With the COVID-19 crisis still hampering businesses all over the world, selling on Amazon can be a good lifeline for your business. However, with over 2.5 million active sellers* on the platform today, you will need to do more than just post your goods.
In fact, if you’re a new seller, the cards can actually be stacked against you. As a new merchant, you likely will have any ratings or product reviews. Because of this, customers won’t have any information to verify your trustworthiness. If you are selling products that are also offered by a more established merchant, chances are, a customer will choose your competitor.
The good news is, you can do something about it. The best way to succeed is by basic competitor analysis and learning how best to optimize your listings. This way, you’ll have a better chance of increasing your sales on the platform.
Doing a Basic Competitor Analysis
To do a basic competitor analysis, follow these five simple steps.
- Know your audience
Another merchant could be selling the same products as you without being a direct competitor. This is true for sellers who are trying to sell to different demographics and marketplaces.
To differentiate yourself, you should consider customizing your messaging to help your customers find you. For instance, if you are a US-based clothing merchant wanting to reach the UK, you may want to include an alternate size chart.
- Identify direct competitors
One quick and easy way to find your direct competitors is to search for your products like a customer. You will likely see a lot of more established merchants who are selling identical or similar products as you.
- Analyze competitor keywords
One tool that Amazon brand managers use is mining competitor listings for keywords. Since Amazon products show up on Google search, you can apply basic search engine optimization techniques to your Amazon listing.
The easiest way to do this is by taking note of how your established direct competitors are writing product descriptions. You can use this as a springboard for your own copywriting efforts.
- Read customer reviews for insight
Reviews are written by regular customers who probably use the same keywords while doing searches. By reading customer reviews, you may come across a few phrases that will take you closer to customers. You can then use these phrases in your product descriptions, which will greatly enhance your chances of being found by customers.
- Look at competitor pricing strategy
Pricing your goods competitively is a crucial aspect of running an online business. However, in Amazon, adopting a pricing strategy that works for you can mean the difference between success and failure.
When Amazon business consultants talk about pricing strategies, it usually involves the coveted buy box. The buy box refers to the white square on the right side of the Amazon product detail page, which contains the “Add to Cart” and “Add to List” buttons.
The choice of which seller wins the buy box for a certain product is determined by Amazon’s algorithm, which favors sellers with excellent seller ratings and prices. If you were on equal footing, you could simply lower your prices to win the buy box. However, since your competitor is likely doing the same, you will need to closely monitor their prices to maintain your position.
Grabbing the Amazon Buy Box
As a new seller with little to no seller ratings, it will be difficult for you to grab the buy box for a significant amount of time.
However, you still have two options that you can try.
- Aggressive Repricing – Suitable for undercutting your competition, aggressive pricing means constantly monitoring the market for fluctuations. Once you see a dip, you can match the lowest price to attract buyers. This pricing strategy can be done manually or with an automated tool that monitors the fluctuations for you.
- Stable Pricing – While aggressive repricing works for some sellers, it can also have a backlash. Many discerning customers are suspicious of merchants whose prices are very unstable. However, this doesn’t mean that you should never adjust your prices. Some occasions like new product launches and holiday seasons demand a price change to stay competitive. In all other cases, sellers who subscribe to this strategy keep their prices stable.
Constantly monitoring your competitors on Amazon is the best way to increase your sales and grab higher rankings. As you get more experience, you will be able to make better business decisions that will help you flourish on the platform. Remember, even the top Amazon sellers had to start from scratch.
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*According to Oberlo.com
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