Branding on Amazon – Product Differentiation

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.



What is product differentiation?


Simply put, product differentiation is the process of making your product stand out to your target audience from your competition.

Product differentiation is critical for branding, as being perceived as providing a unique offer is what will give you a business advantage.

If there isn’t anything different – or rather, no perceived difference from the customer’s point of view – about what you offer compared to what other sellers might offer, then there is only one single factor that matters: Price.

As we’ve seen previously, competing on price is most often to the advantage of large companies that benefit from economies of scale, meaning they have a reduced cost per unit and can sustain smaller margins and as such, offer lower prices than other sellers.

As a small-scale seller, differentiation is going to be critical for long-term success.


Product differentiation on Amazon – What does it look like?


Let’s take an extreme example – bottled water.

Water is just water, right? How can you brand or differentiate that?

Let’s take a look at the first page results for “bottled water” on amazon.com:




As you can see, all results show branded products, each with a particular kind of product differentiation.

The first result, Essentia, differentiates itself by offering water infused with electrolytes.

Poland Spring puts itself forward as natural, 100% spring water.

Acqua Panna brands itself as exotic Italian water with historical roots which is a perfect accompaniment to fine food and wines.

Crystal Geyser focuses on a better price point for bulk purchase, somewhat similarly to Nestle’s Pure Life, which however differentiates itself by being “purified” through “reverse osmosis” (apparently you need to be a scientist to choose your water nowadays).

Finally, Fiji differentiates itself with being “Natural Artesian Water” and having twice as many “natural” electrolytes through volcanic rock filtering.

Now, the actual health difference between each of those might be minimal and the difference in taste almost imperceptible – but this goes to show the importance and impact of product differentiation.

Here, even with a product that one might think at first glance to be impossible to differentiate, clever marketers and brand managers have managed to position their products to have different features and so appeal to different kinds of customers.

Perhaps some want the most natural water there is. Maybe some exercise often and heard that they need as many electrolytes as they can swallow. Maybe they like their water to be exotic and come from the other side of the globe.

In any case, they fall in different categories, which allows for different kinds of products to be a better choice in the eyes of some customers compared to their alternatives.


Want to succeed? Start to differentiate.


You will want your brand to follow a similar structure, where your brand and its product are differentiated to be the best choice for a specific group of customers.

That way, you can be sure that you will make sales, regardless of the price or ratings of other listings.


So, that’s the basics of product differentiation explained. Next, let’s look at another absolutely critical aspect to branding, and in fact, any business that wants to survive, online or not: Value.

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