The business world today is full of endless possibilities where every product typically has hundreds or thousands of different sellers. With a huge number of marketplace sellers on Amazon and more joining every day, driving traffic to your products and listings has become challenging. For new and experienced sellers, taking time to do a comprehensive Amazon competitor analysis is the best way to get ahead of your competitors.
If you want to ensure prime success for your products, keep reading to find out more information on how to analyze your Amazon competitor research. Then, you can leverage this information to come up with a strong competitive edge and always stay one step ahead of your competitors.
What is Amazon Competitor Analysis?
Amazon competitor analysis is a process of understanding why your competitors are ahead. This includes analyzing your competitor's products, pricing strategy, listing quality, target market, ad campaigns, etc.
Amazon FBA sellers have a lot to gain from performing a competitor analysis. The value you get from analyzing your competitor's strengths and weaknesses can't be understated. There is a lot you can learn from your competitors.
Competitor analysis is the best way to get a competitive advantage over your Amazon competitors. Understanding your competitors and market will help you know how to make your products stand out. As a result, sellers are able to make more precise sourcing and marketing decisions for their products.
So, in this digital age, how do Amazon sellers get to know their competitors?
Who Are Your Amazon's Main Competitors?
When doing product research for your Amazon business, your direct competitor analysis should be one of the biggest considerations. The best way to find your competitors on Amazon business is to look at the search results page.
When searching your product ideas on Amazon, start with a broad keyword and see the search results. For a broad term, the competition will be quite high, but as you scale down to your specific niche, the number of direct competitors will greatly reduce. These are the competitors you should focus on.
For example, if your brand is selling clip-in human hair extensions, a broad term will be human hair extensions. Technically, all the human hair extensions that appear as results would be your competition. However, the main aim is to target long-tail and niched-down keywords that are more specific to your products.
If you go ahead and search for clip-in human hair extensions, then the results will show the specific niche and not the other different types of human hair extensions. Products that appear on top of your search results are your main competitors, and that's what you want to monitor.
Analyzing Your Competitors on Amazon
1. Find the Keywords Your Competitors Rank For
Optimizing your listings using Amazon SEO should be standard for any serious seller. Fortunately, the websites' search results algorithm is less challenging than that of Google. The foundation of Amazon SEO is said to be keyword research but there more factors that a company can use to rank their products.
For most cases, sellers will use a primary keyword in the product title, as shown in the example above. A keyword research tool is a great way to research your competitor's keyword choice. Fortunately, there are free tools like Sonar that allow you to understand your competitors' keyword strategy fast.
The competitors targeted keywords will help determine the keywords you need to use. If you want your products to appear in the searches, you need to ensure that you're using the right keywords and keyword phrases.
2. Identify the Competitors' Listings
Compile a list of the competitor's products and create a Google sheet that you can share with your team. You want to grade every feature in your product listing audit. Here are some important areas you should focus on;
a). Product Title
Amazon's recommended format of a product title should be Brand, Model, then Product Type. Take note of the phrases your competitors use within their titles.
Here is an example of different titles used for clip-in hair extensions.
Which one looks more appealing to customers? The first title would be recommended as it gives a better description of the product. The second title lacks the number of pieces in the pack as well as the size of the hair extensions.
Is there any crucial information missing from your competitor's product titles? Is there anything you can add or remove to make the product title better?
Apart from the titles, images are another huge selling point for Amazon. If you take a look at your competitor's product images, does the image stand out to you?
In the picture above, the image on the right is more likely to stand out since the human face, and the comb is a point of visual interest. So, you need to ensure you use high-quality images that are more visually appealing than your competitor's.
Here are some questions you should ask yourself;
- What product pictures are used in the listing, and what is their quality?
- Do the pieces feature product images that you could recreate?
- How appealing are the product images?
The description and the bullet points describe the features and benefits of the product. Is there any information missing from your competitor's product descriptions? The information should include the main product features.
Avoid fluff and filler words that won't be useful to the customer. The detailed description should be persuasive yet straight to the point. If a customer is able to find the information they are looking for faster, the more likely they are to purchase your product.
d). Product Q&A
Does the seller respond to shopper questions in the product question and answers section? Also, check the kind of questions the customers ask and be sure to include them in your product listing.
e). Review Assessment
You want to go through the product reviews from customers on the competitor's product listings. This gives you a competitive analysis of the competitor's weaknesses and strengths. Use the reviews to spot competitor weaknesses in the product and product listings.
When checking the reviews, you want to pay attention to several features, including how many reviews, quality, quantity, ratings, strengths, and weaknesses.
You can find loopholes from the competitors' reviews and ensure your brand doesn't have them for enhanced brand content. Amazon's algorithms prefer products with lots of high-quality reviews.
3. Find and Monitor the Competitor's Pricing
Price has a huge influence on the purchase decisions of customers in the Amazon marketplace. Similar to finding your competitor's keyword strategies, there are simple tools to research your competitor's prices.
Tools like Sellics, Priceyfy, and CamelCamelCamel allow you to monitor your competitors' prices. Although it is important that your business should compete with the product prices of your competitors, it is more critical that you ensure you're making a profit.
It is also crucial to know that the price history of a certain market will help you know the product's long-term viability. If the price of the product fluctuates constantly, then it is not a good idea to get into the market. Find products whose prices are stable enough to allow you to profit from them.
4. Analyze Your Competitors Branding
Most businesses will often overlook the competitor's branding when it comes to Amazon competitor analysis. Here are several ways you can use to assess the branding of your completion:
- Evaluating the brand content and the marketing content design
- Check the product design, labeling, images, and packaging
- Checking the language and tone used to describe product features in the Q&A section.
It's is worth evaluating the competitor's brand, especially if you share the same audience.
You also want to look at the competitor's Amazon store, which acts as a microsite for brands as it provides customers convenient access to all your products. Here are some features you want to look out for;
- Design- While Amazon provides several Amazon store templates, the design a company chooses may provide you with some insight into the competitor's strategy.
- Product Display- With Amazon Store, you can either use pre-programmed widgets or hand select your products. You might find that your competitor uses a widget for marketing their best-selling products.
- Social Media Presence- Amazon stores have social media links that may you see the platforms your competitors are using more.
5. Track the Monthly Sales of Your Competitor
Another great way of determining the competitive analysis of your primary competition is by checking their monthly sales. You need to understand how much inventory a competitor moves every month. This way, you can determine if they are underselling their products and how much they are making,
There are several tools you can use to track your competitor's sales. For example, Sellics will provide real-time sales data and also includes price monitoring and other features. Jungle Scout shows you an estimate of the average monthly sales of your competitor. Also, the Product Tracker tool can help you track the average sales, best seller rank, and revenue of a product.
With the research, you're able to compare your sales and your competitor's sales. As a result, you can estimate the potential profit you can achieve when your brand because of a more competitive choice for customers on Amazon.
6. Identify How the Competitors Market their Products
Checking your competitors' ad campaigns is a great way to finish your Amazon's competitive analysis. Identify the keywords your competitors use in their ads. What are the search volume, competition, and cost per click of such keywords?
With an insight into the competitor's advertising campaigns, you get a competitive edge, and you're able to build a better one. For instance, you can use long-tail keywords instead of short-tail keywords as they have a lower CPC and allow companies to lower the Advertising Cost of Sales (ACoS).
Furthermore, the strategy helps companies connect with their target market. It also contributes to the increase in profit and review that can help improve ranking in search results.
Benefits of Conducting A Competition Analysis
Although an Amazon competitor analysis may feel like lots of work, there are many benefits that come with conducting one. Researching your direct competitor's ad campaigns, targeted keywords, products, reviews, etc., is a great way to;
- Make accurate choices when it comes to your portfolio
- Ensure your pricing is competitive
- Track your performance and profitability
- Optimize advertising campaigns and increase efficiency when it comes to ad spending.
- Gain insights on how to make your products stand out from the competitors.
Researching and analyzing your competitors' strategies will help you understand what you're up against. However, with no knowledge of the Amazon competitor analysis, you will have a challenging time thriving in the Amazon business. Hopefully, this post has helped you do an in-depth evaluation of your competitors' or potential competitors' weaknesses.
Frequently Asked Questions (FAQs) on Amazon Competitive Advantage
1. How do you conduct an Amazon competition analysis?
In summary, here are some steps you need to follow to analyze your competition;
- Identify the competition and find your competitors using Amazon's search results.
- Categorize your competitors into either a primary competitor who you target a similar audience, a secondary competitor who targets a completely different audience, or a tertiary competitor who sells a product related to yours but not the same.
- Identify their market positioning and market share. What is the main reason why customers buy from them and not other online sellers?
- Review their social media, website, and other web services.
2. What are the types of competition on Amazon?
The competition on Amazon can be divided into three main groups including;
- Primary Competition- These companies sell a similar product to yours and have the same target audience as you.
- Secondary Competition- The companies provide a low-end or high-end version of the product you're selling. They sell a product that is similar to yours but to a different audience.
- Tertiary Competition- These companies sell a product that is related to yours or is in the same category as yours, but not the same product.
3. How can you gather information about your competitors?
Here are a few tips to help you get relevant information about your competitors;
- There are a lot of competition analysis tools that provide you an insight into your competitor's products, sales, pricing, and market positioning.
- Follow their social media pages, their blog, and subscribe to their newsletter.
- Buying an item from them will give you a better view of their services and product quality.
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