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How To Use Amazon To Conduct Market Research

So you have the next great consumer product idea. You know developing a new product will be a major investment of time and resources so you want to do your research to validate the market. Time to turn to Amazon. It’s filled with incredibly valuable research.

Think of your customer and what they might search for to find your product. You’ll want to see what your competition looks like products you’re up against. Let’s say I want to develop a new off-road electric skateboard that will outperform anything on the market. I’d search for “off-road electric skateboard” and my results would look like this.

Seems there are a couple of existing products that fit the search description well but even the top six results are getting less relevant product search results. The 5th ranked result is a commuter electric skateboard made by Buffalo which doesn’t really fit the search description. The 4th ranked result only has a single one-star review indicating this may not be too competitive of a category. Looking at the next six results yields even less relevant results.

Since MotoTec MT-SKT-1600 1600w Dirt Electric Skateboard has the most ratings I’ll look at their product page first but I’d want to check the top few products in the category. On this product page, we’ll start looking for a lot of critical information starting with the product design. What are the main components of the product? For this electric skateboard example, we have the main laminated wood deck, battery pack, battery housing, remote controller, drive motor, trucks, wheels, bearings, and other small hardware. If I’m looking to make my own off road electric skateboard I’ll be needing the same types of components and try to see what parts I’d change to improve performance. Next, you’ll want to start looking at the range in price point to establish where your product would fit into the market. Since the apparent best seller product is selling for $629 we can see how that compares to the rest of the market by comparing that price to the other search results. $629 seems to be at the upper end of the price point for the category so it would give us the impression that buyers are more concerned about performance and branding than price. This also gives us the approximate manufacturing cost of the product. For this type of product, the Amazon retail price is likely 2-4 times the manufacturing cost. In this example, I would expect this product to cost $150-250 to manufacture. You’ll need to maintain a similar margin and this will help to establish some level of initial cost goal.

You can also get a general idea of what the sales volume are by using the site Find the category the product is sold under then input that ranking number into Jungle Scout’s free sales estimator to get an idea of what the monthly sales are. For our example, MotoTec MT-SKT-1600 is ranked #440,216 for Sports & Outdoors which Jungle Scout estimates there are 5 sales per month. Seems a bit lower than I would expect for this type of product. Amazon isn’t the only sales channel. These types of products could be better suited for direct sales on the company’s own website but the numbers on Amazon aren’t promising.

While it’s good to know your direct competitors, your product also fits into a broader market of substitute products. For our example, as an off-road electric skateboard, we are also competing with potential substitute products like street electric skateboards, longboards, mountain bikes, electric scooters, and other forms of personal transportation. Your product doesn’t have to be constrained to its specific niche. It is competing with many other products to fulfill a need in the buyer's life.

Looking under the “Sports Outdoors: Outdoor Recreation” category with the search term “electric” one of the top competing products is the Razor E100 Electric Scooter with an impressive 1,746 product reviews and 4-star overall rating. Its low price of $109.83 makes the price very approachable to users. Plugging in the rank of #3,016 in Sports & Outdoors to Jungle Scout gives us an impressive 990 estimated monthly sales. While this rather different product than the off-road electric skateboard we were looking at, it’s still helpful to take a look at the larger product category to see what makes the most popular items successful.

Perhaps the biggest goldmine on Amazon is in customer reviews. Here you can see exactly what customers value and where the current solutions are failing them. Going back to our earlier example the MotoTec MT-SKT-1600 1600w Dirt Electric Skateboard has overall great reviews with an average 4.1 score. Digging through the reviews we see a few common complaints about the build quality of the remote and the turning ability. If we were looking to make a new product we’ll want to make note of the praise and the criticism and see what you can incorporate into the design.

I'd recommend regularly monitoring the competitive landscape through the development as projects change rankings and new products enter the market. Continue to develop your product and plan on how your product will compare on features and price.

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