them: You risk being lost in the crowd.
As a new Amazon business, the last thing you want to do is compete in markets that are over-saturated with many sellers.
When doing product research, if you see that many sellers already have hundreds or even thousands of product reviews, it’s going to be very difficult to be successful in that market.
This is especially true if you’re wholesaling and selling on a product listing with other sellers, where your chances of winning the Amazon Buy Box will be much lower.
Furthermore, markets with an abundance of established and successful sellers have much higher Amazon advertising costs than less competitive markets.
The cost to drive customers to your Amazon store with sponsored product or sponsored brands ads may cost a few cents in one product market and up to $10 per click in another!
8. Hemp and adult items
Why you should avoid them: You risk being limited in your marketing ability.
If you are planning to sell hemp or adult items and advertise your products on other platforms outside of Amazon, such as Facebook or Google, think again.
Although CBD and other hemp made items are becoming more mainstream these days, they still face tough restrictions when it comes to advertisement.
As for adult items, Facebook bans them outright while Google has them restricted instead of fulling prohibiting them.
Either way, advertising matters in driving business, especially for new sellers with limited history of reviews.
9. Products selling below $15
Why you should avoid them: You risk leaving yourself with little to no profit.
As a third party seller on the Amazon Marketplace, Amazon FBA fees can eat into your profit margins substantially, especially if your product has a low selling price.
If you’re selling a private label or wholesale products like many sellers do, the Amazon fees you can expect to pay are:
The referral fee is based on the product category and charged as a percentage, but the shipping and Amazon inventory storage fees are based on the weight and dimensions of the product.
Therefore, if you have two products that are the same size, but one sells for $10 and the other for $40, the profit margin of the $40 product will be much less affected by the Amazon FBA fees.
That’s why Amazon gurus, like Dan Rodgers, commonly recommend not selling products below the $15 price point.
10. Gated category
Why you should avoid them: You risk yourself wasting valuable time.
Gated category products are basically restricted products on Amazon. To sell a gated or a restricted product, you need to get approval from Amazon.
This process is, unfortunately, too lengthy, time-consuming, and can require a lot of resources to pull through. To get Amazon's approval, you need to do some performance checks, provide additional qualifications, or pay additional fees.
As a beginner, this should not really be your area of concern. Going through this ungating process requires experience that is supported by a firm foundation, as Amazon considers your profile, too, when reviewing ungating requests.
So, how do you know if it is a gated product or product category? There are ways for you to check, but a good start is to check out the Amazon Seller Central page for gated products and product categories.
11. Products with multiple variations
Why you should avoid them: You risk receiving a listing violation from Amazon if done wrong.
Products with multiple variations, like colors and sizes, have special listing requirements on Amazon that can be complicated for new sellers.
Furthermore, having products with multiple variations manufactured means having to pay for multiple samples and check that each variation is of acceptable quality.
On top of that, it’s common to see an increase in returns affect your Amazon sales if you sell variations of clothes or shoes because of people ordering the wrong size, which puts an unnecessary strain on an Amazon FBA business just getting started.
To get started selling on Amazon is no easy task. However, many people still do it and have incredible success, especially with Amazon FBA.
Amazon FBA is an incredible business model for online entrepreneurs and allows you access to sell to high value Amazon prime members while Amazon handles everything from storage, shipping, and customer service for you.
If you optimize your Amazon product listing and leverage Amazon PPC to push your products in front of the most relevant consumers, there's a good chance you can be successful.
Although most gurus recommend using the private label business model so that you can join the Amazon Brand Registry and differentiate your product, retail arbitrage is probably the best way to get started for most new sellers.
Although you won't have access to the brand registry with retail arbitrage because you don't have your own branded product, it's a low-risk way to start making money on Amazon and learn the ropes before moving onto private label or wholesale.