The essence of market analysis is a group game behavior. Each Amazon seller will use the information he possesses to choose categories with large market capacity and low seller competition. This article will introduce how Amazon sellers conduct market analysis of their products.
1. Market capacity.
Market capacity determines the imagination of this category. The ten orders per day and the thousand orders per day categories have different attractiveness to sellers. Regardless of competition, the larger the market, the better the product category.
Market capacity consists of sales volume and customer unit price. The greater the sales volume, the higher the customer price, and the greater the market capacity. In terms of market capacity, niche products with large sales volume and high profit value should be selected.
2. The degree of brand monopoly.
Brand monopoly means that the brand occupies a position in the minds of consumers. Consumers’ attention resources are scarce. When some brands have completely occupied consumers’ minds, what about the products of new sellers? No matter how cost-effective it is, it is difficult to attract consumers’ attention.
3. Sales volume monopoly.
The degree of sales monopoly is another indicator of the degree of product competition. According to the Matthew effect, 80% of the sales of a general category are occupied by the top 20% of products. If 90% of the sales of a category are occupied by the top 10% of products, then new sellers need to compete with the remaining 90% of sellers. For the last 10% of the market share, this category basically does not need to be considered.
4. Sales of competing products.
Currently, when sellers decide to enter a category, they need to select target competitive products. These competing products are all sellers with their own strength. It will be observed whether these competing product sellers can succeed in this category in a short period of time. If these competing products can produce products in a short period of time, the seller will have a higher probability of success in this category. On the contrary, if these competing products cannot be launched in a short period of time, and instead fall into price wars and homogeneity, then sellers should be cautious about entering this category.
5. The strength level of the top 20 sellers in the category.
You can check the accounts of the top 20 sellers in the category and judge the strength of these sellers through the sales and rankings of the products listed on these accounts. The stronger the average strength of the top 20 sellers in a category, the lower the probability of success in this category. On the contrary, if the top 20 sellers in a category are all small accounts or new sellers, then the probability of success in this category will be higher.
6. Determine the product life cycle.
If most of the products in this category are in the new product stage or in the growth stage, then the level of competition in this category is not high, everyone has the same level and strength, and the probability of product launch is also high.
On the contrary, if most of the products in this category are in the mature or declining stage, on the one hand, the market growth space will be limited; on the other hand, the competitive market will shift from the incremental market to the existing market competition, and the existing market will It is a zero-sum game, and the entire market will eventually move toward price wars and homogeneity.
7. Determine the future trend of products.
Is the product a mid- to long-term product; a short-term event product, such as a mask or face shield; or a seasonal or holiday product. For these different types of products, the promotion plans and inventory plans adopted will be different. For a novice seller, event-type or seasonal products have very high requirements for inventory control and can easily cause inventory backlog. Medium and long-term products should be given priority.
8. Determine whether the product has the risk of infringement?
You need to check whether the product has appearance patents, pattern patents, etc. Products that are suspected of infringement need to be treated with caution.
9. Determine whether the product meets the real needs of buyers?
Determine whether the product meets the needs of buyers by analyzing the market sales of product substitutes and complementary products. If a product is a high-growth product, the sales of its substitutes and complementary products will also increase. If the sales volume of this product is only high, but the sales volume of its substitutes and complementary products are not high, then the possibility of a sharp decline in sales of this product in the later period is very high, and this product may be a product with false demand.
10. How difficult is it to obtain the product supply chain and is the product easy to copy? Does the seller have the ability to continuously iterate and micro-innovate?
When a product is very difficult to obtain and very easy to copy, and you can find a lot of it by searching on 1688, then when this product is put on the shelves, you will find that a large number of products will suddenly appear in this category. New seller. At this time, it will be very difficult to launch the product. Therefore, sellers must have the ability to continuously iterate and micro-innovate their products, so as to avoid the dilemma of homogeneity and price war.