With how savage the competition on Amazon has become, it will be no stretch to describe the internet’s biggest marketplace as a warzone. Thousands of online sellers are constantly fighting for the attention of consumers. When it comes to eCommerce warfare, as with all warfare, one rule rings true – know your enemies.
So, in this digital age, how exactly do eCommerce sellers get to know their enemy?
The most effective way to do it is through an in-depth competitor analysis.
By analyzing what your competitors are doing, you’ll know how to stand out and outperform them.
There’s A Lot To Learn From The Competition
“You should learn from your competitor, but never copy. Copy and you die.”
~ Jack Ma, Executive Chairman of Alibaba
To learn from the competition, you need to break down their online presence and thoroughly understand their overall approach.
You can then leverage this knowledge to develop a strong competitive advantage and sustain that advantage by always being one step ahead.
What You Can Gain From Tracking Your Amazon Competitors
Amazon FBA sellers have much to gain from performing an Amazon competitor analysis. The value of the insight that can be gained from your competitors’ successes and failures cannot be understated. Having a thorough understanding of the competition allows one to:
- Improve the precision of portfolio scouting and sourcing decisions
- Optimize advertising campaigns and maximize the efficiency of ad spending
- Improve performance and profitability tracking
How to Conduct Your Competitive Analysis
Identify the competition.
You can’t analyze the competition if you don’t know who your competitors are. Knowing the competition will let you:
- Use their strengths and weakness as a guide on what you should and shouldn’t do.
- Better understand the Amazon FBA landscape and how to position your business above the competition.
- Keep track of the competition so you are never caught off guard and can stay one step ahead.
Find Your Competitors
Making full use of Google and Amazon search engines is one of the fundamentals of how to do competitive analysis as an Amazon FBA seller.
Here’s an example of how to leverage the immense power of these two search engines to cast and wide net and get an accurate view of the current competitive landscape of your chosen industry:
- Go to Amazon and search for your planned business name, product ideas, and overarching business ideas.
- Take note of the top results as they will most likely be ones you’ll have to compete with.
- Go to Google and search for the different social media channels, organizations and online communities of each of the competitors you’ve listed in the previous step.
- Utilize a combination of free and paid tools to find more information on your competitors. Such tools may include:
- SpyFu – a competitor analysis tool that helps you research and download your competitors’ most profitable keywords.
- SEMrush – a tool that helps you to conduct competitive research on any domain name and to use the data to optimize your campaigns.
- SimilarWeb – a competitive analysis tool for digging into a site, app or platform.
- Alexa – a tool that provides deep analytical insights to compare and optimize businesses on the web.
- Keyword Competitor – an all-in-one competitive analysis tool that shows you keyword opportunities that your competitors have been ignoring.
- Social Mention – a tool that provides real-time search on brand mentions.
- Rank Signals – a backlink checker tool that helps you uncover SEO backlinks & traffic sources of your competitors.
- Buzzsumo – a social networks tracking tool that helps you find the most shared content for a given topic.
Categorize Your Competitors
After finding the competitors you believe will be a threat to your Amazon FBA business, it’s time to segregate them. You can divide them into three main groups based on their threat level:
1.) Primary Competition
- Targets the same audience as you or;
- Sells a similar product to yours
Example: A Nike retailer is a primary competitor of an Adidas retailer.
2.) Secondary Competition
- Offers a high-end or low-end version of your product or;
- Sells a similar product to yours but to a completely different audience
Example: A Rolex seller is a secondary competitor to a Timex seller.
3.) Tertiary Competition
- Sells products tangentially related to yours
Example: A seller of gems and precious stones is a tertiary competitor of a jewelry seller.
Find and compile the following information for each competitor:
- Name of store
- Mission statement (if available)
- Product offering
- Strengths and weaknesses of their business
- Category of competition
Examine your competitor’s website & customer experience.
Now that you know the basic information about the competition, it’s time to dig a little deeper.
Take a closer look and put yourself in their customer’s shoes. You can do this by finding the answer to relevant and important questions such as:
- How good are their product images? How do they communicate the details of their product?
- How detailed are their product descriptions? What information can be added and what information can be omitted?
- How are their calls to action presented throughout the online shopping experience? Do they feel organic? Are they easy to notice?
- Do they have an email capture strategy such as a newsletter subscription opt-in? If yes, how prominent is it?
- Where are their social media buttons positioned?
- Do they maintain a blog? How often do they post? What type of content do they publish?
- Is their website optimized for mobile users?
- What are the available ways of contacting them? Do they offer 24/7 customer support?
- What is their average response time to emails, live chats, and contact form submissions?
- Do they have reengagement strategies such as an ‘Abandoned Cart’ feature? If yes, how do they tell their customers about it?
- What information do they include in their marketing banners and callouts?
- How often do they run promotions such as discounts and freebies?
Knowing the answers to these questions will help you identify what competitive advantage you have over your competitors.
Identify your competitor’s market positioning
Understanding the positioning strategy of your competitors will give you valuable insights into the prevailing demands and expectations of your target market. Knowing how your competitors position themselves will give you an idea on how to position yourself against them.
To do this, you need to look at their website and messaging and answer these three simple questions:
- What is the main reason customers buy from them? Is it the price? Is it the experience? Or is it something else entirely?
- How do they differentiate their product from that of their competitors? What feature/s and benefit/s do they highlight the most?
- What, according to them, makes their product unique?
Here are a few tips to help you gather as much relevant information as possible:
- Sign up for their newsletter and check out the messaging of their newsletter campaigns.
- Subscribe to and follow their blog. Look at what type of content they publish and what tone they use.
- Follow their official social media pages and analyze how they communicate with their followers.
- Put an item into your shopping cart but do not complete the checkout process. Wait and see whether or not they will try to convince you to complete the purchase. Study the language and structure of each email in their ‘Abandoned Cart’ email series.
- Purchase a product and analyze it. Determine how it compares with your own product.
Take a peek at pricing.
Your pricing strategy can make or break your Amazon FBA business.
There are numerous factors to consider when setting the price of your products. You can use the way your competitors priced their products as a reference.
Doing so will give you an idea on how much your target consumers are willing to pay. Check their prices on both Google and Amazon.
Keep in mind that your prices don’t necessarily have to be less than your competitors as long as you offer something they don’t. That extra value can come in the form of peace of mind, expedited shipping, better buying experience, etc.
Don’t forget to factor your startup and operating costs when setting your prices. It is essential that you earn enough to profit to make your time as an Amazon FBA seller worthwhile.
Take a temperature check with reviews.
Find out what consumers are saying about your competitors’ products and the overall customer experience they provide.
You can gauge the health of an ecommerce business by how good or bad the online word of mouth about it is. The number of available reviews also indicates how much interest consumers have on a particular product.
Knowing this information is essential to identifying the best items to sell on Amazon FBA.
Check the reviews on the competitor’s Amazon product pages, on their website, on review sites, and on social media.
Read the comments left on their blog posts too, if you can.
Customer reviews might show you something you can capitalize on or give you hints on something you have that you can turn into a competitive advantage. Identify the things consumers complain about.
Find ways to ensure they won’t make the same complaints about your product.
Review their social media.
Taking a closer look at a competitor’s social media accounts can tell you a lot of things.
The number of followers along with how much they talk about the product tells you how viable that product is.
You’ll also learn the general consensus consumers have about that competitor’s business. You’ll see which attempts at engagement fail and which succeed.
Check out as many social media accounts you can find for each competitor. Use the following questions to gauge how strong or weak their social media presence is:
- How would you define their overall social media presence?
- What social media channels do they use the most?
- What tone do they use when speaking with their followers?
- What are they posting and how often?
- How often do they post something new?
- What relevant social media channels do they ignore?
- What percentage of posts talks about their business?
- What percentage of posts is aimed at increasing engagement or attracting new followers?
Amazon is the largest online marketplace on the World Wide Web. It is also the most competitive.
Fortunately, you don’t necessarily have to start from scratch.
You can use the trials, failures, and success of your potential competitors as stepping stones for your own Amazon FBA business.
Your competitors are goldmines of valuable information. They can give you an idea of what the best items to sell on Amazon FBA are. They can tell you what you should and should not do. They can give you ideas on how you can differentiate your brand.
Understand your competition and Amazon FBA success will be well within reach.