In this Amazon FBA step by step guide, we are going to show you practical steps on how to learn from your competitors or those that have come before you. We’ll also help you come up with your own winning strategy.
Amazon FBA Step by Step Know How
So, grab your raincoat, binoculars, and needle-dart pen because we are about to train you on how to become a 007-esque Amazon spy. Just kidding! Unfortunately, “corporate espionage” on Amazon isn’t nearly as exciting as the adventures of James Bond.
It’s harder to collect concrete statistics and information on Amazon because they are relatively tight-lipped concerning their actual figures due to their privacy agreement. However, all the information you need is conveniently available online. All you need to do is know how to find it and extract value.
Find your niche/categories/products
It should go without saying that before you can find your competitors and start collecting data on them, you need to find out in what niche you will be operating. This is not as easy as just picking the first thing that pops into your mind. It helps if you are selling in a niche that you want to sell in, but you also have to make practical considerations.
Highly competitive niches might have huge markets and demand, but might be hard to break into and monopolized by certain big brands or sellers (or Amazon itself). Less competitive niches have more room for maneuvering to become the “next big thing.” However, you will need to create or inspire demand.
There are certain categories we feel are easy enough to get into and potentially very lucrative, such as:
- Baby clothing: There will always be more babies that grow up fast and are in constant need of new clothing.
- Jewelry and fashion accessories: Allows for your own creativity and carving your own spot in the market.
- Books: Especially textbooks because they always have a large audience and are easy to source.
- Personal electronics accessories: Phone cases, battery packs, waterproof containers, etc.
Within these niches, you can find your own specific products that you want to focus on. These might be based on your startup capital, interests, and where you see value.
Spot your competitors
This is probably the easiest step in our guide largely because all the sellers are handily shown along with their products on the Amazon marketplace. Finding them, therefore, is a matter of searching for your specific products on Amazon, looking at who is selling them, and noting them down. If you click on their name link on the product page, you will be shown a page with all their products.
You can also get help from various tools. Jungle Scout is one of the best tools available to do recon on potential Amazon competitors.
Not every single seller in your category is worth your time. You should narrow down your search somewhat according to the following factors:
- Are they small-time/big-time or professional/individual sellers?
- Are they dedicated to this niche or spread over multiple niches?
- How much does their and your interests overlap?
- How popular are they on Amazon?
There are no recent official numbers regarding the number of 3rd party sellers on Amazon. However, in 2015 there were already more than 2 million. Since then, selling on Amazon has only become more and more popular with an estimated increase of 70% in 3rd party sellers for 2016 alone.
That means there are A LOT of competitors to choose from. Consequently, it’s an impossible task to closely monitor all of them.
Collect information from your competitors
Next, you might be wondering what kind of data to collect. One of the reasons we recommend using tools like AMZ Insights, Jungle Scout, Unicorn Smasher or AMZDataStudio is because there is such a wealth of information that constantly keeps changing. They make it easier to collect, interpret, and to get the latest information.
Let’s use Unicorn Smasher for this example. We searched for “speakers.”
As you can see, this market is dominated by big brand suppliers. If we open Unicorn Smasher, it provides us with the number of sellers for each product, the average price of the product (and for the category below), the most popular categories, the best sellers ranking, estimated sales and revenue, and average score.
This can help you find great products, identify competing products or sellers, and help you get an idea of price points within your niche. All of these are invaluable indicators for a new seller that doesn’t have their own figures to inform their decisions.
If you have AMZ Tracker installed, you will have this section on product pages within Amazon:
You can use this information to optimize your own product listings or to see the performance of other product listings. AMZ Tracker is a paid tool, but you can get the same kind of data from AMZDataStudios for free. It’s just not integrated on the product page like AMZ Tracker.
You will also see a new type of data we want to track “Keywords.” Keywords are important because they play a huge role in your search results rankings. Relevant keywords will attract the most buyers as Amazon’s A9 algorithm will pair you with their search queries.
With tools like these, you can easily track which keywords your competitors are using. Then, correlate those keywords to their success. This will give you a good idea of which keywords you should use.
As we mentioned, this data is never fixed. The Amazon marketplace is dynamic and the sellers, products, etc. are always changing. It’s an adapt-or-die environment where you can’t afford to stand still.
You should not think of this process as a once off task when you start to sell on Amazon. Rather, you should update your information from time to time to see what works vs what doesn’t work for your competitors, why it works, what they changed, and adapt it into your own strategies.
Most of the tools we’ve mentioned provide the ability to compare data over time or to export it into spreadsheets for your records.
Spy training is over, are you ready for fieldwork?
If that all seems too easy, don’t be too suspicious. There really looks much more complicated from the outside, but once you get going you see how easy it is. You also don’t have to worry about any moral qualms as these are techniques everyone uses to get to know the market they’re selling in. Use this Amazon FBA step by step guide and start looking at your competitors!