When fishing, you should choose a pond with fish; when selecting products, it is an essential step to analyze and evaluate the market capacity. There are many ways to evaluate the market capacity of a product, among which the product evaluation method is the most convenient and practical. The specific operation of the product evaluation method is as follows: after initially selecting a product, search with core keywords and then summarize the number of reviews for each product in the search results, multiply the total number of product reviews by the reference coefficient, and the resulting number is the rough total market sales of the product on the current site.
When using the product evaluation method to calculate market capacity, you need to pay attention to the following points.
The reference coefficient refers to the ratio between sales and the number of consumer reviews, which needs to be set based on your own experience. Taking the US site as an example, the ratio of reviews for most categories is about 130:1, which means that 130 orders can receive one product review. Therefore, when doing market research on the US site, you can use 130 as the reference coefficient. After searching with keywords, the actual number of products displayed and the number of search results prompted by the system will be very different. Some search results only display 7 pages. This is the setting of the search engine. We don’t have to worry about the distortion of the statistical results due to too few products displayed, because the products with sales are basically concentrated in the first few pages of search results, and the sales of products in the subsequent search results are very few or even no, which can be ignored. From this perspective, 7 pages of search results are enough.
Since the evaluation of the product is accumulated from the receipt of the first evaluation, and the premature evaluation does not have much reference value for the current sales and market capacity assessment, when counting, it can be sorted by time and the number of evaluations in the last three or six months can be calculated.
After the number of evaluations is counted, multiply it by the reference coefficient 130 to get the approximate total sales of the product, and then average it to each day to know the daily sales of the product on the current site. Knowing the daily sales of the product, we need to make an expected judgment, predict the market share we can get from operating the product, that is, the sales expectation, and then think about whether such a large “cake” can meet our operational expectations.
Of course, evaluating market capacity and sales expectations in this way is still a little abstract for some sellers. If we want more accurate data, we can do one more thing: find out specific competitors, calculate the daily sales of competitors, and then ask ourselves whether we can stand in the position of current competitors. After counting the market capacity of a certain product, the next step is to evaluate the sales of the products ranked under the small category node of the product, as well as the sales of products in different ranking positions such as the 5th, 10th, 20th, 50th, and 100th. For the sales evaluation of specific ASIN (Amazon standard identification number, which is automatically assigned to products by the system, similar to our ID number), manual calculation can be used or third-party tools such as Keepa and JungleScout can be used. According to these statistical data, we can know that in the current stock market, the sales of the first place are the “ceiling” of our sales, and the sales of different rankings are what we have to experience. We can know the sales volume we can achieve when we reach a certain ranking, and we can also know how much sales volume is needed to reach a certain ranking. Although such figures may not be absolutely accurate, they are of great reference significance for evaluating the operation of a product.
For example, after evaluation, we know that the average daily sales of the hot-selling products in the category is 100 pieces. We can understand it as if the product is created, the maximum sales expectation is to sell 100 pieces a day. If the evaluation shows that the 100th seller only sells 2 pieces a day, then you should know that you can only have a chance to enter the top 100 if you sell 2 pieces a day. At the same time, to enter the top 100, you must sell at least 2 pieces a day.
In other words, even if there are 40,000 search results for a certain keyword, if the daily sales of the 100th seller are evaluated to be 2 pieces, then the products ranked after the 100th basically have no sales, and there is really no need to see every product information after the 100th. This is one of the reasons why the Amazon platform does not display all search results.
In addition, even if it is evaluated that the seller with the highest sales of a certain product has 1,000 orders per day, and the seller ranked 100 has 200 orders per day, don’t be too excited. You also need to evaluate whether your financial strength and operational capabilities can cope with the market competition of the product. After all, I have seen too many small sellers choose aromatherapy machines, humidifiers, Bluetooth headsets, Bluetooth speakers and other products that can have thousands of orders per day, but lose one or two million yuan a year, or even more. Through the evaluation of market capacity, choose products suitable for your own operation and creation. If you can think of this, the probability of success will increase a lot from product selection to creation.