Market Analysis on Amazon: A Step-by-Step Guide

Before selling on Amazon, it’s essential to understand the market. But how do you conduct a market analysis for Amazon? Which competitors are out there, and how well are they performing? How much do similar products sell? How do you choose the best country to enter? These are critical questions to answer. The more information you have, the better decisions you can make regarding strategy, investment, expectations, and more.

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Without a market analysis, you risk overestimating the market size or underestimating your competitors' strength, leading to decisions that could result in lost revenue and unmet potential. If you would like a professional market analysis, feel free to contact us at SellWave.

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So, what do you need to find out when conducting a market analysis? Let's start by looking at the competitors.

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1. Who Are the Competitors on Amazon?

The simplest way to start is by going to the Amazon marketplace you want to sell on and searching for the product you sell. If you sell many products, you might need to do this for each one or conduct a broader analysis by looking at categories instead.

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1.1. Search for Competitors

Go to the marketplace you're interested in. Amazon.com for the US, Amazon.de for Germany, and so on. Then, enter the product or product category you are interested in exploring. Make sure to search specifically enough to avoid irrelevant competitors but not so specifically that you miss competitors.

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For example, if I sell meat thermometers and want to sell on Amazon US, I would go to Amazon.com and search for "meat thermometer." The search results would look something like this:

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1.2 Quick Competitor Analysis

When the search results appear, start analyzing the competitors. Scroll through the results and try to get a sense of them. You might already know some of them, while others may be new to you. Take note of prices and the number of reviews (the number next to the star ratings).

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After reviewing the search results, I suggest clicking on the products to view their product pages. Here you can see more detailed information, such as product images and descriptions. I’ll go over this in more detail shortly. But first, let's see how you can find out how much your competitors are selling.

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2. How Much Are Your Competitors Selling?

You can easily find competitors on Amazon, but how do you find out how much they are selling?

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To do this, you need third-party tools—tools not provided by Amazon but developed by other companies. There are many such tools, each with its pros and cons. The tool I recommend is Jungle Scout.

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Jungle Scout allows you to get information on competitors' sales figures, maximize the number of reviews, improve Amazon SEO, and much more. In my opinion, it’s the best tool, and it’s easy and convenient to use. There are other tools as well, like Helium 10 and Viral Launch.

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2.1 Get the Right Tool

Before moving on, you’ll need a functioning tool. I recommend Jungle Scout, which I will use in this guide. However, you can also use other similar tools. Keep in mind that not all tools have the same accuracy when it comes to data. You’ll also use Jungle Scout (or a similar tool) for many other aspects of Amazon selling, so choose wisely.

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Get a 30% discount on Jungle Scout here.

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2.2 Install the Tool

Once you’ve acquired Jungle Scout, you need to install their Jungle Scout Extension. This installs directly in your browser, whether Firefox or Chrome. After installation, the extension should appear among your browser’s extensions.
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2.3 Retrieve Sales Figures

After installing Jungle Scout, it’s time to gather the data. Search for your competitors on Amazon again (see step 1.1). Then, click on your newly installed extension. A window will pop up that looks something like this:

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Here, you can find all the information you need. You can see an average for all competing products at the top, but you also get data on each individual product. The "Mo. Revenue" field gives you a quick overview of how much competitors generate in sales each month. As you can see below, the best-selling competitors for meat thermometers in the US make between $150,000 and $450,000 monthly. It’s also helpful to check other fields for information on prices, number of sales, etc.

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3. Interpreting and Analyzing Jungle Scout’s Data

Great, you can now retrieve sales figures, but what do they actually mean? And is there anything you should keep in mind?

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3.1 Interpreting Sales

The fact that competitors are selling for X dollars every month doesn’t mean you and your company will do the same. But, it likely means that you can. You can if you convert well and have a product that ranks high in search results for related searches. These figures can help you understand the potential, but getting there requires hard work.

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3.2 Market Depth

One last thing I suggest you look at is market depth. How many of the competitors are selling volumes that are interesting to you? If only a few competitors are taking almost all the sales, you should be cautious. Why? Because if you want to take a share of the market, you’ll need to break into the top ranks, which can require significant investments. Investments that won’t pay off until you reach the top. If there is more depth, sales will start coming in long before you reach the top, which can be satisfactory and also provide the means for further investment.

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4. How Well Are Competitors Performing?

Great, you know how much competitors are selling, and you understand what the figures mean. If the numbers look interesting, is it just a matter of getting started? No, not quite. You should also look at the quality of competitors. Not just product quality, but also how well they manage their product pages. Why? Because this gives you an indication of how you can compete with them and how your products can achieve top rankings.

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4.1 Product Quality and Pricing

Of course, you should examine competing products. How good are they, and how competitive are their offers? Could you be competitive here? Are there products that look almost identical?

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In short, do your products have a USP (Unique Selling Proposition)?

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4.2 Quality of Product Pages

The next parameter to check is how well competitors manage Amazon. Visit their product pages and examine them.

• How many and how good are their images?
• Is the title effective?
• How well-written are their bullet points? Do they focus on customer benefits?
• Do they seem to use different keywords in the various texts?
• What does their product description look like? Do they use images and other recommended products, or is it just text?
• How many reviews do they have, and what is their average rating?

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There are many things to consider, but this is an important step. If competitors are doing an excellent job, it will be harder for you to compete, and it will require more investment from you. I suggest you make a list of the top 15 competitors and review them individually. Then, give each a rating between 1-10 for how good their product pages are, along with a brief comment. This will give you a good overview of your potential. The precision of your ratings isn’t crucial; this is just to give you a rough estimate of the competition.

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Jungle Scout’s extension has a field called "Opportunity Score," which can give you an indication of how good your chances are in this category. The score is based on both product pages and existing sales volume.

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4.3 Competing Brands

Of course, you should also consider brand competition. If your top competitors are well-known brands like KitchenAid, Adidas, or Nike, it’s hard to match their sales volumes, no matter how well you manage Amazon. It’s definitely possible, but it’s challenging. Well-known brands often drive more traffic, increase conversions, and even command higher prices. If you don’t work with an equally well-known brand, you should probably focus more on other competitors—those with similar conditions to your company. Of course, you should aim to build your brand in the long term, and Amazon can be a good springboard for that, but in the short term, it’s extremely difficult to compete.

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5. Comparing Different Markets and Countries

As mentioned, Amazon operates in many different countries, and when choosing one or more markets to enter, a market analysis is a valuable tool. To make a decision, you should also consider laws, language, existing business operations, and geography. But the market size and competition in the different countries are undeniably of interest.

5.1 Compare Different Countries

When you want to compare the different marketplaces that Amazon operates, the key is to conduct a thorough analysis of each market. Once the analysis is done, you should, of course, compile everything to get a clear overview. I suggest writing down all the relevant countries, along with the top competitors' average revenue in each country and the average quality of their product pages. This will give you a comprehensive view of which markets offer the best opportunities for your products.

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Example:

This table helps you visualize where the most potential lies and where your efforts might yield the highest returns. It’s important to weigh this data against other factors like shipping logistics, local regulations, and your company's capacity to operate in multiple regions.

5.2 Consider Amazon's Regional Divisions

As previously mentioned, Amazon's different marketplaces are divided into regions. For example, Europe is one of these regions. When you register to sell in one country within a region, you can easily expand your sales to the other countries within that same region. There are also advantages in inventory management within these regions. You can see all the regions and the countries included in them here:

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When expanding into new markets, consider the ease of scaling across a region versus focusing on a single country. This approach can simplify logistics and help you capture a larger share of the market.

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Summary - Market Analysis on Amazon

That’s everything for this post; I hope you now have a clear picture of how to analyze the market on Amazon and understand your competitors’ sales. You should also have a good idea of how to start analyzing the competition in terms of product quality and product pages.

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Stay tuned for our upcoming post on how to use Jungle Scout to track market trends and search volumes. Don’t miss it! If you’re looking for a professional analysis, feel free to contact us at SellWave.