The Amazon marketplace can truly be a challenging, sometimes even hostile environment for sellers at times. It requires constant development and adaptability if you want to stay profitable and competitive, so keeping your finger on the pulse of your competitors is always a good idea to get (and stay) ahead.
Competitor analysis requires thorough research of your competitors. This includes identifying who your competition is as well as their marketing strategies, products, and more. Such information will help you gather vital information and determine what your competitors are getting right or wrong, and how you can improve your own business strategies. This process is so underrated that most newbie Amazon sellers will skip it, ignoring that it’s one of the keys to making your product unique and evergreen.
From finding the unique selling proposition of your product to creating the perfect brand store, a thorough competitor analysis will undeniably help you improve your brand’s perceived value.
Why Should You Conduct Competitor Research?
You don’t want to lose your sales to a competitor because their product and store look better than yours.
Conducting competitor research will help you understand your competitors’ core offers, unique selling points, and overall marketing and customer experience processes. This will also help you build up your brand by resonating with your target market and creating a more “fine-tuned” approach to your product descriptions, bullet points, Amazon posts, and more.
While Amazon seller competitor analysis can be a time-consuming endeavor, getting a clearer understanding of your niche will make it worthwhile. Doing so will enable you to:
- Price your products appropriately
- Optimize your keyword strategy
- Determine how your listings are performing in comparison to your competitors
- Decide which products to sell
- Identify and fill market gaps
How Do You Perform Effective Competitor Research?
Know who your competitors are
By knowing your competitors, you can easily monitor and compare data accurately. Knowing your competitors will help you find their selling angles, strengths and weaknesses, and what their customers think about their products.
Once you spot an area for their improvement, use it to create the right product that works best for your target market.
So, how can you do this?
You can start by dividing your competitors into direct and indirect competition.
Direct competitors are sellers offering products that could be a substitute for your product and have the same brand benefits, USPs, composition, ingredients, or effects.
Meanwhile, indirect competition can be products that are not completely the same, but may solve the same problem your customers are facing. It’s critical to keep these brands on your radar because they can steal your market share if they continue to add more product offerings that grow them into a line of direct competition.
Because the market continues to change, and more and more Amazon sellers are joining the platform each day, you’ll frequently want to conduct a competitor analysis.
Know what types of products your competitors are offering
You need to know what products your competition is bringing to the table to solve your customers’ pain points.
You’ll want to take a look at their complete product offerings, brand extensions, and their products’ unique benefits.
Take note of your competitors’ pricing too, and any discount or promotional features they are using to attract customers.
Some things you might want to consider may be:
Is their product a high ticket or a low ticket?
What makes their product high in perceived value?
Are they working on volumized sales, or do they make most of their profit from one-off transactions?
What’s their best-selling product?
What’s their worst-rated product?
How often do they add products to their catalog?
How are they different from other competitors?
How do they handle negative feedback?
Getting these insights will help you craft your product’s competitive advantage.
Find out about your competitors’ sales techniques and how much they are making
For laser-focused competitive analysis, further considerations may be needed. You can use a profit analyzer such as Helium 10 to find out competitors’ potential revenue, but in order to understand their strategies, you need to know:
What are their target demographics?
Are they selling through other channels aside from Amazon?
What type of selling program are they currently using?
What makes their product “shoppable”?
What are their customers saying in their reviews?
How much do they make each month?
What keywords are they using?
What keywords are they bidding on?
These questions will give you insight into how competitive their sales and ranking is, and what information you need to adapt in order to convert more traffic.
Take a look at your competitors' unique selling points and product benefits
At the end of the day, it’s all a matter of selling your product based on what it can actually do. This is why knowing the perceived value of your product matters; it gives people the impression of what to expect as a result.
If you feel that your product has superior features compared to your direct competitors, you might want to sell it with more than 70% markup. However, if you do raise your product price, make sure that it surpasses the standards set by other products that will be a direct substitute in case your buyers shop around to find something else.
Analyze your competitors’ product catalog and overall branding
Do an audit of your competitors’ listings and branding strategies. When conducting a competitive analysis, taking a look at their overall brand aesthetic, images, and infographics will help you pinpoint the angles in which your brand can stand out.
It may be beneficial to enlist the help of a professional graphic designer and/or photographer to enhance your product’s overall appeal.
When doing competitor research, also consider the following questions:
What are their color palettes?
What is the psychology behind their colors?
Are they showing diversity in their product categories?
Do they target their audience based on the creativity they’re employing?
Do they utilize helpful infographics that demonstrate how to use the product?
Do they have comparison charts?
Do they highlight the product’s key features and benefits, and if so, what other benefits and features can you “sell” to your customers that your competitors don’t have?
Observe how your competitors manage their audience both on and off Amazon
Apart from learning how your competitors function and perform on Amazon, knowing more about their overall online presence and how they keep their community engaged will help you strengthen your branding.
Take a look at their social media channels, their posts, groups, and their overall presence.
Consider these questions:
Do they have strong social proof?
What is the tone of their brand voice?
Do they offer frequent product promotions?
How do they respond to their community?
How do they nurture their buyers?
Do they provide post-sale service (including social media support)?
Are they quick to respond to customer feedback?
How frequently do they post on social media?
Do they run ads on social media aside from Amazon PPC ads?
This will help you gauge how you can elevate your community into faithful followers who will rave about your next product.
Perform a SWOT analysis to reveal how you can outcompete your competitors
As you go through your competitors’ listings and overall brand details, you will need to perform a SWOT analysis while comparing your own brand to them.
Take note of your competitors’ Strengths and Weaknesses, your Opportunities for creating a better product offering, and the Threats that may overthrow your product.
Here are some of the questions to keep in mind:
What are the unique selling points of your competitors?
What selling points can you use to differentiate your product?
What does your competition have that your brand doesn’t (and vice-versa)?
What are your competitors’ weakest areas?
Can you determine the weakest link in your competition and leverage it to strengthen your brand?
By asking yourself all of this, you’ll be able to use their weaknesses and strengths to highlight your own unique selling proposition and create a superior product with better sellability.
Gaining a better understanding of your competitors on Amazon is a must to be successful long-term. Without knowledge of the competitive landscape, you will have a hard time growing your business. Creating a product that stands the test of the market and increases your conversions starts with knowing from the source how best you can stay competitive.
Researching your competitors’ sales and marketing strategies allows you to develop your product, storefront, and overall brand appeal.
Do you want to create more brand traction for your Amazon brand? Let’s discuss more about analyzing your competitors on Amazon. Reach out to Rank N Bank today!