Amazon Seller Competitor Analysis – Easy Guide [2023]

Picture of Author: Martyn N.

Author: Martyn N.

Hi! I’m Martyn, a full-time Amazon E-Commerce Manager with over 5 years of experience selling and managing a wide range of products for various small businesses on Amazon.

Are you an Amazon seller with products listed in competitive niches?

Have you been feeling increasingly stressed about incoming competitors, or feel powerless against stronger listings?

Competition on Amazon is tough – and it only gets tougher as time passes by.

However, as more and more customers also look to shop on Amazon, there’s never been a time where beating your competition gets you massive sales.

Running a competitor analysis is a key step in improving your competitiveness on Amazon – naturally, you cannot beat something you do not know.

In this article, we will:

  • Discover your top competitors
  • Explore your product’s features
  • Define the importance of your product’s features
  • Analyze how your competitors fulfil these features
  • Discuss how to best compare with your own product


Let’s dive in!

Identify your top competitors


The first step to analyze your competitors on Amazon is, of course, to find them (duh!).

To do this, we’re going to need to find the most relevant keywords for your product(s).

Start by thinking of the most basic, single word that describes your product – I recommend you also ask friends and family for this.

Once you have that word, use either a keyword research tool or if you don’t have one (I recommend you make the investment to get one) then use a search engine and its results and suggestions. 

With a keyword tool, you will get a list of words that are related to your initial (seed) word, but you will also most likely get a search volume estimate, which allows you find what people search for most often.

This is particularly important to avoid the trap of assuming your name for your product is also the name that most of your customers are using!

Once you have the top keywords, we can go ahead with getting the top results on Amazon.

Before we can go ahead and analyze the listings that are shown on the search results for the top keywords, we have to establish which ones are our competitors.

This is because Amazon doesn’t always just strictly show the listings that are 100% relevant to the query – in fact, since the search is processed by an algorithm, many of the results often haven’t been classified as “irrelevant”.

So how do we do this?

Well, you could decide it yourself – however, I advise against this.

Why?

Because it is unimportant what you consider to be relevant or not – all that matters is what your customers consider to be relevant.

You might see a listing and think: “Well that can’t be a competitor, that’s a completely different product!”. However, your customers might think otherwise, seeing it as a solution to a problem that you may not be aware of.

So how do we know what the customers see as relevant or not?

A simple technique is to look at the organic ranking across the top keywords.

Amazon’s algorithm is simplistic – if the product sells for a given keyword search, then it’s relevant and so ranks up in the organic results.

Be careful – do NOT look at the sponsored rankings!

A listing might appear at the top of the search results page (SERP) through advertising – however, it could very well have a low relevance and only be kept afloat by high (and probably mismanaged) bids.

Next, I suggest you find the listings that have the highest average organic ranking across all of your top keywords.

Taking the average ensures safety of results – it is much more likely that these listings are not only relevant, but also very good sellers.

I also recommend that you check the sales rank of each listing to find out which ones sell the most.

A combination of high average organic ranking and low sales rank will highlight your top competitors for your niche (careful: a low sales rank means more sales!).

I then advise you to pick out the top 5 competitors for your niche.

Why 5?

Sure, you could look at many more. However, most sales in a niche market are done by the top 5 competitors.

Naturally this varies in each niche, with some having one big leader racking up all the sales and some having many similar products competing fiercely, but this is a general guideline.

Also, I assume you’re a busy person and you don’t want to spend days on end carrying out this seller competitor analysis – I follow the 80/20 rule for time efficiency, and so that’s what I’ll suggest here as well.

Once you know which listings are at the top for the most important keywords for your niche(s), you then know who your competitors are and can start examining their offer and features – the first big step towards beating them!


Define Your Product Features


Great! We know who the big competitors of your niche market on Amazon are.

Can we go ahead with analyzing them?

…not so fast.

Before we can analyze them, we need to know what we are going to analyze.

We need to find out what matters – what factors make a customer give their money to one competitor rather than another. 

Without this, we might focus on elements that are completely irrelevant for our success, or completely ignore critical elements that are core sales drivers.

We need to find out the relevant product features.

What are product features?


Product features are simply the aspects of any product that solve your customer’s problems and thus give it value.

For instance, take travel pillows. The features will be their  shape, material, size, softness, whether they have a carrying bag and so on.

How to find product features


A good starting source of features are the top sellers – most often, they will display on their listings most of what customers are looking for. After all, if they didn’t, they wouldn’t sell!

However, this will only get your own listing as far as your competitors – and we want to go beyond that.

So let’s look at some other sources of demanded product features that your competition might have missed.

Reviews

Reviews should be your first source of information for product features.

What did your customers or your competition’s customers like? What did they dislike?

What do they use the product for?

What did they find to be particularly important for them?

Forums

Forums are a wonderful source of information for product features – they are basically a platform where your customers go voluntarily to write down what they think and feel about your product.

Great, isn’t it?

Of course, finding a forum dedicated to something like wooden chopsticks isn’t likely – the more niche the product, the less likely that there is a forum about it. 

But if there is one, I strongly recommend you find it. It is also the perfect place to ask your audience what they like, dislike, what could be changed and so on.

Articles/Magazines/Blog Posts

Basically any other kind of media external to Amazon. Google is your friend. Simply go through your list of descriptive keywords and scour the search engines for results.

The more diverse the sources, the better.

Following the feature hunt, you should now have a list of all the features that customers value.

That being said – not all features are equal.

Let’s say you’re looking to buy a new couch – how important is, say, the thickness of the feet compared to a feature like the couch’s width?

The next step as such is to attribute the importance of each feature in the eyes of the customer.

Thankfully, this should be fairly obvious from your previous analysis – simply look at how often the features are mentioned in both competitors’ listings and reviews.

However keep an open mind – sometimes some features are more important than they seem, and neither your customer or competitors might realize it.

You can test this importance over time as you experiment with content on your listing.


Analyzing Your Competitors


Product Features Analysis


You’ve now got your top competitors, the product features and how important they are.

Now, we can proceed with the competitor analysis!

Gathering the data is a fairly simple process – in fact, it’s less intensive than what you’ve just done.

Just go through their listings like a normal customer would.

What features are they offering?

How are they performing on each of these features?

Which customer problems are these features solving?

How effective are they at solving these issues?

How well are they communicating this?

I recommend going through those top listings and answering each of these questions one by one.

Don’t worry about going into too much depth – if you can’t figure out how their product solves a particular problem within a minute, neither will the customer.

If you find that a competitor has a very strong score for a feature but it’s hidden somewhere on the listing – make a note of that fact. While on paper they might have an advantage, until customers see it, it isn’t.

Watch out though – product improvements take a long time to be manufactured, but a listing improvement comes quickly. You might wake up one morning and realize that someone from their team picked up on that untapped advantage and brought it forward.

Keep going until you have all the information for each top competitor for the list of features you have identified.


Price analysis


Ah, price.

I don’t need to stress the importance of price in the purchasing decision of the customer – and as such, its importance when it comes to carrying out a competition analysis on Amazon.

You know the drill – the cheaper the better.

However, price isn’t really important as a raw value – rather, it is only important in relation to the perceived value of the product.

Is 500 dollars a lot?

For a box of candles, absolutely.  

For a brand new sports car, heck no.

This is an extreme example, but it’s critical to understand this difference.

You might be selling a pack of 6 candles on Amazon and all your competitors are selling packs of 8 for the same price.

Are you uncompetitive?

It depends. If your candles last twice as long, maybe not.

Does it matter to the customer if they last much longer? 

Or are they more interested in having a larger count, regardless of duration?

This is why doing an in-depth analysis of your product’s features and criterias and knowing how your competitors fulfil those is critical.

If you’re only taking candle count and price into account, your competitor analysis will return that your price is too high.

Take everything into account. Assess the importance of each factor. Once this is done, you can more accurately assess the impact of price on your competition analysis.

Rating Analysis


As you probably know, reviews are also a critical part of the purchasing decision process of the customer and as such, are a vital component of a complete competitor analysis on Amazon.

There are two distinct aspects to reviews though: Rating and number of ratings.

The rating is the “star score” that’s calculated out of a maximum of five.

Number of ratings, as the name suggests, displays how many times the listing has been rated by a purchasing customer.

Naturally, the lower the rating and the lower the number of ratings, the weaker your competitors are.

However, do note that the perceived trust by the customer in these two factors is not linear.

I mean by this that a rating of 2.5 isn’t half as “appealing” as a 5-star rating.

Similarly, a competitor isn’t twice as appealing on the review aspect if they have 200 reviews and you have “only” 100.

The exact distribution of appeal vs rating/number of ratings is not clear – though many sellers have conducted secret studies to crack that part of buyer psychology.

It is however accepted that the distribution is exponential – the higher the value, the lower the marginal impact on the customer.

Taking this into account for your competitor analysis is critical.

How many ratings does your listing currently have?

How many do your competitors have?

And most importantly – where on the curve are you and your competitors distributed?

If you all have thousands of ratings, the impact of the number of ratings is going to be minimal – and as such, the impact of other features is going to be much larger.

But if you have, say, 10 reviews and your competitors average over a 100…this is going to make a big difference in your analysis.

Similarly, having a rating of 4.4 vs your competitors 4.5 is going to be a rather negligible disadvantage, particularly as Amazon displays the star rating in half-stars and few customers bother to look up the exact rating.

However, sitting at 4 stars when all your competitors have 4.5 is going to make you the black sheep of the farm market.



Comparing with your listing(s)


You now know where your competitors stand in terms of product features, price and ratings.

Now, we have to find out how you compare!

Here’s a word of advice – do not do this yourself.

I recommend that you get a friend or even better, someone who’s completely uninvolved in your business to fill this out (and ideally fill out the competitors’ part as well).

Why?

We are naturally biased. We love to think that our products are the best. Isn’t that why we started selling them in the first place?

Unfortunately, this is treacherous for a competitor analysis on Amazon.

We need to have an objective analysis, else we cannot properly identify our strengths and most importantly, our weaknesses.

By having someone who isn’t familiar with your product complete it for you, not only do you avoid that bias, but you also get extremely valuable data on how your listing is perceived.

You may think that all the great benefits of your product are crystal clear – however, they may be to you since you spent months working with your product, but maybe a customer cannot grasp that by looking at your listing.

By replicating an authentic customer experience, your competitor analysis is much more likely to be representative of the customer’s point of view, which is what ultimately matters.

After all, they are the ones who decide what to buy – not you!


The next steps


Congratulations! You now have completed a simple, easy-to-use competitor analysis, which includes the following:

  • Your most important keywords
  • The top competitors of your niche market
  • The features relevant for your product
  • How important or impactful these features are
  • How your competitors fulfil these features
  • Your competitors’ pricing
  • Your competitors’ ratings and number of rating
  • How your product compares to your top competitors


But don’t pop the champagne yet.

An Amazon seller competition analysis is useless unless it results in real, actionable steps!

I have detailed some useful next steps in a more complete article on competing on Amazon, which I am sure you will find very useful if you’ve read this far.

You can read it here.

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