VALIDATE
Product validation is the single most important aspect of selling on Amazon. It’s crucial to determine the risk level of a niche, prior to launching as well as having a clear understanding of the budget that will be required to launch a product.
Two guaranteed ways to fail in launching a product are: selling a product into a niche that’s too competitive before having enough experience AND attempting to launch a product with a budget lower than what is required.
This guide explains Data Dive’s product validation workflow at a high level. If you would like even more detailed information about this workflow, watch the videos linked in each step and then join Office Hours if you still have additional questions.
TABLE OF CONTENTS
Step 1: Start Dive
Step 2: Clean MKL
Step 3: Complete the Product Scorecard
Step 4: Complete the Profits tool
Step 5: Analysis
Step 6: AI Product Brief
STEP 1: START DIVE
In this step, you’ll need to select the most relevant competitors and start a dive.
The competitors you select should be as similar as possible to the product you are validating.
1. Download the Data Dive Chrome Extension.
2. Go to Amazon and select the top 15+ relevant competitors by clicking “Add to Tray”.
3. Name Your Niche
4. Click Start Dive
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STEP 2: CLEAN THE MKL
In this step, we need to remove keywords from our MKL.
• Remove any branded search terms like company names. We can not add these to our listing so they should be removed from the MKL.
• Remove any keywords that are not relevant. Ask yourself, “if a customer typed in this search term, would it make sense for my product to show up here?”.
• To exclude a keyword from the MKL, click on the check box and then the pop up banner that says “Exclude”.
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STEP 3: COMPLETE THE PRODUCT SCORECARD
The Product Scorecard is a tool that can be used to determine the risk level of a niche prior to launching. After answering each question in the Product Scorecard, you will be given a final score.
A higher positive score means a niche is lower risk. A lower negative score means the niche is higher risk.
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HOW TO INTERPRET A PRODUCT SCORECARD
After filling out dozens of scorecards, you’ll have a distribution of scores. Some will be high and positive, many will be low negative scores. There is no minimum or maximum score that’s required to launch a product. More experienced sellers may attempt to launch a low score product. The purpose of the scorecard is to inform a seller of the risks prior to launching.
STEP 4: COMPLETE THE PROFITS TOOL
If a niche receives a high score on the Product Scorecard, you’re still not done.
Understanding the risk level of a niche is only half of the battle. It’s crucial that sellers can accurately forecast the budget required to launch a product. Launching a product without an adequate budget required to launch is one of the most common reasons that product launches fail.
The fastest way to fill out Profits is to click the “Populate” button in the upper right corner of the tool.
Choose a product that is most similar to the product you plan on selling.
To estimate sales velocity, navigate to the MKL and find the most relevant competitor to what you plan on selling that is indexed for 60%+ SV on P1. This is roughly the number of units you should plan on selling within 4 weeks of launch.
CAUTION: WHILE ESTIMATIONS CAN BE USED TO GET A GENERAL IDEA OF THE BUDGET REQUIRED
TO LAUNCH, IT’S BEST TO USE VERIFIED NUMBERS FOR MOST ACCURATE RESULTS.
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STEP 5: ANALYSIS
After completing the Product Scorecard and Profits, it’s time to analyze this niche to
see if it passes validation.
You’ll want to come up with your own criteria for an acceptable risk level and budget required to launch. Keep in mind that most products will fail validation.
Don’t get discouraged. Steering clear of products that have too much risk or exceed your budget will save you time and cash in the long term.
ANALYSIS OF OVERVIEW TAB
After using this workflow to validate dozens of products, you’ll start to notice trends
that can be spotted quickly in the overview tab. While it’s recommended to fill out
the Product Scorecard and Profits for every product you are validating, you might be
able to quickly eliminate certain niches from your queue by analyzing the Overview
tab in the MKL.
- Sales volume is too high.
- Reviews are too high.
- Keyword distribution is too low.
STEP 6: AI PRODUCT BRIEF
After completing the Product Scorecard and Profits, if a product passes validation (has an acceptable risk level AND falls within your budget required to launch), then you should run the AI Product Brief.
Should you decide to proceed with the launch, the AI Product Brief will give you ideas for how to develop the product to beat competitors.
1. Select up to 10 of the top competitors.
2. Click start.
The report takes 10-15 minutes to complete. Duplicate the tab so you can check progress and continue working.
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Additional Validation Training:
Do you still have questions about this workflow?
Register to any of our 3X weekly Office Hours sessions and get your questions answered.
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