How Much Competition is Too Much on Amazon? – Amazon Seller Podcast Ep. 29
Today’s episode focuses on one of the most puzzling questions Amazon sellers, and especially Private Label sellers wrestle with while selling on Amazon, and that is: How much competition is too much on Amazon?
There really is no one principle that applies to everything when it comes to analyzing the competition. So much goes into determining which products should be pursued and which ones sellers should learn to avoid.
The following red flags should be considered when thinking about how much competition is too much:
- Avoid competing with products that show up on many pages and that look mostly identical. These products are saturated and will not allow your product to stand out. Most likely, the listings will be very similar and it will be difficult to differentiate one from another.
- Avoid banking on a ‘magic number’ of listings that will boost your sales. The law of ‘supply and demand’ is still the tried and true way to gauge the market. Do your research and balance the number of searches a month, and the variety of key words with the amount of sales for that particular product. Is there more demand than there is supplier listings? Or is there too much supply and not enough customer searches?
- Avoid bringing brand new products to Amazon that aren’t anywhere in the Amazon catalog. It is risky to bring in a product to the Amazon market that you don’t have an idea if it will sell. There is very little research you can use to gauge sales. If your product is brand new, you aren’t able to compare keywords that drive people to your listing, and you have no comparison for how products rank if yours is the only one.
- Avoid competing with listings that are optimized, have great images, and a lot of awesome product reviews. You don’t want to compete with a seller that is dominating that space with a unique, well thought-out product listings, and hundreds of excellent review.
Now that you understand which strategies to use to say “no” to a potential product, the following are tried and true research strategies for jumping into a competitive marketplace with confidence:
Understand the ‘Uniqueness of the Niche’!
- Find and mine Amazon’s data to see what customers are already purchasing.
- Research the catalog and look for the riches in the niches. Examples of a good niche might be road cycling supplies (i.e., headlights, gear, cycling type accessories, etc.) because it’s unique, or uncommon sports and outdoor equipment (ie., rugby equipment, lacrosse gear, beer pong or dart supplies) something that is different and a bit uncommon in the U.S.
- Jump on unique listings that are under 1,000 in rank and only show up on a few pages of search.
- If a listing is Merchant Fulfilled it might be a promising listing to jump on and compete with because MF does not compete well with FBA.