Case Teaching - Product Selection on Amazon:Snore Reducing Aids

2020-05-13

Under the outbreak of Coronavirus, customers’ demand has changed a lot.

1. Discover the market
Analyze your own operating conditions. We assume that:
1) The category is Health & Household;
2) The unit price does not exceed 30$;
3) The average sales are 20-30 per day;
4) Avoid fierce competition.

Initial filtering
We utilize SellerSprite - Market Research to convert the above conditions into specific metrics:
1) Choosing “Health & Household” consider that small sellers have low-risk resistance, they should try to avoid popular products and seasonal products, and choose a subcategory with stable demand;
2) The unit price does not exceed 30$ - set the maximum value of the Avg. Price to 30$.
3) The average sales are 20-30 per day - set Avg. Monthly Sales to 300 to 1500;
4) Avoid fierce competition - set the maximum value of Commodity Concentration, Brand Concentration, and Seller Concentration to 60%.




(New Product Definition: Launched within 3 months; Listings of Sample Size: Top 100; The Number of Top Listings: Top 10)
Through the above filtering conditions, we got 28 subdivided markets, then sorted them in descending order with new products. we quickly found such a subdivided market:
The Complete Subdivided Category: Health & Household >Health Care >Sleep & Snoring >Snore Reducing Aids



Through the preliminary analysis of each metric in the market, we can find several key information:
1) The total monthly sales are 131,661. Moderate market capacity, and suitable for small sellers;
2) Low commodity concentration, brand concentration, and seller concentration, decentralized competition, and low market monopoly;
3) The proportion of new products is as high as 17%, and the acceptance of new products is relatively high;
4) The product development period is short, from the new product to the TOP100 product, it can be completed within 3 months at least;
5) The average reviews for the new product is 43, and the average rating is 4.3. With low cost and low requirements, you have the opportunity to gain weight.
Next, we enter the market analysis report to do an in-depth analysis of this subdivided market.




2. Market analysis
1) Market demand

It can be seen from the monthly searches trend of the top 5 products’ core traffic keywords in this category:




The monthly search volume of core keywords ranges from 0 and 300,000, which is not very high compared to the US department, but the overall demand is relatively stable, without obvious seasonality.
2) Market monopoly
Commodity Concentration 36.8%:




The sales trend is flat, that is, the sales distribution is relatively balanced, without a monopoly.
There are also a large number of new products distributed among them (purple column represents new products that have been launched within 3 months), and the new products have a strong impact.
Brand Concentration 59.4%:




The Top100 products are distributed among 64 brands, and the overall trend is flat, showing that the market is not monopolized by a few brands.
Seller Concentration 47.1%:




The Top100 products are distributed among 74 sellers, and the overall trend is flat, showing that the market is not monopolized by a few sellers.
3) The difficulty of market competition
(Click each column to view the product details)
Launch Time




Most of the products have been launched from 3 months to 1 year, which shows that products are updated rapidly, and the Top products are constantly changing, so the market has a good acceptance of new products.
Launch Time Trend




The earliest product was launched in 2012, indicating that the market has a long life cycle;
The products with the highest sales proportion were launched in 2019, indicating that buyers are more willing to choose products that have been launched in the past year.
Reviews




Products with reviews above 500 account for 36.6% of sales, which is normal for markets with a long life cycle;
However, the sales volume of products with 1-50 reviews also accounts for 21%, and there are still opportunities for new products.
Price




The Top100 products are distributed in 7 price ranges, and the competition is mainly concentrated in the price range of 0-20$;
Click on the column of each price range to see the details of each product under that range:




Judging from the distribution of products in the price range of 10-20$, there are more new products and fewer reviews, which are more friendly to new sellers.

Conclusion:
1) The market demand is stable and has an upward trend; the market capacity is moderate, and suitable for small sellers.
2) Top products keep changing and have a high acceptance of new products.
3) The impulsive consumer market and the monopoly of commodities, brands, and sellers are not high; sales are not concentrated on a few listings and brands, and market competition is scattered.
4) The overall price is low, and the cost of trial and error is low for small sellers; and the product volume is small, which has a higher logistics cost advantage and profit.
5) The requirements for reviews and rating of Listing are low. The operating cost of new products entering the market is not high, and the products have a certain room for improvement.
6) The market has a long life cycle and can enter in the short term or survive in the long term.
To sum up, this is a subdivided market that meets our requirements. The next step is to choose a product as the reference to find sources, calculate profit margins, and build Listing.

3. Find the reference
You can directly click to view the Top100 products details at the top of the market analysis report.




Select a product with rising BSR ranking and sales, and fewer reviews.
Here we choose a product as the reference after comparing and analyzing in the Top100 products:




It has been launched for less than 4 months, with monthly sales of 899.
The reviews is 24 and the rating is 3.2, which means that we can get good sales as long as we surpass it in all aspects when building the product.

4. Profit calculation
Click the “profit calculator” on the right of the reference, set the PPC cost to 10%, and the return rate to 2%. It can be calculated that if the cost of goods (purchasing cost + ship to Amazon fee) is controlled at about 1$, 30% profit can be obtained.