Market Research-The 3.0 Era of Amazon Product Research

2019-08-19
Let's firstly review the method of product research we used before
 
With the help of some tools or software in the market, we can easily find the moderate price range of products, such as the price that higher than 20$. The purchase cost is within expected, the profit rate is sufficient, the product’s volume, weight and packaging all meet requirements, and the operation is simple and easy.
 
Then, for the review ratings. The top products’ ratings of BSR are higher than 4.0, which shows that it is a mature product without obvious defects.
The searches of core keywords is more than 10k, and products do not have seasonality or intellectual property problems, etc.
Next, we will research the sales of several competing products, analyze the review keywords, and calculate the monthly profit of the first three months.
 
Do you notice that we missed an important link?
The competition of market.
What is the distribution of AMZ in the market? If the proportion is so low as to be negligible, how are other sellers distributed?
If there are any dominant brands in market, just like Apple and Huawei?
If there are products which were launched within 3 months that entered into top 100 sales rank? And how about their performance?
Because it is the epitome of ourselves after entering the market of next three months.
 
This comprehensive grasp of sub-divided market competition is market research.
Each sub-divided market corresponds to a category. There are thousands of listings below, we are unable to sort and analyze all of them. But according to the head principle, we can analyze listings in top 100 sales rank under each category. We need pay attention to that it is the top 100 sales rank, not the top 100 best seller rank.

Then, what are the main factors for market research?
 
1. Market capacity
This is the first factor which needed to analyze. Total monthly sales and average sales of the top 100 listings will clearly show the capacity of a subdivided market.
Whether it is millions or even more, it is related to our sales target setting in a market.
And for sellers of different sizes, the target market capacity is not the same. Powerful sellers will not want to be in a market of less than one million, and generally small and medium sales will not enter into the oversized market like “Bluetooth headsets”.


2. The industry demand and trend.
Find out the top 5 core keywords of target subdivided market, and look at the searches trend in the last 3 years. The searches directly reflects the demand of this market. If the searches curve tend is flat, it indicates that this market is mature and stable. We can judge the seasonality and holiday changes as well.


3. Commodity Concentration
It is the proportion of top 10 listings’ sales in the total sales of top 100 listings. Please pay attention to the each proportion of top 10 listings.
These two indicators needed to be combined. If top 10 listings monopoly 80% of the sales, there are 2 difference case below. One is that each of listing accounts for 8%; another is that the first one accounts for 60%, and the remaining nine listings account for 20%. The two cases means different to new sellers.


4. Brand Concentration
It is the same as the principle of commodity concentration. We can clearly know the sales proportion of each brand in subdivided market, and the proportion of top 10 brands’ sales in the total sales of top 100 brands, so as to get the brand monopoly.


5. Seller Concentration
It is the same principle as the previous two concentration. That is, the sales proportion of each seller, and the proportion of top 10 sellers’ sales in the total sales of top 100 sellers, so as to get the seller monopoly.
Please note that there may be a trap. A seller may have more than one account, and monopoly the subcategory. We need to do more deep research.


6. Launch Time
It is the distribution of launch time in the top 100 listings and the sales proportion in different time periods, which shows the difficulty of building new product.
For example, for the same subcategory, it only takes three months to enter into the Top 100 sales rank in the first two years, but now it needs six months or more. If there is no historical trend to compare, the distribution of new products in recent 3 months, 6 months and a year can show the difficulty of building new products as well.


7. Launch Time Trend
Find out the number of listings and the sales proportion that were launched in each year.
By further refining the launch time to a specific year, the life cycle of industry and product can be seen.
If the largest market share of a subdivided market is under products which were launched in 2 years, it means that the product life cycle is about two years. While, the earliest launch time reflects the life cycle of the industry.


8. Reviews
This is a very important indicator. We need to confirm the rank, and the number of reviews of competitors, it determines how much expense and time we need to invest to reach such scale; so that the credibility indicator, the number of reviews, will not affect the conversion of a listing.


9. Ratings
It is the number of listings and sales proportion corresponding to different ratings interval. We can generally know the main ratings of this market. The higher the ratings, the higher the customer satisfaction, the more mature the industry, and the lower the chance of competing through product differentiation.
As for customer's appeal to strengths and weaknesses of the product, it is necessary to further capture the review keywords, especially the negative review. One is that the negative review is basically real; Another is that we can find the main points of customer's dissatisfaction with the product though the negative review.


10. Price
It is the number of listings and sales proportion corresponding to different price range. It intuitively shows consumer’s price choice for the target market. If the market share of a price range is very high, it means that the competition in this range is very fierce, and we can consider whether to enter into another price range.


Through the analysis of the above various dimensions, the whole market situation has a panoramic view. Then, combining your own supply chain and resource advantages to make the most suitable choice. This is the 3.0 era of Amazon product research.