Amazon product life cycle and characteristics analysis of each stage
On the Amazon platform, product sales are affected by multiple factors such as market competition, customer demand, and seasonal changes. However, as a whole, most products go through a life cycle from growth to decline. In this life cycle, products are usually divided into four stages: introduction stage, growth stage, maturity stage and decline stage.
During the introduction period, new product development expenses account for a relatively high proportion and market performance is relatively average. Therefore, a large amount of marketing investment is required to attract early customers to try the product. At this time, the ranking of the listing is usually low, fluctuates greatly, and does not show an upward trend. As time goes by, the product enters the growth stage, sales increase rapidly, production costs begin to decrease, and the market’s acceptance of the product gradually increases, but it will also attract many competitors to join. At this stage, the listing’s ranking fluctuates less, and the overall ranking performance is improving, showing an obvious upward trend.
The maturity stage is the stage when the product gains market recognition. At this time, the output of the product is further increased and the cost is gradually reduced. In order to avoid homogeneous competition, manufacturers often increase investment in product quality, specifications, functions and packaging to maintain their competitive advantages. During this period, listing rankings remained high, fluctuations were low, and overall performance was stable.
Eventually, the product enters a period of decline, when better substitutes may appear on the market, causing the product’s sales and profits to continue to decline until it eventually exits the market. At this stage, the listing ranking develops from high to low, showing a downward trend, and the overall performance is poor.
It should be noted that due to the customer review system on the Amazon platform, the life cycle of many products may be extended. For example, some products with more than 5,000 reviews will be able to maintain a high sales ranking for a long time if they can continue to maintain their quality. This shows that by comparing the two dimensions of time and sales, sellers can effectively speculate on product development trends and take appropriate operational measures to maximize profits.