“If you know both the enemy and yourself, you will fight a hundred battles without danger of defeat.”
Before launching your brand on Amazon, you should ask yourself a list of questions. These include:
Which product should I choose?
What’s the right price?
What’s my chance to beat competitors?
If you don’t have clear answers to these questions, you should conduct a thorough market analysis. Launching a successful product starts with thorough product research. Based on the Oceanwing expert team’s past experiences, we developed this detailed 4-step analysis to help our clients successfully exceed their sales targets.
The Importance of Market Analysis Before Launching Your Brand
Market analysis helps you build a robust foundation for your business. Apart from this, in-depth market research provides you the following pros:
It helps you determine who your target audience is
Assists you in figuring out how to appeal and sell to your potential market
Learn about your direct as well as indirect competitors
Figure out which marketing tactics are best suited for effectively captivating your target audience
1.Know about category trends
Make sure you track all history data of your target category to find out its latest trends. You may also check out keywords data on Google trends, ARA (Amazon Retail Analytics Premium), SellerSprite, etc. Take a deep look at important metrics, such as YoY (Year over Year), WoW (Week over Week).
For example, let’s say you plan to sell a portable air conditioner on Amazon. Based on keyword history data for the past 5 years, we get to the conclusion that air conditioners have a significant seasonal fluctuation. In fact, the average YOY growth rate is less than 20% but with continuous growth.
Based on trend analysis, you should get the following information:
What’s the future of your target category?
Rise, decline, or remains the same?
2.Market share analysis
To know about total market capacity and market share, it’s critical to understand the position of your product. Consider collecting annual data pertaining to GMV (Gross Merchandise Volume), annual sales volume, ASP (Average Selling Price), revenue share on SellerSprite and our Anker internal system. Continuing the portable air conditioner example, we found the following data:
Based on GMV, portable air conditioners are the largest category. Its ASP is comparably high at $359. Thus, it’s obvious that selling portable air conditioners on Amazon is profitable.
After the market capacity and share analysis, we should collate the following information:
What’s the total capacity of your category? Big or small?
Is it necessary to enter this market? Yes or no?
3.Competitors’ market share analysis
Once you understand the total market capacity and market share by category, it’s time to do a deep investigation of your competitors’ performance. SellerSprite is a great way of finding data about competitor brands and their price range, brand market share, and star rating level.
For example, we collected following data of portable air conditioners from leading brands:
Here you need to answer the following questions:
Who are my main competitors?
How about the competition? Monopoly or scattered?
What’s the primary price range?
What’s the star rating? Is it easy to enter this market?
4.Know your unique selling point
Know your competitors and know yourself better.
The best way to figure out your unique selling point is to conduct an exhaustive analysis of your competitors. Typically, you’ll need to find the following information:
On-Amazon sales strategy
SPA (Sponsored Products Ads) strategy
Off-Amazon sales strategy
Main marketing channels (PR, social media, deal sites, etc.)
After collecting all of the information discussed above, we can make a diagram, comparing our brand with target competitors. For example:
In this part, we should find out:
How did competitors gain their current marketplace?
What are the competitors’ main selling points and advantages?
What’s our selling point and USP?
In the End
Launching a new product on Amazon can be one of the more difficult tasks brands face on the platform. Hope our strategy could help you to build a successful start for your brand launch!