MMarket Research

7 Easy Steps to Do Amazon Market Research in 2024

  • Updated on April 1, 2024
Alice Ananian

Author

Alice Ananian
Amazon Market Research

Amazon stands as an eCommerce giant, attracting millions of users daily to purchase products across an unfathomable variety of categories. For an enterprising individual, navigating this colossal marketplace can be likened to a merchant sailing the high seas; both require detailed charts, constant course correction, and the ability to ferret out hidden treasures.

In the case of Amazon, accurate market research is your chart, your compass, and your map to uncover potential gold. In this comprehensive guide, we unravel an intricate tapestry of market research strategies tailored specifically for Amazon.

Identify your Niche and Product Category

Before entering the bustling marketplace of Amazon, you must first identify a niche and product category that piques your interest and offers profitable potential.

Going through the following steps will give you a solid research:

Step 1: Brainstorm for Your Product’s Niche and Category Fit

  • Identify the core function and benefits: Start by clearly defining what your product does and the problems it solves. What are the key benefits it offers to users?
  • Research similar products: Search Amazon and other online retailers for existing products that perform similar functions or offer related benefits. Analyze these products and their positioning to understand potential niche categories. (We’ll talk more extensively about competitor research below.)
  • Consider target audience: Who is the ideal customer for your product? Understanding your target audience’s demographics, interests, and online shopping behavior will help identify relevant niche categories on Amazon. Look for communities or forums where your target audience gathers online.

Helpful brainstorming tools:

  1. Jungle Scout: Simplifies Amazon product research with user-friendly tools for opportunity identification and listing optimization.
  2. Helium 10: Offers a powerful suite of features for advanced Amazon sellers, including in-depth product research, keyword optimization, and competitor tracking.
  3. AMZScout: Provides a budget-friendly option for Amazon sellers, focusing on core product research features like sales estimates, competition analysis, and FBA fee calculations.

Step 2: Refine Your Niche and Product Idea

  • Combine interests and market opportunity: Refine your niche based on your interests and the market research. Can you identify a specific sub-niche within a broader category with good potential?
  • Develop a unique selling proposition (USP): What makes your product different from existing options? Focus on a specific feature, benefit, or target audience to stand out in a crowded marketplace.

Step 3: Choose Your Product Category on Amazon

  • Browse Amazon categories: Once you have a refined niche and product idea, browse Amazon’s product categories to find the most relevant fit. Look for categories with sub-categories that align with your product’s specific features and target audience.
  • Consider traffic and competition: While choosing a sub-category, look for a balance between traffic volume (potential customers) and competition level. A niche sub-category with some existing products indicates established demand, while avoiding overly saturated categories.

Keep in mind:

  • Niche selection is an iterative process. Be prepared to adapt your ideas based on your research and refine your niche and product concept as needed.
  • Selecting a profitable niche with a good fit for your skills and interests is crucial for long-term success on Amazon.

Analyze Competitor Products

Features and Pricing

A product’s features and pricing are crucial factors that directly influence customer purchasing decisions. Use this step-by-step guide to help you research:

Step 1: Identify Your Competitors

  • Direct Competitors: These are brands offering similar products targeting the same audience as you. Look for companies with products that closely match yours in functionality and purpose.
  • Indirect Competitors: These offer products that might not be identical but serve a similar need or target a slightly different audience. They can still provide valuable insights into broader market trends.

Step 2: Gather Information

  • Product Websites & Reviews: Visit competitor websites and online stores to examine product descriptions, specifications, features lists, and user reviews. Reviews can reveal real-world experiences with strengths and weaknesses.
  • Retailer Listings: Check major online retailers (Amazon, Walmart, etc.) where your competitors’ products are sold. Look at product descriptions, pricing variations, promotions, and customer Q&A sections.
  • Industry Publications & News: Industry publications and news articles might cover competitor product launches, reviews, and comparisons. These can offer valuable insights into industry trends and competitor strategies.

Step 3: Create a Feature Comparison Chart

  • List your competitors and your own product across the top of a table.
  • Down the side of the table, list all the relevant features a product in your category might offer (material, size, weight, warranty, etc.).
  • For each feature, mark whether your competitor’s product has it (Yes/No) and any additional details about the specific feature (e.g., size variations, warranty duration).
  • Include your own product’s features for comparison.

Step 4: Analyze Pricing Strategies

  • Record the prices of your competitor’s products across different retailers and consider any discounts or promotions offered.
  • Look for patterns in their pricing strategy. Do they offer premium pricing for higher-end features or compete on affordability?
  • Consider the perceived value proposition of your competitor’s products. How do features and price combine to create an attractive offer for their target audience?

Step 5: Identify Strengths, Weaknesses, and Opportunities (SWO Analysis)

  • Based on your feature comparison and pricing analysis, identify your competitor’s strengths (superior features, competitive pricing).
  • Look for weaknesses in their offerings (missing features, high price point compared to features).
  • Consider opportunities for your product based on the competitor analysis. Can you offer a better feature set at a similar price or a competitive price with a unique feature?

Keep in mind:

  • Regularly update your competitor analysis as markets and products evolve.
  • Don’t just copy competitors – use the analysis to identify opportunities to differentiate your product and offer a compelling value proposition to your target audience.

Customer Reviews

Analyzing customer reviews is akin to overhearing a candid conversation between your competitors and their customers. Turn to platforms like Prelaunch.com’s AI Market Research Assistant to go beyond star ratings, drilling through customer feedback to glean insights into product strengths, weaknesses, and unmet needs. Use this process to help collect and analyze reviews:

Step 1: Identify Your Competitor’s Products

  • Once you have a list of competitors, identify the specific products within your category that they offer.
  • Consider looking at both top-selling and lower-performing products to get a more comprehensive understanding of their product lineup.

Step 2: Gather Reviews

  • Using the Prelaunch tool, add the links of these products here. This generates a comprehensive summary of available reviews for each product.

Step 3: Study the Competitor Analysis

The report generated by Prelaunch.com highlights several sections, including:

  1. Key strengths of competitors
  2. Common weaknesses and need for improvement (in competitor products)
  3. Features that users value most
  4. Average user profile
  5. Users’ opinions on price/benefit relationship
  6. Opportunities for differentiation and improvement in your own product
  • Pay attention to specific product features or aspects that customers mention repeatedly.
  • Take note of any features that your competitors excel at, as well as areas where they fall short according to customer feedback.

Step 4: Identify Unmet Needs

  • Pay special attention to the reviews that mention specific product features or experiences that customers desire but are not currently offered by your competitors. This can be an opportunity to fill a gap in the market and differentiate your product from others.
  • Consider how you can incorporate these unmet needs into your product concept to appeal to potential customers. (This is why the summary also includes suggestions at the end.)

Step 5: Learn from Negative Reviews

  • While positive reviews can tell you what your competitors are doing well, negative reviews can reveal areas for improvement. Look for recurring issues or complaints mentioned in multiple negative reviews and consider how you can address them in your own product.

Use Amazon’s Best Sellers Rank (BSR)

The Best Sellers Rank is more than just a vanity metric; it’s a powerful indicator of a product’s actual sales. By sifting through BSR data using tools such as Sales Rank by AMZScout, you can track the performance of top-selling products within your category over time, assessing their popularity and sales trends.

This quick guide will help you understand and use it:

Finding a Product’s BSR:

  • Product Page: The BSR is displayed on most product pages on Amazon. Look for the “Product Information” section, usually found halfway down the page. You’ll see a category listed (e.g., BSR in Kitchen & Dining) followed by a number.
  • Seller Central: If you’re a registered Amazon seller, you can view your product’s BSR and track it over time within Seller Central. Go to Reports > Business Reports > Inventory and check the “Sales Rank” column.

Understanding BSR:

  • Lower BSR is Better: A lower BSR indicates a product is selling well within its category. For example, a BSR of #20 is better than a BSR of #20,000 in the same category.
  • Category Specific: BSR only applies to a product’s ranking within a specific category. A product might have a great BSR in Kitchen & Dining but a poor BSR in Electronics.
  • Not Absolute Sales Data: BSR doesn’t reflect exact sales figures, but rather a relative ranking. A product ranked #1 isn’t necessarily selling ten times more than a product ranked #10.
Using BSR for Market Research:
  • Identify Popular Products: Analyze the BSR of top-selling products in your niche category. This can give you insights into what features and benefits resonate with customers.
  • Evaluate Competition: Consider the BSR of competitor products. If a niche has several products with a good BSR, it indicates overall category popularity.
  • Identify Trends: Track BSR changes over time for specific products or categories. This might reveal seasonal trends or sudden surges in demand.
Limitations of BSR:
  • Manipulation: BSR can be influenced by factors like promotions and giveaways, not just organic sales.
  • New Products: Newly launched products might not have a BSR yet.
  • Multiple Categories: Some products might be in multiple categories, having a BSR for each. Consider the most relevant category for your analysis.

Utilize Amazon Keyword Research Tools

Keywords unlock the doors to visibility on Amazon. Discover what search terms your potential customers are using by employing tools such as Sonar, MerchantWords, or AMZ Tracker. These tools analyze Amazon’s auto-suggested keywords and provide valuable insights into search volumes and related search terms.

Once you’ve identified the keywords that resonate with your target audience, weave them seamlessly into your product listings. Remember, Amazon’s A9 algorithm favors relevance, so ensure your keywords align with your product’s actual functionalities, benefits, and use cases.

Let’s take the example of someone selling a bamboo cutting board on Amazon and how they can optimize their listing for search:

Keyword Research:

  1. Identify Relevant Keywords:  Begin by brainstorming keywords related to your product.  Use tools like Amazon Seller Central or Jungle Scout to research relevant keywords with high search volume but lower competition. Consider terms like “bamboo cutting board,” “eco-friendly cutting board,” “large cutting board,” or “organic cutting board.”
  2. Target Long-Tail Keywords: Include long-tail keywords in your product title, description, and backend search terms. These are more specific phrases with lower competition, like “bamboo cutting board with drip tray” or “reversible bamboo cutting board for vegetables.”

Product Title Optimization:

  • Target Primary Keyword: Integrate your most important keyword at the beginning of your product title. For example, “Large Bamboo Cutting Board for Kitchen – Eco-Friendly & Organic.”
  • Include Key Features: Briefly mention key features that differentiate your product, like size, material, or reversible design.
  • Stay Within Character Limit: Adhere to Amazon’s title character limit (typically around 80 characters) for optimal visibility.

Product Description Optimization:

  • Compelling Product Story: Craft a captivating description that highlights the benefits of your bamboo cutting board. Focus on how it solves customer problems (e.g., eco-friendly, durable, easy to clean).
  • Integrate Relevant Keywords: Naturally incorporate your target keywords throughout the description but avoid keyword stuffing.
  • Highlight Features with Bullet Points: Use bullet points to list key features and specifications for easy readability.
  • Address Customer Pain Points: Read competitor reviews to identify common customer concerns and address them in your description.

Backend Search Terms:

  • Extensive Keyword List: Here you can include a broader range of keywords relevant to your product but not suitable for the title or description. This helps with search discovery even if those terms aren’t directly in your listing.

Additional Optimization Techniques:

  • High-Quality Images: Use professional-looking product photos from multiple angles showcasing the cutting board’s features and functionality.
  • Positive Customer Reviews: Encourage satisfied customers to leave positive reviews, which can significantly improve your product’s ranking and conversion rate.
  • Competitive Pricing: Research competitor pricing and offer a competitive price point while maintaining profitability. Consider offering bundle deals or discounts to attract customers.

Evaluate Demand and Seasonality

Seasonality plays a pivotal role in the success of products on Amazon. While some products may enjoy consistent year-round demand, others may be tethered to specific seasons or events. Recognizing these patterns ahead of time helps prevent costly stockouts or overstock scenarios.

Helium 10’s Market Tracker is a powerful tool that can help you evaluate demand and seasonality for products you’re considering selling on Amazon. Here are they ways you can use it:

Demand Evaluation:

  1. Identify Target Products:  Input the ASIN (Amazon Standard Identification Number) of a product in your niche category or a product similar to the one you plan to sell.
  2. Sales History:  Helium 10’s Market Tracker displays historical sales data for the product, typically in units sold per month. Analyze the sales data to understand the overall demand for similar products throughout the year.
  3. Estimated Monthly Sales: The tool provides an estimate of the product’s average monthly sales, giving you a general idea of the potential sales volume you might achieve with a similar product.
  4. Search Volume & Rank:  Market Tracker displays search volume data for relevant keywords associated with the product. This helps you understand how often people are searching for products like yours. Analyze search volume trends over time to gauge overall demand.

Seasonality Analysis:

  1. Sales Trend Visualization:  The sales history data is typically presented as a graph. By looking at the graph, you can identify seasonal trends. Look for spikes or dips in sales throughout the year.
  2. Identify Peak & Low Seasons:  Based on the sales trend graph, you can determine the peak and low seasons for the product category. This helps you plan your product launch, marketing strategies, and inventory management accordingly.
  3. Compare With Similar Products:  Repeat the process for several products in your niche to see if the seasonality trends are consistent. This provides a broader understanding of seasonal patterns within your product category.

Additional Tips:

  • Consider External Factors: Seasonal trends can be influenced by holidays, back-to-school periods, or weather changes. Research external factors that might impact demand in your niche.
  • Limited Historical Data: For new products, historical sales data might be limited. Use alternative methods like competitor analysis and general market research to assess demand.

Understand Amazon’s Policies and Requirements for Your Product

It is crucial to be intimately acquainted with Amazon’s sometimes stringent policies and requirements for product listings. Any deviation can lead to listing rejections or even account suspensions.

Tools like AMZFinder or FeedbackFive enable you to stay compliant by automating request for product reviews. Count on these tools for:

  • Scheduled Requests: By scheduling review requests after order fulfillment, these tools help you avoid sending them too early, which might violate Amazon’s policy.
  • Generic Templates: Both platforms offer pre-built templates for review requests. However, you should always review and edit these templates to ensure they comply with Amazon’s guidelines.

Remember:  The ultimate responsibility for complying with Amazon’s policies lies with the seller.  It’s crucial to carefully craft your automated review request message to avoid mentioning incentives or targeting specific products/buyers.

Test Your Product Demand with Prelaunch

Before you make a full investment, test the waters using tools like Prelaunch.com idea validation platform to gauge potential demand for your product. This tool offers the most competitive insight into market receptiveness and purchase intent, saving you from costly missteps and risky investments.

How it Works

Step 1: Product Description

Describe your product in just a few sentences. Imagine telling a friend.

Step 2: Product Features

Name the top 3 features you’d like to highlight.

Step 3: Product Specifications

Mention anything else you think is important to note such as information about materials, available colors, packages, and more.

The Result: Prelaunch uses this information and AI to generate visuals and captivating copy to present your idea. This allows you to:

  • Get accurate photos of your idea
  • Share with your community
  • Find your future customers
  • Get instant feedback and insights

The landing page that you just created will then become the basis for collecting more insight.

When you create a landing page using Prelaunch, visitors will be prompted to share their email addresses to show their initial interest. (These will be considered subscribers.)

Following that, they will be requested to make a small deposit to reserve your product. This step is crucial for understanding the purchasing intent of your target market.

Every subscriber, regardless of reservation, will be provided with comprehensive surveys to pinpoint their main attractions, obstacles to purchasing, and suggestions for product improvement.

From here, you can modify any aspect of your product – like messaging, positioning, colors, features, price – based on performance differences and user feedback to boost your chances of success.

Create a new product variation and repeat the testing process until you discover the winning version.

Gather Feedback from Potential Customers

Feedback is the breakfast of champions in the world of eCommerce. That’s why Prelaunch’s validation tool has short surveys embedded into the lead generation process described above.

For example, the Reservation Survey is presented on the Thank you page once a prospective buyer has reserved the product. This survey enables us to pose inquiries aimed at enhancing the product and identifying the buyer persona.

Conversely, the Cancellation Survey is triggered when a user selects the “No, thanks” option on the Reservation page. This survey gathers feedback on the reasons behind their decision not to reserve the product and suggestions on what could potentially change their mind.

11 Amazon Market Research Tools: Roundup

The marketplace is brimming with tools designed to streamline the market research process for Amazon sellers. Here are some of the top picks for 2024:

Market Research Tools:

Amazon Seller Tools:

  • Amazon Seller Central: The official platform from Amazon for managing your seller account, listings, inventory, and fulfillment.
  • AMZFinder: Helps source potential suppliers for your products.

Feedback Management:

  • FeedbackFive: Manages seller feedback and helps automate responses to customer reviews.

In conclusion, Amazon market research is the lighthouse guiding your ship through the expansive digital ocean. The steps outlined here serve as your compass, ensuring that you set sail with the wind, following the right trajectory towards success in the Amazon marketplace.

Through careful attention to detail, strategic utilization of tools, and a deep understanding of consumer behaviors, you can carve a niche for yourself amidst the vast offerings of Amazon. Remember, the market is dynamic, and continuous research and adaptation are key to maintaining your competitive edge. Happy sailing!

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