Every wholesale purchase is a small investment decision. The aim of product evaluation is not to find a guaranteed winner, which does not exist, but to make decisions based on evidence you can check later. Here is a straightforward way to evaluate a product.
Step 1: Set your criteria first
Decide your rules before you look at a single price list, so you are not tempted to bend them for a product you like. Typical criteria include a minimum estimated margin, a minimum ROI assumption, a maximum budget per product, and categories you will avoid.
Step 2: Check demand
Best Sellers Rank (BSR) shows how a product's sales compare with others in its category. A single BSR reading tells you little. Look at its history over several months to judge how steady sales are and whether they are seasonal. Research tools can convert BSR into estimated monthly sales, but treat these as estimates.
Step 3: Look at the competition on the listing
- How many sellers offer the product?
- Does Amazon itself sell it?
- How has the Buy Box price moved?
Many sellers on a listing means your share of sales will be smaller. A falling price can turn a profitable product into a loss.
Step 4: Calculate costs and margin
For each product, list:
- the wholesale unit cost,
- Amazon's referral fee and FBA fulfilment fee,
- prep, labelling and inbound shipping estimates,
- storage costs if the product sells slowly.
Subtract these from the expected selling price to estimate profit per unit. Divide that profit by the unit cost to estimate ROI. Write down each assumption so you can adjust it when prices or fees change.
Step 5: Check restrictions and risks
Before buying, check whether the brand or category is restricted for your account, whether there are known complaints about the listing, and whether the product needs special handling, such as expiry-dated or fragile items.
Step 6: Start small and review
A small first order lets you compare your estimates with what actually happens. Review results honestly and update your criteria.
Need help?
Our Product Hunting & Research service documents this analysis for you, and Wholesale FBA Training teaches you to do it yourself.
About the author
Nasir Mehmood is CEO of ECom Seller Core and writes about Amazon and ecommerce. Meet our team.
This article is general information, not legal or tax advice. Rules and procedures change; check current official sources or ask a licensed professional about your situation.