Competition is the #1 reason lots of newer sellers are afraid to start.
But really, it’s not all that bad.
See, choosing the right products to wholesale on Amazon isn’t too difficult if you know how to analyze the competition.
Today we’re going to dive into 6 ways I analyze competition on an Amazon listing and then go over a few tips and tricks for sourcing yourself.
1. Check the Buy Box Offer
Step one, of course, is to check the buy box offer.
We want to know who holds the buy box.
Is it Amazon? A third party seller with an FBA offer? A merchant-fulfilled seller?
If it’s Amazon, this item probably isn’t worth pursuing — for now. Check back later and see if they’re still in stock.
If it’s third-party or merchant fulfilled, this listing has passed the initial check. It’s time to analyze the sell thru rate.
2 Check the Sales Rank
Checking the sales rank of a product is crucial to check if it’s a worthwhile buy.
Step two is to check the sales rank of the product. We want to see how fast this SKU is selling – it’s going to prove useful when we go to check buy box rotation and offer count.
How many units does this SKU sell a month? 10? 100? 10,000?
If you’re unfamiliar with estimating sales, you can use a tool such as JungleScout to give you some surface-level estimation data for the rank.
If the sell-thru is too low (we’d recommend at least 24 units a month of sell-thru to consider the listing), it’s probably not worth pursuing for now.
3. Check the Offers Count
Now that we know the sell-thru rate or at least a decent estimate, it’s time to check the offer count.
Does this listing have a ton of offers and relatively low-sell thru, or is it a high sell-thru listing with a high offer count?
Deciding on just the offer count alone isn’t wise, but it will give you an excellent surface-level idea of how big the competition here is.
If you are looking at a listing with say, 24 units of sell-thru a month, and 50 offers, chances are this one will be a bit too competitive.
But to make sure, it’s time to analyze the buy box rotation.
4. Analyze the Buy Box Rotation
Step four to analyzing competition is to check the buy box rotation.
Analyzing buy box rotation at the beginning can be tough, but it’s crucial knowledge all wholesalers need to understand.
You’ll want to head over to the offers page. A quick trick is to go to https://amazon.com/dp/PRODUCTASIN, replacing PRODUCTASIN with the item’s ASIN identifier.
From here, we can check out the offers. How many third-party FBA offers are priced at the lowest price?
You’re likely to split those sales with them. Is the sell-thru still looking good?
If not, it’s probably time to pass on this one.
5. Analyze Other Sellers on the Listing
Step 5 is to analyze other sellers. Now that we have a decent idea of who’s got the share of the buy box, we can begin to take a deeper dive into pricing.
Are there any sellers within a 5 cent range of the buy box? If so, there’s probably some repricing activity going on. I would recommend counting them in your buy box offer count.
Revise your sales estimate to be (originalEstimate) / (buyBoxOffers + 1) – because remember, you’re going to want to include yourself in these estimates.
Is it still good sell-thru? If so, it’s time to do the last check – analyzing the repricing activity of other sellers.
6. Analyze Repricing Patterns of Other Sellers
This last step can take a few hours with a few checks – but trust me, it’s worth it. We’re going to take a look at the repricing activity of other sellers on the listing, to gauge their competitiveness.
Are there any sellers 1 cent below all the rest? This may signal an issue.
These sellers may be repricing down very frequently, which could signal the beginning of a price war.
Trust me when I say this – you probably want to avoid a price war if you’re a newer seller. This can create devastating losses if the other seller doesn’t have a floor on their repricer.
Check the listing now and write down the price (or use an updater tool like Sellonaut to graph out your listing’s price over time – disclaimer: I’m the co-founder).
Come back in a few hours and check the price. Has it gone down even a little bit?
If so, you could be looking at an ASIN where there is some serious price competition. It may be worth reviewing over the next few days to make sure it isn’t a long-lasting downward trend.
Otherwise, if it passes all tests, you’ve likely found a decent winner! As long as the ROI and profit are within your confines, it’s time to make a small purchase. Good luck and happy selling!