Identifying & Competing in a Saturated Niche

Identifying & Competing in a Saturated Niche

We always emphasize on the importance of the product hunting stage. We have talked about them in detail as well in 12 Tips for Product Hunting in 2019. High Demand with Low Competition, isn’t this what every Amazon seller is looking for? Experienced sellers know that if decisions are not taken on time then this equation can easily convert into High Demand with High Competition in no time, a situation which no one wanted to be in the first place while finalizing the product. Prior homework can save you from getting stuck with a product so here are some indicators that will come in handy in the product hunting stage.

Cost of Keywords. This is a major indicator to check high competition in a niche. You will have to dig into PPC campaigns and check the cost of each keyword. Anything above $2/keyword should send a chill down your spine as you should expect high competition which will be a budget buster while setting up your PPC campaign that is if you are thinking of venturing into the niche.

You can either use a sophisticated keyword tool that has an option of showing bids per keyword or create a ghost listing, listing created for testing purposes only. We recommend you to use a tool like Jungle Scout’s Keyword Scout which shows the exact bidding overbroad and specific keywords.

New Entrants. You can check the number of new sellers entering into the niche by using ‘Keepa’. Consider a listing as new if it’s there for 5 to 6 months. Lots of young listings are tidings of a price war ahead that you don’t want to get into. Before finalizing your product we recommend you pull out all listings and check the number of days Keepa shows against each to get a sense of the product category dynamics. Yes, this will require some leg work but consider this mandatory as it will eventually pay off. It’s still better to spend time here than in disposing of off inventory later when you hit the wall, your call.

Historical Price Trends. You can dig this data using Keepa again and you can clearly see the price set over a period by the merchant for individual listings. If the majority of sellers are lowering their prices with time then this is a strong indication that no one can sustain a high price point and that the niche is in the price war. This is worrisome especially if the same trend applies to mature listings that have been there for some time and are now forced to lower their prices due to high competition.

To avoid or to compete, that’s the question.

Competing in a Saturated Niche

The first step was to avoid the saturated niche but if you’ve decided to dive into the shark tank then let’s prepare and equip you for the challenge with direct guidelines. Get ready to think out of the box, this will require hard work and a big heart as you are about to pick up fights with monstrous sellers.

Saturated Niche. A situation when customers have tons of product options and sellers are found in abundance. Expect brands to give you some company along. You will have to figure out a way or combination with a hit and trial method to know what works specifically for you.

Product Differentiation/Customize. Unique features will make your product stand out prominently. Go through customer reviews for competitor’s products, see what has been bothering them and solve the issues. Negative reviews are usually more in detail than the positive ones, so you will have plenty of information scattered which you can compile and analyze. Moreover, if you are aware that some new variant has arrived in the market and that no seller is offering the product on Amazon, you might want to take a chance. The best way to try and get candid feedback is to share the sample of the product within your family or close friends and ask for candid feedback. You can later tell them the purpose of it to bring them on the same page. Please note the feedback and this will be extremely helpful before the product hits the market.

Bundling. Research which items people buy when they buy the product you are about to sell. This can be extremely powerful if you couple your product rightly with the most appropriate and relevant product(s). You can see these products on Amazon when you scroll down the product page in ‘people also viewed’ section. Add-ons attract sellers like anything and people will be quick to click to have a look. You might want to work on the packaging side to accommodate and work with your supplier on this.

Observation. Wander through similar competitive product categories where the situation is similar to yours. Be a fly on the wall and enjoy the price wars. Check characteristics of dominating sellers and how underdogs are handling them. Things will get clearer and you will quickly learn the art of fighting. You will want Keepa to be on your side for this along with Jungle Scout to get a holistic picture. We cannot emphasize more on this point as majority of sellers ignore this and rush towards procuring the products.

Pricing Strategy. Prepare mentally to price rightly with tight profit margins initially with gradual price increase gauging customer reactions on the way. You have to be extremely cautious here as your product will have fewer reviews compared with the customers and will have no social proof for customers to buy at a comparatively higher price. You can conquer this stage by experimentation and spending time on the product on a regular/daily basis.

Superior Customer Services. Amazon always places its customers first so you have to follow their lead. Respond to customer queries promptly and settle issues amicably always leaving them happy, whatever it takes. You have to maintain your account health at all times for favorable treatment from Amazon. Focus on customer care in order to get repeat orders/repeat customers. If you genuinely care for your customers and talk to them even after they have placed an order, customer loyalty will skyrocket for sure.

Generous Giveaways. This is when you inorganically or artificially increase your unit sales for Amazon’s algorithm to pick up the products’ selling trend which will bring you eventually on the first page. You need to enter with a generous mindset for at least 2 weeks. Monitor sales of your first page competitors for this either using some tool or using the well-known 999 methods. As per recent events, we do not recommend to use launch pads as Amazon is cracking down on people using them.

Optimized Product Listing. Product title, images, features, and description should be flawless with all the right keywords. Populate the most accurate keywords using an authentic keyword research tool like AMZ WordSpy and use them intelligently. Your product will find its way upwards once your listing is fully optimized from the sea of products and the conversions will increase drastically in no time.

Aggressive PPC Campaigns. Be prepared to spend loads on placing PPC bids for most sought out keywords. As discussed above $2 above for each keyword is an indication of an aggressive competition ahead. You need to be wary and prepared with deep pockets as this is financially exhausting for people usually. You will have to experiment here as well as changing your keywords and the bidding price more often or so to see what works for you the best.

Develop Alternate Channels. Place your product on other marketplaces like eBay to reach out to more online buyers and make sales through Amazon. This increases the surface area to interact and attract customers from similar platforms. You can reach out to established sellers of each platform and share your product details for them to pitch on the specific platform.

Drive External Traffic. Amazon loves external traffic and there is a drastic improvement in your ranking when external audience visits your product page. Work on the website, facebook page, blog, Instagram and youtube influencers to drag relevant audience to your product page.

Advanced Analytic Tools. You have to spend time and money in learning and utilizing updated authentic tools to have in-depth market insights. Marketing intelligence tools act as your eyes and ears and will be crucial in determining seller fate in a competitive environment you are about to enter.

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