Maintaining a competitive edge on Amazon is no easy task. Especially if you don’t keep regular tabs on your competitors and your market share.
To succeed in a market like Amazon, you need to monitor and anticipate your competitors and track the market share of your chosen sector. If you don’t carry out a routine competitive analysis yet, then you need to start. Your competitors are probably already keeping tabs on you.
As a trusted Amazon agency, we constantly monitor our clients market share and competitors to ensure that they are one step ahead.
In this blog, we will explore how to keep a competitive edge by monitoring your market share and having an effective Amazon competitive analysis. This will help you be agile and continue to be a success within Amazon.
Market tracking and why it is important
As a trusted Amazon partner, we recommend to all our clients that they measure and understand their market share on Amazon, which isn’t as simple as looking at your sales growth versus total market growth.
If you know a product’s sales ranking, you can use a simple formula to estimate your sales, but you can’t calculate your market share on Amazon as simply as that.
To get a more accurate idea of our market share within Amazon, you need to take a few extra steps. You need to see how your products are performing year over year in comparison to other sellers and the eCommerce market. This means looking at your actual market share on Amazon by category and item, and over time.
Only then can you begin to grasp where you stand and, more importantly, begin to implement the right strategies to compete in the marketplace in a meaningful way.
Here are our top four tips to help you find your Amazon market share:
- Learn the current value of sales coming from online channels, within your category
- Gather expected growth of online sales within your category
- Calculate the Amazon-specific share of sales, by category, using historical data
- Measure this total against your company’s current and historical Amazon 1P/3P sales
Track and monitor your competitors
You can easily review your competitor’s performance and scope out the competition by monitoring the best performing brands. By gathering competitor’s data, it helps you gain a clear image of where your business is positioned in the market. The benefit of monitoring your competitors include:
- It gives you an idea of how you’re doing in comparison to your competitors.
- Keeps you informed of actions and activities they may be undertaking (discounts, listings changes).
- Monitor and estimate their sales.
- Benchmark your market share against theirs over time.
- Benchmark your organic search performance against theirs over time (and compute Share of Voice).
Once you know who your main competitors are, it’s time to identify their strengths and weaknesses and develop your strategy to be better than them. Below are our expert tips on how to monitor competitors.
Audit your competitors’ listings
This is where you can identify potential weaknesses within your competitors’ listings. Do photos have poor image quality? Are listings missing specific product information? Do products have a sub-par rating?
You can learn from what your competitors are doing in terms of listing optimization and use this information to make your listing even better. Here are the components of a listing to closely inspect in your audit:
- Bullet points and descriptions
Pricing is a crucial factor as it’s one of the deciding factors in your customer’s decision to buy. The increasingly saturated Amazon marketplace points towards the fact that more and more sellers are changing prices frequently. It’s important to understand your competitor’s pricing strategies to avoid price wars.
With that being said, you still need to make a profit. It is important to understand the price history of a particular market to determine a product’s long-term viability. If the price of the product you’re selling or are interested in selling fluctuates frequently, it may not be a good market to get into.
Tracking changes in a product’s keywords rankings is a good way for you to benchmark your performance against your competitors and extract insightful learnings from how they are piloting their Amazon business.
It allows you to discover the keywords for which your competitors’ products are ranked and track how their ranks change over time. You then get to compare those findings to your products and better understand from where they drive sales as well as how their SEO efforts, pricing positioning, PPC strategy, and other advertising techniques might be explaining the gap between their performance and yours.
Without knowledge of the competitive landscape, growing your Amazon business will remain challenging and place you at a disadvantage to others. Researching your competitor’s sales and marketing strategies helps give you a better understanding of what you are up against in the Amazon marketplace and offers you a competitive edge.