After building our 8-figure Amazon business, we’ve developed a simple formula to identify winning wholesale products.
Today, we’re sharing our methods for beginners here.
Our Four-Factor Product Selection Formula
When evaluating potential products, we insist that ALL four of these criteria must be met:
1. Price Over $20 Buy Box Monthly Average
Products priced above $20 typically provide enough margin after Amazon fees and wholesale costs. Higher-priced items mean more profit per sale and usually attract less penny-pinching competition, any potential price instability will impact your margins less at higher overall prices..
2. No Amazon Retail in the Buy Box
This is non-negotiable.
When Amazon Retail sells a product, they dominate the Buy Box and can price at levels impossible for third-party sellers to match.
We built our business by avoiding direct competition with Amazon Retail. This looks like “Sold by Amazon. Ships from Amazon” under the Buy Box.
3. Multiple Competitive Sellers
Look for products where there are at least 2 sellers at Buy Box price to avoid exclusives. Also where the brand itself might be selling, PLUS at least one other competitive FBA offer. This pattern proves two things: the brand allows third-party sellers, and there’s established demand for the product.
4. At Least 20 Sales Per Month Equity
Sales equity = Your expected share of total monthly sales
If a product has 60 monthly sales and 3 equally competitive sellers, your equity if you test bought would be about 15 sales per month. We define competitive offers as those with the lowest FBA price or within 2% of it.
How to Apply Our Formula: Step-by-Step
Here’s our exact workflow:
Step 1: Verify the Buy Box Price Average
Use the free version of Keepa to check if the 90-day Buy Box price average exceeds $20. If not, move on.
Step 2: Check for Amazon Retail
Look at the current Buy Box and recent history. If Amazon Retail appears frequently, reject this product.
Step 3: Analyze Seller Competition
Look for multiple FBA offers. If the brand sells, ensure there’s at least one other established FBA seller.
Step 4: Calculate Your Sales Equity
Estimate the product’s total monthly sales, then divide by the number of competitive offers +1 to include your new offer. If it’s fewer than 20 units monthly, pass.
Step 5: Verify Profitability
For products passing the first four criteria, calculate exact profits using the Amazon FBA Calculator.
Real-World Example
Product: Professional Salon Hair Styling Flat Iron
- Buy Box 90-day average: $79.99 (✓ Over $20)
- Amazon Retail: Not present (✓ No Amazon Retail)
- Competitive Sellers: Brand + 2 other FBA sellers (✓ Multiple sellers)
- Monthly Sales: 150 units
- Competitive Offers: 3 sellers within 2% pricing
- Your Sales Equity: ~30 units per month (✓ Over 20 sales)
Profitability:
- Wholesale cost: $40.00
- Selling price: $79.99
- Amazon fees: $19.50
- Profit per unit: $20.49
- Monthly profit potential: ~$400+
This product passes all four criteria with flying colors! Many of the most successful products are mundane and “under the radar” of other sellers. They only require ~$1000 for a monthly order to bring in hundreds in profit.
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