Third-party ecommerce sellers are responsible for nearly 55 percent of units sold on Amazon. In revenue terms, Amazon earned 80.46 billion dollars through third-party sellers in 2020. In such a massive and competitive ecommerce marketplace, there is room to adapt and expand your customer base. You need to be agile and responsive to any changes made by your competitors.
The question then is how you can learn from your competitors. That’s where competitive analysis comes into the picture. It helps you make better business decisions that ultimately boost your bottom line. It allows you to identify gaps within your strategies and make the most of those left by your competition.
Let’s take a look at how you can analyze your competition and outpace them!
Not every Amazon seller who lists a similar product is a direct competitor. When trying to find your direct competitors, you need to focus on a few key elements. These are some questions you need to ask.
In a nutshell, if there is overlap in the target audience, pricing, products, and messaging, they are direct competitors. They have similar business goals and revenue models.
For instance, Pepsi is a direct competitor to Coca-Cola. However, Pepsi is not a direct competitor to a fresh juice product like Minute Maid. Even though a household can replace Pepsi with Minute Maid, the messaging and target audience is different for both brands.
Once you identify your direct competitors, it is time to take out your spreadsheets and do some competitor analysis. Amazon product listings are a treasure trove of information. So, the first thing you need to do is make a list of all your competitors’ products.
Once you have compiled the list, you need to thoroughly analyze each element of every listing. It is vital to look at the product listings from the perspective of a customer.
On the search results page, customers usually notice two elements: the product title and product image. So, let’s start with them.
Once you’ve analyzed the title and image, you need to dive deeper. Now, you need to audit the Amazon listing copy.
Customer feedback and ratings can make or break your Amazon business. Honest feedback is also a source of insights into the strengths and drawbacks of a product. In a nutshell, there is a lot you can learn by analyzing customer reviews — whether it is for your product or your competitors’.
Here are some things you need to keep an eye out for:
You can identify relevant keywords from the product title, product description, and bullet points. However, this is an exhaustive process. On Amazon, keyword density does not affect search engine rankings. This means that keyword stuffing is uncommon. So, finding all the keywords that your competitor is targeting is difficult.
In this case, a tool like SellerApp can help. Using SellerApp’s Chrome Extension, track every competitor product that you have identified. Once you track the product, use the Product Keyword feature to find relevant indexed keywords.
SellerApp will also give you search volume and cost-per-click (CPC) data for each relevant keyword. It will also tell you where the keyword is present - product title or bullet points. You get all this information straight from the Amazon product page!
Once you discover relevant keywords, you need to target them in your Amazon listings. You can add them as part of your backend search terms or include the keywords on your product page.
You can also leverage these keywords to run Amazon ads. This is an effective strategy to improve your market share.
Note: Your competitors may try to use the same Amazon advertising strategy against you. To protect your market share you should run sponsored ads targeting your brand keywords.
Data doesn’t lie. It is the best way to establish whether your competitors’ strategies are working. Once again, you will need the right set of tools to find relevant data. This is another situation where SellerApp’s Chrome extension provides a solution.
While on the Amazon product page, just open the extension to get estimated daily orders and revenue. If you track a product, you will also get access to in-depth product trends. Navigate to ‘Historical Data’ to get monthly trends for the following metrics:
This data will help you gauge the size of the market and the opportunity in front of you. Remember, if you manage to penetrate your competitors’ customer base, you could be making the money they make today.
Monitoring Amazon product prices will also help you understand your competitors’ pricing strategies. You can then create counter-strategies to undercut them. However, you need to ensure that your product is competitive and profitable. Be careful about engaging in price wars because it can cut down your margins.
You can also set price alerts to be notified whenever your competitor changes product price.
Your competitors will also be trying to adapt to the ecommerce marketplace and its various demands. That is why competitor analysis is an iterative process. You need to regularly monitor them and their strategies.
So, what are you waiting for? It is time to start analyzing your competitors!