What’s Your Potential? Analyzing the Amazon Category
There is a common question among brands and manufacturers selling on Amazon: how is my product currently performing and how well could it be performing? This is ultimately your potential- and when we evaluate product potential, it is equally as important to ask what is the true value of the Amazon category and how can you use it to maximize your Amazon Business potential? As a brand or manufacturer, you can only do so much on your own to push your products on Amazon before you hit a ceiling. However, analyses and data, as well as the right tools can help you break through this ceiling in order to reach your maximum potential. The first step though, is finding your “why”:
- What is your motivation for finding the potential of a category and what do you need to know to make the decision?
- What information, including data and insights, do you need to make your decision and also to convince your stakeholders?
- And finally, what kind of analysis do you want to perform?
- Understand what kinds of products consumers like to buy
- Understand how you product will work in an existing category and monitor over time to track changes in that category
- Understand why certain competitors are performing better
Sales rankThis is the number of sales of a particular ASIN compared to the number of sales of other ASINs. It doesn't tell you the quantity sold of a particular ASIN, but rather the relationship among ASINs. What is the importance of sales rank? The higher your sales rank, the more relevant you are on Amazon, so it is a key indicator that shows your product’s potential to grow. When you begin your potential analysis, you first must find the correct categories to analyze and then identify the correct products that align with your own and cluster these products. Finally, you must analyze the price segments of the product clusters and focus on their sales rank. Tip: Monitor the Sales Rank over a certain period of time to get a good idea of the average Sales Rank Step 1: What are the correct categories to analyze for your potential? The top category is usually not the right category to analyze as it is very broad- better to zoom in on a middle category or leaf category. The more precise your category selection, the better BUT keep a close eye on the product hierarchy as it may not be what you expect. Amazon has its own semantics; perhaps what you think may constitute only one category, is in fact, several different categories on Amazon (and vice versa). For example, you may think there should be just one category for “Laundry Detergent” while Amazon has separate categories for white, dark, delicates, etc. Tip: Keep in mind that categories are not MECE (mutually exclusive and collectively exhaustive) and there sometimes may be multiple categories suitable for a given product. Step 2: Use sales rank to identify market trends.
- Which leaf category is the most important within the middle category?
- Measurement of visibility performance paid advertising traffic
- Analysis of organic visibility and SEO performance
- Potential Analysis for market opportunities
- Overall strengths and weaknesses evaluation of competitors (including all available data)