How to Analyze Amazon Competitors
Whether you’ve been selling on Amazon for years or are looking for your first product to sell, competitive analysis can help you. In many ways business is like a game, with a number of players making moves to try to “win” customers and make profits. Most of the time, the most successful players are those who best satisfy customer needs. So rather than tuning your competitors out, pay close attention to who they are and what they’re doing. You can learn how they’re going about meeting customer needs and what you can do to offer customers more value. Let’s dive in and see how to analyze competitors and derive insights from that analysis for application in our own businesses.
Consider the Overall Competitive Landscape
As you begin to investigate the competitive landscape in your market of interest, you’ll first want to note how established competitors are in the market by considering how many reviews products have. The larger the number of reviews a product has, the more advantage they have in making sales and the harder it will be to “catch up.” Markets where the top ten products average over 10,000 reviews, for instance, present massive barriers to entry. Another very important consideration at the early stage should be observing which brands are at play in the market. Consider the Amazon market for “rock climbing shoes.” Although the top organic products have reviews ranging between 4 and 800- not insurmountable numbers- they are from brands like “La Sportiva,” “Black Diamond,” and “Scarpa,” which are each nationally recognized brands whose products can be found in stores like your local REI and sporting goods outlets. This means that competitors in the space have finely optimized supply chains and production processes with significant leverage in materials purchasing, as well as the all-important advantage of brand recognition and preference. You may be able to source a rock-climbing shoe at a somewhat competitive price, but until you achieve the same level of national success, your product is more unlikely to sell when up against those brands.
After simple and upfront considerations like those spoken of in the previous paragraph, competitive analysis involves developing an overall picture of competition in the market. Using a tool like Helium10, enter relevant keywords in Amazon and pull data on monthly sales for the products that appear in the search results.
As you can see, Helium10’s “Xray” tool provides details about products and sellers such as monthly sales and revenue. This data can be easily exported to .csv or .xlsx files for further analysis. I recommend going through this process for several of the market keywords with the most search volume and compiling all of the data into the same spreadsheet. With that data, you can glean information as to how many competitors (“brands”) have products that are listed on the first page of search results, how many specific listings brands have in the space, and whether sales are dominated by a small number of brands or spread more evenly across competition. Oh, and one more thing. This is very valuable in learning about sellers who are already on Amazon but doesn’t say anything about the potential threat of new entrants. Take note of who the biggest and best players outside of Amazon are and seek to determine the likelihood of them offering their product on the platform. In some cases, all you need to do is ask.
Build “Competitor Profiles” to Better Understand Individual Competitors
Armed with a spreadsheet of data gleaned from a tool like Xray (from Helium10), you can now build informative “profiles” of your competitors. Rank them in order of total sales from all the products they offer in the particular market. Then determine the following:
- How many total products do they sell on Amazon, and how many are in this market?
- How long have they been selling on Amazon?
- What is their monthly sales quantity and revenue?
- What are their best selling products, and how do their products in this particular market rank in sales volume compared to the rest of them?
- How much advertising do they seem to be running and how high in the sponsored product order do theirs appear?
The answers to these questions will give you valuable information on your competitors such as how experienced they are, how big of sales operations they’re running and how successful they are. Importantly, these profiles will also tell you how likely the competitor is to fight back against your attempt to gain market share. For instance, a seller with 20 products- where the product in your market of interest is one of their worst performers- is much more likely to ignore your product’s coming onto the scene than a seller for whom your market represents their most valuable sales opportunities.
Beyond such quantitatively derived insights, you can also learn a lot about competitors by making more qualitative observations. Search for the company online and learn as much as you can about things like who the company owners are, how experienced and knowledgeable their leadership is, where the office/s are located, and how many employees they have. The goal here is to discern their level of expertise and resourcefulness and determine whether you’re capable of matching it. How sophisticated and strategic a competitor is gives you a good picture of how challenging they will be to compete with. Other significant ways to consider the competition’s use of strategy include observing what social media presence the brand has, what other platforms they sell on, and how much effort they seem to put into driving traffic externally.
Further Scrutinize Top Competitor Products
Narrowing the scope of analysis to the most specific level brings us to detailed examination of products themselves. Depending on the market in question and your prior competitive analysis, hone in on somewhere from one to five of the brands with the most sales volume. For each of their products consider individual listings, reviews, and even purchase to test for yourself.
Amazon tools like Helium10 include tools like “Cerebro” that allow you to take a product’s ASIN and glean data related to how the product is performing and what keywords it ranks for.
Data like this is very useful in recognizing what target market a brand is aiming for, the style of their brand, and what keywords have been effective for them. With this knowledge, you can seek to replicate the good things they’ve done to gain success, but also exploit opportunities they may be missing out on. For instance, you could win sales from including relevant keywords in your listing (that you found in keyword research) that get search volume where a competitor’s listing doesn’t appear in results.
Consideration of their listing itself (photos, title, bullet points, description) and their product’s reviews will also key you in on tips for success and can also tell you what mistakes to avoid. Read the reviews for the top products and seek to understand what customers really want. Pay close attention to what they celebrate about a product, and even closer attention to what they complain about. Use the exercise to create a mental map of the various customer segments who buy the product. After considering reviews for each of the top products- and hopefully some less successful ones too (to understand why they don’t sell)- you’ll have an important foundational understanding of your customers, what they want, and how well your competitors are currently serving them. This process is extremely telling as to what opportunities you may have to better meet customer needs and offer the most value.
Lastly, many Amazon business coaches and consultants recommend purchasing at least one or two of the competitor’s products. One sale isn’t going to do much in giving them further advantage over you and having their product will show you what kind of quality the bestseller is currently offering. There is no better way to study your competition than with their product in your hands. In some cases, this is the moment of truth in a seller’s decision to go forward with launching a product or revisiting if not altogether abandoning the effort. All things considered, whoever offers customers the best value is likely to make the most sales.
From technical acumen in building a listing that will be highly visible and convert well all the way to customer service, it’s important to analyze competitors. The degree of sophistication evident in other brands will allow you to anticipate their strategy and your potential for success against their products. Competitive analysis serves two key functions: 1) help in the decision of whether to enter a market (or stay in one you’re in) and 2) give insights that will enable you to offer customers more value than your competitors. For the highest likelihood of success, do your due diligence and know who you’re up against when choosing to offer new products, and shrewdly develop and update your product and design your listing to better accommodate customer desires.