Amazon is unquestionably the largest online marketplace in the world at the moment. The changing shopping patterns of the customers have impacted the marketplace to a great extent. Consumers prefer online stores over physical outlets. This change in preference has forced every retailer or merchant to register with Amazon.
Many new retailers and merchants register on Amazon daily. This regular listing of new merchants at a swift pace has helped Amazon increase its size. Do you know that Amazon started as a virtual bookshop? Amazon has come a long way since then. It now sells almost every consumer good ranging from groceries to cosmetics and whatnot.
There is a substantial increase in Amazon's popularity and size because of social media and various other factors. This increase in Amazon's popularity is because of growing awareness about the benefits of Amazon. Almost every retailer has registered on this ever-growing and expanding online shopping platform. The remaining few who haven't already registered with Amazon are in the process of doing so.
Amazon has been able to expand its branches everywhere. The competition on this site has also increased manifold. Many merchants are selling the same items causing multiple listings. This increase in the number of sellers of the same good has reduced the aggregate individual share.
Cut-throat competition on Amazon has benefited the consumers by providing them multiple options and competitive prices. However, things have become difficult for sellers. They have to find new ways to promote and sell their products. If you are a seller who has partnered with Amazon or is planning to register your product on Amazon, you must analyze your competition.
It is essential to realize that with the increasing number of sellers on the site, the competition has risen significantly. To earn any revenue at all by selling on Amazon, you must remain ahead of the other sellers. These sellers are selling the same product as you.
One can follow various steps to achieve this end, like marketing and pricing strategies. However, analyzing your competitors remains very crucial. It is one of the first yet regular step that every new entrant or an old player of the Amazon marketplace must take.
Growing Competition on Amazon
An old report by Feedvisor mentioned that Amazon grew by 8% from 2018 to 2019. But this is a thing in the past. If we consider the present times, the virtual shopping platforms like Amazon have taken over the shopping industry by a storm. All the sellers of various consumer goods are on Amazon. Those who are still not there on Amazon are already in the process of registering themselves.
It is essential to understand that due to the increase in the number of sellers, individual sales of merchants have gone down. This spread in income is a cause of concern for many owing to these facts.
- In a survey between some 1200 merchants selling on Amazon, half of them said that Amazon is their only source of income.
- Most of these merchants who participated in the survey mentioned that they hire five or less than five employees.
- The number of merchants registered on Amazon referring consultants to boost their sales and promote their brands is significantly low.
As if these many woes weren't enough for one lifetime, it is worth noting that most sellers prefer to buy items with little or no competition. The present dynamics of the industry tells us that nobody is interested in facing the competition. Instead, everybody would prefer to save some effort and sell the products with minimum or no competition.
It all boils down to the point where you have to decide what you want to do. Either you want to get into a competition or just want to achieve a monopoly in the market. No matter what objective you have in mind, it becomes imperative that you analyze your competition thoroughly.
Identify your competition
Identifying your competition is as important as knowing your product inside out. Being unaware of the brands and products that you're competing with is like fighting an army that you cannot see. There is simply no point in the struggle as you are bound to lose under such circumstances. Similar is the case with the consumer market.
There is no doubt that It is pivotal to know about the competition. How many players are in the market or what products they are selling? What is their pricing strategy? These are some things about the competition that an entrepreneur must know. It is highly advisable that if you are a new player in the market, you should avoid crossing swords with old veterans. It is difficult to compete with somebody who has seemingly never exhausted the supply of resources and a huge customer base.
So, you should target the domains with few or only new players just in case you are planning to launch your venture. It'll allow you the opportunity to establish the base before anybody else does. This entrance into a relatively new market will help you gain a first-mover advantage. This first-mover advantage can make the entire difference.
Just in case you like to take a challenge, identifying and understanding your competition will help you develop efficient strategies. Strategies like selling superior quality products, selling at low prices, or improving your auxiliary services like quickening order processing or delivery can create a huge difference.
Why do you need to analyze the competition on Amazon?
Having understood that the competition in the market is cut-throat, it becomes an important business task to analyze the competition. If you want to obtain a more significant piece of the pie, put some extra effort into your business approach.
The main motive of taking up any trading activity is to gain profit. To increase profit through Amazon in these present times, you must remain one step ahead of others. If you want to come on top of your competition, it is essential to know where your competitors stand.
This need to stay ahead of others and earn maximum profit makes it imperative that the business conducts an efficient competition analysis.
Locating who owns the Buy Box is a significant step if you are looking to analyze your competition for many reasons. It is essential to know who holds the buy box, which helps you understand the critical competition in the market. Before we proceed on how to buy a box enables you to understand your competition, let's look at an Amazon Buy Box.
What is the Amazon Buy Box?
Amazon Buy Box is the box that appears on the product description page, allowing you to begin with the purchasing process. This buy box lets the consumer add the product that they want to add to the cart.
Since we have already understood that there can be multiple sellers selling the same product, winning the buy box can make the entire difference. It is worth noting that over 82% of the Amazon sales go to the seller, who has won the buy box for its product's description page.
To provide the best end-user experience, Amazon has installed some safeguards in the form of specific requirements. Every seller needs to meet some essential performance-based criteria if they wish to contest for the buy box.
Naturally, having a buy box on your product's page means that Amazon prefers you. This buy box on your product's page implies that your product is worth buying. This buy box on Amazon helps you increase your sales and benefits your product stand out.
Once you have recognized your competitor, who has earned the buy box on Amazon, you will be able to gauge what you are up against. Winning a buy box primarily depends on three things, fulfillment method, price of the product, and the time taken for shipping. These three parameters used by Amazon are nothing but what every consumer wants.
Either you are an old player in the industry, or you are looking forward to entering a new domain. Under any circumstance, keeping track of the number of players in the market is crucial for any business. To develop any strategy, knowing the number of competitors is an important step.
There are various ways of determining the number of sellers in the market. The quickest, easiest, and most direct way of doing this is by going to Amazon and doing a quick search about your product. By browsing it quickly, you'll get a fair idea of how many sellers are already selling the product you have to offer or are planning to launch. There are many tools to check the number of sellers in the market. Tools like Amazon's ASIN are very reliable for this purpose.
Before we proceed towards understanding how storefront and store checks work, we must know what a storefront and store are. Storefront is the page that Amazon shows when a user clicks on the name of a brand or seller on the product page. It is like a digital catalog where all the products offered by a seller are listed.
While almost every seller on Amazon has a storefront, the chances are that your competitor might have an Amazon store also. Amazon store is a customizable platform provided by Amazon, where you can showcase your products and the complete brand in one place. What more, Amazon stores also come with a personalized URL that helps the sellers stand out. Having a store on Amazon also allows you to access various reports and insights. These reports and insights can help you to efficiently plan your marketing campaigns.
Visiting your competitors, Amazon storefront, and stores helps you get a proper insight into your competitor's domain. The type of products that it has to offer, the offers and schemes that your competitor has launched in the market. Visiting a store and storefronts also provides you with an insight into their top products and their reviews.
Product reviews of the various sellers are an excellent way of analyzing your competition in the market. Product reviews from the verified accounts are a unique way of gathering a lot of information. This information will help you in making a lot of crucial product-related business decisions.
Let's try to understand how product reviews help in understanding the competition. Let's consider that you are trying to enter a new market, and you want to know how the competition is on the Amazon website. The best way to do so is to go to Amazon and do a search for the type of product that you are planning to launch in the market. Once the search results appear, choose the top five sellers and go through their product reviews.
First of all, consider that all the top five sellers on Amazon have a massive number of reviews. Let's assume that the average number of reviews is over 100 or 150. In such circumstances, it is wise to think that the targeted industry already has many key players who will make entering the industry a little hard. If the top sellers don't have these many reviews, it is safe to assume that the product line you are planning to enter is relatively new, and you still have scope to make a strong base.
Similarly, by going through some verified reviews, you will understand what additional features your competitors offer. In case you are new in the market, you will be able to know the customer requirements. If you are an old player in the market, you will be able to see the difference between your products and your competitors'. This difference in the product will help you understand where you need to make changes and improvements.
In case you are confident in your product, you can know how other sellers are doing by looking at the ratings given by the consumer. This is the right way of knowing and analyzing your competition.
Every seller has different strategies that he uses to increase his sales. Promotions and deals are some of the strategies that are often used for marketing by merchants. Understanding the promotions and deals that a brand offers will help you know your competitor's marketing campaign and how competitive he is. For example, your competitor has multiple offers listed for the few products which he is selling. In such a case scenario, your competitor is highly competitive and won't let you compete easily. This insight into your competitor will also help you understand
and develop competitive strategies.
Keeping track of rival seller's prices for all their products is a time-consuming and challenging task. The best part about this way of analyzing your competition is that you don't have to keep track of your competitors' prices. In order to understand their pricing patterns and strategies, you can use different tools available online. These tools will scan the product and give you a complete overview. The overview will include the historical pricing patterns about any product.
Further, you can use Amazon's in-built CamelCamelCamel widget to track the price fluctuating pattern of any product. CamelCamelCamel widget not only gives you the price fluctuation pattern of any product but also gives you instant alerts. These instant alerts are focused on restricted items and brands. With the help of the price fluctuation patterns, these alerts will help you identify exciting products according to your preferences.
Once you have successfully spotted a product that invites your interest, you can easily track the competition's repricing, sell-outs, and stock replenishments, which will help you develop your pricing strategy.
Sales are the basic yet very effective way of analyzing your competition. Which type of market you are in doesn't change the effectiveness of sales as a crucial competition analysis tool. Whether it is the physical market or virtual markets like Amazon. The only problem you will face while trying to analyze your competition through sales is to determine your competitors' sales figures. There is no official report or figures available in the market which will tell you the number of the product sold.
Next, the question that will come to your mind is how to make use of this way of sales for analyzing your competition when the sales figures are not even available. This problem of data unavailability is not only understood by us. It is hard to obtain reliable sales figures or estimates for many analyses. Keeping this in mind, many companies have launched tools that will get you the sales estimate of your competitors based on various algorithms.
Once you have obtained your rival companies' sales figures, which you need to note are estimates, the rest of the things are easy. High sales mean that your competitors are doing well, and low sales figures indicate that your rival companies are not doing well. This insight into your rivals' sales will give you a broad picture of where you stand in the market or what challenge you are going to face when you enter a new market.
How graphic is your product description page? Is your product description detailed? Have you listed all the features of your product? Is your product page aesthetically appealing? Is there a section for frequently asked questions? You might have overlooked these small things in the past. But they cannot be overlooked now as they make a massive difference in the present.
Every consumer wants to know everything about the product before they buy it. Nobody wants to spend their hard-earned money on something which won't be of any use or is of substandard quality. Having an appealing and informative product page can impact your customers sub-consciously into buying your product.
A look at your competitor's product description will help you understand what is working for him. Based on this, you can get more creative with your Amazon product listing and take over your competition.
Quick LinksIn the present day world, everything is getting digitized. Going by the trend, marketing has also taken a new form. It has adopted many new and advanced techniques. Search Engine Optimization or SEO is one of the modern tools which the advent of the internet has given to us. SEO marketing strategy makes the usage of certain words that are most likely to be used by the consumers while looking for products to buy online. These words are called keywords.
Modern-day merchants have also adopted this method to increase their sales and brand awareness. For example, a women's cosmetics chain has launched a new face wash, which they advertise to help reduce dark circles. In such a case, they'll add the keyword 'Women's facewash' to the product title and the product description. This keyword will increase their product's probability of showing up when a woman searches for a face wash online.
Analyzing the keywords which your market competitors use will help you understand the segment of products they are targeting and their marketing strategy. You can further use this insight to develop your marketing strategy to counter that of your competitors.
Locating these keywords which your competitors are using can be a difficult task if done manually. You will have to visit all your competitors' Amazon stores, which is exhaustive even as an idea. Some tools like Sonar are specially designed to do this task for us. These tools have made our lives a lot easier. They do all the hard work for us. These tools allow us to utilize our time for more productive business activities.
Analyze your competition
Analyze competition on an Amazon listing for faster growth and more sales
There are many benefits and ways to analyze your competition on an Amazon listing. Considering all the benefits, it is essential that you incorporate it as an essential part of business activities. There is severe competition in today's world. It is vital to stay ahead of your competition to survive. And to stay ahead of the competition, you must know the strategies of your competitors. Otherwise, the battle will be lost even before it has actually begun.
