Product selection starts with market capacity, first analyzing the potential sales volume of goods and services, which is determined by the scale and structure of actual display or future demand, and the total capacity of social demand that is satisfied through buying and selling. If the market capacity of similar products in a region exceeds 100,000 orders, or the market value exceeds 100 million US dollars, it can be rated as having a large market capacity. Market capacity and scale determine the company’s development space and later financing space. If there is no market capacity, and only relying on corporate efficiency to drive economic growth, there is a huge risk of economic imbalance. We can simply divide the market capacity into red ocean categories and blue ocean categories.
Red Ocean Category
Red Ocean categories refer to categories with fierce competition. The TOP100 listings in the Amazon category node have monthly sales of thousands and an average of thousands of comments, which are basically red ocean categories.
In addition to checking the category, the most direct way is to directly search for the product’s keywords on the Amazon page and judge the degree of competition of the product through the search results. For example, juicer and wireless bluetooth headphones, the search results for juicer are 624, and the search results for wireless bluetooth headphones exceed 10,000. The search results can illustrate the degree of competition of the product.
We use AMZ software to analyze the data of the TOP50 of the category. The average sales volume is tens of thousands, and the average comments are tens of thousands. The degree of competition in this category can be imagined. If sellers want to make products in the red ocean category, they need to analyze the characteristics of the operators. The seller redesigned the product and clarified the advantages of the product, but the operator is conservative, and it will be difficult for the seller’s product to stand out in the red ocean. Red ocean category products have certain requirements for operators, such as strong aggressiveness, high execution, fast changes, abundant resources, and strong risk resistance.
Blue Ocean Category
Amazon blue ocean category refers to an unknown market that has not yet been discovered by sellers and has relatively small competition. For example, in the TOP100 of Amazon category nodes, the average number of comments on listings is less than 100, or the sales volume is in an upward period and there are few sellers. If you enter quickly, you can get orders. Note that blue ocean categories do not refer to those categories that have always had low traffic, but rather categories with a growing market trend in the future.
For blue ocean category selection, the product selector must have a high market sensitivity, understand the information gap between regions, and be familiar with the industry for a long time, such as marine flashlights and safety lights. According to my observations in recent years, the sales of this category have continued to rise, but the sales volume will not be very large. It is a niche category with relatively less competition. It has been observed that some special equipment has high prices, considerable profits, and monthly sales can exceed 1,000 orders. If there are breakthroughs in product research and development, there will be great opportunities.
Selecting products based on the market capacity can determine the extent to which future sellers will invest human, material and promotional resources in the brand.