O-Ring groove Library feature

Hi All

I do not have knowledge on creating library features. I just stared to create library feature for O-ring groove. I am pasting the steps that I have followed while creating a sample.

Step1. Created a basic shaft

Step2. Created a Groove profile and made revolve cut and saved this Feature as library feature

When I try to drag and drop the the library part on some part it asking for reference as I seen in image

and I selected the same, then it is saying unable to create library feature with selected reference.

I searched in internet and found one O-ring groove library file, when I drag and drop it, it is asking for the locating edge and OD. Could someone just check and let me know how it is created.

Thanks in advance

SolidworksParts And Features