Ultimate Guide to New Product Development for Amazon Sellers

New Product Development for Amazon Sellers

Table of Contents

Estimated reading time: 13 minutes

From where does the idea of products originally come from? What is the importance of new product development for Amazon sellers? This is because people are eager to discover and learn about anything new when they are going around malls or viewing an e-commerce platform like Amazon. We want something recent to live.

Achieving new product launches and making a large profit is a basic factor for Amazon sellers or other businesses. This could be one of the vital issues to ensure good corporate expansion and sufficient competitive power in the market environment.

In this article, I’ll give you five steps for launching a new product, whether selling it online or in a chain store. You’ll gain a basic understanding of the detailed new product development process, especially when importing from China, the world’s largest wholesale market.

Let’s go and explore “How to Develop & Manufacture New Products for Amazon“.

Step 1: Get New Product Ideas from Product Prototypes

Usually, it’s not easy to have an accurate product idea at the beginning. People are getting inspiration or new product ideas from the information they receive.

The “new product idea invention” process is more likely as “manufacturing the new information” and converting it into our “product ideas” from “something” to a precise one step by step.

After I worked with world-leading retailers for years, I have realised that, in most cases, there are two types of “new product ideas.”

1. “Pure” New Product: It means you are the inventor or designer of a product that hasn’t shown up on the market yet.

2. “Inspiration” New Product: It means you are trying to improve or modify a specific product that exists in the market already. Find out a product prototype and then improve it.

Most Amazon Best Seller uses the second method to create their “new product” and get their “prototype design.”

Find Product Trends and Series:

Ask yourself a question: What are the new trends on Instagram / TikTok / YouTube? What are the new products on the market?

Knowing the needs of end-users and social media trends is critical when developing new products. Write a customer needs list based on the information you gathered. I have noticed that if you are releasing a new hot commodity on your channels, like YouTube/TikTok, then there comes the question from the audience: Where can I buy it?

See, that’s the power of trends, and you need to follow that. The good thing about social media is that now you can find the customer’s needs much more easily than in the past. They have shared what they want!

Market research is essential for Amazon sellers. Below are useful tools when you conduct your research on the specific product, especially for your Amazon FBA business:

Such as Jungle Scout and Amazeowl

That one-stop Amazon selling analysis site can support you when collecting the necessary like competition, high-potential products, a similar new product on the market, estimated daily sales for specific items, etc.

Reference Samples:

If you want to buy a new vehicle, then you might need to test drive it for a while and check the specific data, and then make your decision.

What does that mean? You need to compare, test, and then make your decision. It’s the same thing if you want to develop a new product from the Chinese wholesale market.

It’s essential to find a reference sample and check the quality level, function, packaging, and cost. The reference sample can be the hot-selling items that have achieved excellent performance in the past, or trends in the future.

It can also be seasonal products. For example, in the summer, beach toys are always the kids’ favourite products; they will never be out of the stage; that’s why many toy businesses still sell them every summer.

At the same time, getting samples can help check the product quality. This also needs to be noted. For further information, please read this article: Buying Product Samples from China

Focus on Specific Industry:

China’s manufacturing covers almost all kinds of industries.

You should try to identify the defective Points of the reference sample and find a solution to solve it. Why? You solved the problem, and people can buy from you now!

Make sure you have an understanding of the existing products available in your market. The new development products should be in your industry and you are familiar with, most likely, you can succeed in the end.

Creating a new product, something you aren’t familiar with, is quite a risk; it requires cost input, timing, and patience. An accurate development plan will help you and your team to focus and avoid mistakes, such as developing too many products at the same time or running out of resources to build the product.

Launching a new product from China can be complex. Our team on the ground in China specialises in navigating every step of this process for Amazon sellers. Let us handle the complexities of sourcing, development, and quality control for you. Contact us today for a free consultation and turn your product idea into a reality.

Step 2: Be Familiar with Your Product

There are thousands of Chinese products on the market, and you can even get the “made in China products list” easily today.

So focus and familiarity with the specific product are also critical, and avoid disruption by other attractive things in the market. Sometimes a “good product” does not fit your target market.

You know what might be a high potential with the right profitable product for your market is the key. Concentrating on a specific product/industry helps you to understand the buying cost and the quality level, which makes your products more competitive in the market.

Product Material Analysis:

Different materials have different performance and price levels. You need to understand what would be the ideal material for your product when you start with a new product development process.

  • Here is an example: you would have various options for a pet bowl.
  • You can find different materials for making the product: bamboo fibre, PP/ABS Plastic material, Silicone, and stainless steel.

Detailed research about a similar product on the market is essential when you work on new product development.

Know the Manufacturing Process of Your Product:

It doesn’t mean you have to know all the technical things, but at least understand the basic manufacturing processes for your project, like plastic injection, painting, assembling, packing… By knowing that, you can analyse the costs in a different process when you have new invention ideas. That would support you when selecting the materials for your new product project.

Understand Your Target Market:

If you don’t analyse your market thoroughly, then you can never achieve success in today’s business environment.

You can find lots of “good products” when touring the Canton Fair or visiting the Yiwu Market. Does that mean all those products can be sold well in your target market? Not really, after we served many clients from all over the world.

Before launching a product, you need to investigate if the “good product” will sell well in your market. That’s the No. 1 question you should ask yourself before developing new products/ China items from the wholesale market.

A targeted, strategic, and purposeful approach to new product development will ensure your products fit your market.

Purchasing Cost/Ideal Margin for Selling on Amazon:

Checking on the current selling price in the market would help you to have an idea of when you are pricing your product.

Here is the ideal purchasing cost reference: You need to obtain an all-inclusive purchasing cost that is one-third of the market selling price.

For instance, if you want to launch and sell a new design mug at $ 3 on Amazon, then the all-in cost of a single mug you are importing from China would be around $1. It ensures you are still profitable after deducting all the other expenses when importing from China.

The all-in price includes product costs, shipping costs, Customs declaration/Import tax, etc. All the other expenses until you get them at the warehouse.

Meanwhile, you can set up the target buying price, which can help you when conducting product sourcing on China’s online wholesale websites. The target price should be reasonable and realistic. What we usually do is to take the retail price of the brand products as a reference, and set up our own target purchasing cost based on it.

A decent and reasonable profit margin may also assist companies in creating pricing strategies for products or services. Many retail stores need to have at least a 50% gross margin to cover all the costs of distribution and investment during the development process. It helps them to make further product bidding plans.

Gross Profit Margin:

It compares revenue to variable costs. It tells you how much money each product creates. Variable expenses are any costs incurred during a process that can vary with production rates (output). The business uses it to compare the existing product lines.

Net Profit Margin:

The net profit margin is the percentage of a business’s revenue left after deducting all expenses from total sales, divided by net income.

Step 3: Clarify New Product Requirements

Product Development Timeline:

Make sure that you have enough time to develop and implement your new products and meet the sales schedule, especially for seasonal sales. Clarify your required ETD (estimated time of delivery) and inform your supplier about the target timeline/deadlines for implementation. Be reasonable and realistic.

New product innovation development needs a timeline that ensures you can sell the product on time.

Quality Level:

Products in China are always of different grades, or we can say, you pay what you get.

Analysing the quality level of your product is also essential. Do you have a plan to sell them in “good, better, best” levels, which means different quality/pricing strategies?

At the beginning of a new product development process, you need to think about the quality level. And also, be realistic because, in most cases, the price decides the quality.

Testing the New Products Prior to Launching on Amazon:

Large retail stores always need the product to pass related examinations, especially for a retail giant. The supplier needs to consider the materials and production process, and also the testing cost should be pointed out to be paid by the supplier or the buyer. The testing requirements between the US and EU are different, and you should inform your supplier which market the products need to be tested.

Certificates for Selling a New Product on Amazon:

For products that are shipping to the EU, the CE certificate is mandatory by EU law. You should inform your supplier if any other exclusive license is also needed, such as GS and Toyproof (applicable for the German market).

If you are going to ship to the USA, the FDA is essential.

Packaging for Selling a New Product on Amazon:

Custom packaging is a necessary marketing strategy to glamorise a product to attract the consumer’s attention. Many consumers will judge a product by its packaging before buying it, and the packaging is the product’s identity.

Different product packaging means different prices, 4C box, window box, blister, and the mentioned packages should be considered during the designing process. Product packaging plays a more critical role in consumer decisions than you might think. A product’s packaging communicates many things, from what the product can do for your customers to your company’s values.

Shipments and Terms for Selling a New Product on Amazon:

Inform your supplier about how you want the products to be delivered: air freight, sea freight, or even by train. Shipping is an essential part when importing from China.

Step 4: Supplier Selection

Find a Reliable Supplier:

Every buyer wants to own a successful and profitable business, but it’s not always clear how to get there. Especially for doing business overseas. How to make your business successful and profitable? I would say to find an excellent China supplier to work with is the critical step; the right supplier can support your business by giving a competitive price and solving the problem efficiently.

The right suppliers provide the most suitable goods and services at the most suitable prices and at the right time frames for your specific business needs.

Product sourcing from China and finding the right Amazon vendor is not easy, but you can do that by continuous practice or by looking for a China sourcing agent service.

Backup Vendor:

Having a backup supplier in place will help companies get a product out on time and with minimal disruptions caused by unexpected increases in demand or regulatory issues with the primary source. If you wait until your single-source supplier goes out of business before looking for a second option, it is probably too late to prevent a costly problem.

Step 5: Cost Saving for Amazon Product Development Strategy

Cost savings can be defined as a systematic strategy, and it’s an incredibly important concept in business; it’s the real, measurable savings that impact a company’s margin. Companies want to make money, but saving money is another financial objective that is of equal importance.

Set Up the Budget:

Products made in China can be produced based on the budget price. Chinese factories can make the same product in different materials.

So the budget is an essential part of cost-saving management, and no matter how large or small your enterprise is, a budget can help your business be financially viable. A budget is a financial plan, and it means identifying how much money you want to spend or save.

Cost Breakdown:

The cost breakdown is the systematic process of identifying the individual elements that comprise the total cost of an excellent service or package, and it is a method of cost analysis, a popular cost reduction strategy, and a viable opportunity for businesses. Usually, the price should be broken down into the following sections,

a) Labour cost: it should be a certain number of labour hours or the salaries of workers. Labour is typically one of the most common starting points of the cost-saving process

b) Material: raw materials, parts, and components

c) Package: It should be the packaging method of your products

d) Logistics: Mainly regarding customs clearance, transportation, warehousing, and distribution.

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Final Thoughts

You would have lots of product launch ideas, but you need to implement them in several different stages of new product development.

The new product launch is so important to online stores or traditional businesses. I hope you will have more ideas about how to start the new product development strategy after reading the post. Developing new products in low-cost regions like China or other Southeast Asian countries is a good option after you are equipped with essential skills.

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