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Know your Real Competition on Amazon

Published on January 28, 2020

About this video

In this video, we share one obvious example of competition on Amazon and how it affects your conversion rates. When sellers do their product research, in most cases one part of their decision-making process is looking at BSRs of most similar competing products. If it fits a certain range then they consider it.

As someone who works with a lot of data on a daily basis, I know how easy it is to get lost in details and oversee the bigger picture. It sometimes becomes hard to look at your prospective market as a whole. What I mean by that is - how many other ways are there, aside from your product, to solve the same problem to your customer?

On an example of the cat scratching post product, we explain why these sellers have to fight for the same customer with other sellers who sell a completely different product - furniture cover.

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Transcript

hi everyone this is Jelena from Amazonia PPC and today I'm going to talk to you about competition on Amazon a lot of sellers when they do their product research they take into consideration some of the most close competitors Aysen Spears are ranking they look at BS are ranked and then they see how it compares to certain ranges that they wanted to fit in and then that's what they take into consideration when they are deciding which product they want the private label but when it comes to competition in general on the markets you should take higher you should take a much widest point of view meaning that competition means that not only people who are bidding on the same keywords as you want to bid on but also how it affects you know your PPC campaigns and also how it affects your overall performance so the easiest way to explain this is on example like you know when you do your product research and when you do product development and then you start thinking okay how should I improve one of the dimensions of a certain product that I want to sell you start also exploring about what keywords are there what's the search volume for those keywords normally and then you estimated there's like enough demand and enough competition as low competition as possible for that product to go into that market but basically I have an example here that I wanted to share with you which is a keyword that's called cat scratching cover for couch and it's a basically a keyword you know that targets all these products that are like covers that you can stick to your couch to prevent your cat from scratching it and from this point destroying your furniture so that's like a product that's very popular but basically you know what what we can see over here is that there's competition various types of different probably dimensions probably different colors maybe even or different offerings in of how many pieces are offered there and you know different pricing and different social proof all of these products have and my point is that when you're looking at the specific product that all of them are fighting for the specific keyword you can notice that here there's this another competitor that's fighting for these keywords through a sponsor brands ad and now what does this mean this means that you know this this seller over here actually was wise enough to recognize that they have a competition that's much wider than what their product is basically what what you should consider when you are considering through doing the product research and considering whether that's a good product for you to sell you should think of what problem your product is solving that there are other products that are solving that same problem that's the question that you should ask yourself if there are other products that can solve the same problem here we have a typical example of two different products and I'm pretty sure that there's even more products that solve the same problem so people have a problem where their furniture is being destroyed by their pets and you know people have come up with two different approaches to solving this problem one of them is a cat scratching post and the other one is the cover that's like a protection for furniture which basically prevents both of these both of these things our near the towards preventing pets from destroying your furniture but they actually have two different approaches so one approach will appeal to one portion of that demographic that you're targeting but at the same time the other product will appeal even more to that same audience the problem here is that you're fighting for the same audience so not in all cases you know people will be willing to buy two different products to say to solve the same problem so you know you see the difference here is that you have like two different sellers selling two different products fighting for one customer that's where competition really comes into place that's how you really should look at competition so ideally when you're doing your product research if you know BSR metrics make sense to you this is like an additional layer of questions that you should ask yourself if there's any other type of product in the universal products that can cover and solve this same problem if there is a lot of different products that can solve that same problem you should ask yourself if your customers potential customers will be willing to purchase many different versions of solutions of that problem like for example maybe someone wants to be you know super safe and they want to both have like a cat scratching post and at the same time they want to cover their furniture to be like super safe but at the same time if you're selling you know a massager that's like a curved massager maybe someone who's looking for a ball massager basically it's two different types of massages and you know for sure that there's like thousands of different types of massages that someone can get and massages as tools to do that but at the same time if you're selling to that average customer who does massage themself certain areas of the back that hurt or something like that they will maybe you know buy one massager and they'll stop if it fits maybe they'll consider buying another one if this first one didn't work at all and it wasn't the right approach but you know that's like just like a comparison between the two where you can see that the first one is a really first case in first case we have a situation where someone would actually consider being safe super safe well on the other hand if someone will if we're talking about massagers maybe someone wouldn't be so open of purchasing it twice so that's what you should think of for example if someone's ready to if your customers are ready to buy twice from you so these are the things that you know for example are in the back end of doing PPC for example we target keywords that are very different you know here's the target furniture covers for a cat scratching protection are very very different from cat scratching posts but at the same time you know these these two keyword universes they are targeting the same audience which is the problem that cuts your conversion rates in half basically if if you are not in that niche where people are ready to buy multiple products they're you know either cheap or have any kind of other competitive advantage so this is something that you should keep in mind doing your product research but also when you're doing your PPC just knowing what to expect and in cases that you're getting you know with product launches 200% a cause that just doesn't drop over time then maybe this is the reason maybe you should reconsider reverse engineer your product research methods and little step up with the competitive research game thank you for watching and I hope that this was useful and it was an eye-opener for you

Frequently asked questions

Q: Why is BSR alone not enough to assess competition during Amazon product research?

A: BSR tells you how well a product is currently selling relative to others in its category, but it does not tell you the full picture of who you are actually competing against for the same customer. Two products can have strong BSR numbers and appear to serve different niches while targeting the same underlying buyer problem. If your product and a structurally different product are both solving the same problem, you are competing for the same purchase decision, and that competition will affect your conversion rate in ways BSR data will never reveal.

Q: What is substitute competition on Amazon and why does it matter?

A: Substitute competition refers to products that are different from yours in form but address the same customer problem. The example from the video illustrates this clearly: a cat scratching post and a furniture cover are different products, but both solve the problem of a cat destroying furniture. A customer who buys the furniture cover is unlikely to also buy the scratching post, which means both product types are competing for the same single purchase. Understanding substitute competition matters because it directly affects your conversion rate and your PPC efficiency, since you may be bidding against keyword universes that pull the same audience in a different direction.

Q: How do I identify substitute competition for my product before launching?

A: Start by framing the core problem your product solves, not just the product category it belongs to. Then ask: what other products exist on Amazon that a shopper might buy instead to solve that same problem? Search for those alternative solution types and look at their BSR, review counts, and the keywords they rank for. If strong alternatives already exist with large sales volumes and high review counts, that is a signal your addressable market is smaller than the raw keyword demand suggests, because a portion of that demand will convert on the alternative solution rather than yours.

Q: How does substitute competition affect PPC conversion rates and ACoS?

A: When substitute products exist and are actively ranking for adjacent or overlapping keywords, a portion of your paid traffic will come from shoppers who are still evaluating both solutions. These shoppers are less decided and therefore less likely to convert, which pushes your conversion rate down and your ACoS up. If you are running a launch campaign and your ACoS stays consistently high despite good listing quality and competitive pricing, this is one of the patterns worth investigating: the buyer pool for your target keywords may be split between your product and a different category of solution.

Q: Should substitute competition change my product selection decision?

A: It should change how you evaluate the potential of a product, not necessarily eliminate it. The key question is whether customers in your target market are likely to buy multiple solutions to the same problem, or whether they will commit to one and stop. In categories where buyers tend to layer solutions, such as pet care, substitute competition is less damaging. In categories where a buyer makes one purchase decision and moves on, such as a single-use tool or a one-time accessory, substitute competition directly reduces your effective market size and makes profitable scaling harder to achieve.