Whether you’re just opening up on Amazon or looking to expand what you already offer, analyzing your competition is an important part of your research.

Is that product really as good a bet as it appears to be?
How dominant is your competition?

What can you do better?

If you really want to do well on Amazon, the work you do before putting up products for sale is just as important as the quality of your product and how you promote it. What should you look into when analyzing Amazon competitors? Let’s break down a few points:

Working on competitor analysis for Amazon? Get our worksheet here

#1. Reviews

Reviews offer a wealth of information for your competitor research. For starters, there’s the number of reviews competitors have. If you are targeting a particular product, try looking at the product page – how many reviews do top competitors have?

A rule of thumb is that if the top five sellers of the product each have more than 300 customer reviews, that’s probably going to be a tricky one for you to get traction selling. It’s got an established set of sellers who have been selling reasonable volumes for a while. That’s not to say you couldn’t do well if there are other factors which will give you an advantage, but it’s not going to be an easy win to come by.

On the other hand, if one or two of that top five have less than 300 reviews, with a bit of work you could put yourself into a top five spot. (Just be aware of Amazon’s rules with regard to any soliciting of reviews).

The other thing reviews give you is valuable customer feedback. Is there anything which jumps out from competitor reviews that you could easily improve upon? There may be some comments which at least give you an idea of what to avoid.

#2. The Sellers

When you look at the sellers themselves, you’re looking for a couple of things. Firstly, is Amazon selling the product themselves? Most of the time, you’ll find it very difficult to compete with Amazon on a product they sell. Their scale gives them access to much better pricing and therefore they are more than likely able to undercut other sellers. Our strong recommendation would be to avoid choosing the product if Amazon already sells it.

Secondly, how many other sellers are there? You can see this on the product page. If there are many other sellers, it may be a product best avoided. However, this is not necessarily true if you can provide a different advantage such as…

… Prime eligibility. Don’t miss the draw that being Prime eligible brings. There are millions of Prime users now and many will search by the Prime eligibility of the product first, especially if they need it quickly.

In the example below, this might be a product you have a reasonable chance to compete in (assuming you’ve done research on how well it sells, which we’ll get into later). Points to note here include:

  • There are only 3 other sellers.
  • Reviews number less than 300.
  • Prime eligible, but the low number of sellers mean you may be able to compete anyway.
  • The best seller rank is #2266 in its main category of Home and Kitchen. There is a lot of debate over the best strategy for incorporating best seller ranking into product decisions, but a general consensus tends to be that products which rank below #5000 might be worth a second look.
  • BUT, “ships from and fulfilled by Amazon.com.” We’d keep looking.

#3. Pricing

Hmm, could you compete on price for the product? Should you even try? We know that pricing has an impact on winning the buy box, but is it realistic to assume you can compete this way?

Let’s unpack that: you might have access to much better pricing on the product than your competitors, but that’s a relatively low likelihood. It’s Amazon, if you’re selling an imported product which others can get their hands on too, the chances are anyone else can be cutting deals on price.

How else can you lower your costs? Reduce the fees you pay. Amazon fees are set and can only be lowered so far, while others are probably trying to do the same thing. So, you can keep trying to undercut on price, but really this is a risky strategy. It only leads to a race to the bottom.

Jungle Scout recently did a breakdown on a competitor who they noticed had recently started up and shared many similarities with themselves, however there were also differences. They concluded that competing on price simply wasn’t a good strategy because it would diminish margins and eventually mean selling the product was not worth their time.

The better strategy? Competing on what makes you different. In their case, quality was a factor. Their bamboo marshmallow sticks are wider and stronger – that’s their competitive difference because everyone hates when their marshmallow stick breaks off!

So, when analyzing your competition, pricing comes into it but it’s more about whether you will be able to offer product that is similarly priced, yet can be differentiated somehow.

Tracking the pricing over time is also a good idea as part of your analysis – sharp dips happening frequently can indicate that competition is heavily based on price. Use a tool such as CamelCamelCamel to monitor over time.

#4. Sales Numbers

You always want to have a good gauge of the demand for the product first. We know that the higher the Best Seller Rank, the more units are being sold, but how much does that really translate to? Is there enough demand that you should be able to do well?

Fortunately, there’s also a tool to help with that. Jungle Scout’s Estimator will provide you with a good estimate of monthly sales numbers based on the product category and the Best Seller Rank of the product. Below is what it calculated for that bamboo cutting board, shown earlier:

What numbers should you be looking for in terms of sales velocity? That’s going to be a decision you need to make, looking at the data you have on competitors (how many others?) and what the product actually is.

Let’s say there were only a couple of other sellers for that 845 per month (which is very low volume), if you’re confident you should be able to do better than other sellers with a few tweaks, you might be happy with even 10% of those monthly sales. It’s never an exact science, but you’ll have to work through based on your own goals.

Another important thing to look for is sales trends (for which Jungle Scout also has tools). What does the trend line show you? Any product showing sales declining over time should be steered clear of, whereas those which are steady or show consistent increases might be good choices.

#5. Listing Quality

This is a major area which you may be able to compete in. The quality of the listing, including keyword use and descriptions may be something you will be able to improve upon, giving you an edge over competitors.

Look to the listings on page one for the product you would like to sell and check how well sellers have optimized their listings. Look for things like:

  • Lack of keyword use in title, bullet points and description.
  • Very short descriptions.
  • Weak bullet points.
  • Missing information.
  • Low-quality images or use of just one image in the listing.

You’re looking for weaknesses which you will be able to do better in. For example, where descriptions are minimal, are there other ideas you can add, such as uses for the product which haven’t been discussed? This brings in more keywords to your listing to hopefully draw a new crowd of buyers.

Jungle Scout mentioned this in their breakdown of their competition for their bamboo marshmallow sticks. A user had mentioned to them that the sticks are also good as a support for orchids or other delicate flowers. Could this be a new angle? Use a tool such as Merchant Words to research keywords and find how many people search each month for your idea for use.

Ready to tackle the competition on Amazon? Get our analysis worksheet here

Final Thoughts

If you want to boost your chances of successfully adding a new product to your Amazon offerings, then conducting at least some basic competitor research is essential.

Look for the markers which suggest that this is a product with demand from buyers and competitors who you can reasonably do well against. We’re always looking for that sweet spot of high demand versus low competition – not always easy!
Look at aspects such as reviews, quality, optimization of listings and sales velocity. Will you be able to sell enough to meet your monthly goals?

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