Selling on Amazon is easy. That’s why everyone does it. Creating your own private label brand and consistently making a profit on your own products is another story entirely. While the process of product and market research remain the same, private label sellers have to compete with not just brand names but also with each other.
As an Amazon merchant, there are two Amazon private label strategies you can implement:
- You can duplicate products everyone else is manufacturing and selling, perhaps making products marginally cheaper, faster, or throwing a cup coaster into the bundle. But when every seller is using the SAME tools based on Amazon Best Selling Rank (BSR) everyone ends up with the same product. For example, there are over 100k toilet paper holders available on Amazon today.Or…
- You can develop something that is innovative and truly different. Where do you find the market research to achieve that? It’s already on Amazon. By reading reviews and understanding the customers narrative, particularly the negative reviews, you can learn enough to create something that stands out and solves a problem.What do Amazon customers dislike? What are they complaining about? What do they hate? Where are they frustrated?Amazon’s platform offers everything you need to learn what customers want. If you look for it, you can deliver on their needs.
Being a disruptive brand on Amazon begins with doing what others are not doing. This is where you have the opportunity to create sustainability.
And it’s really not that hard to do, it doesn’t need genius foresight. It does require seeing and reading what others don’t and going the extra step to read those Amazon reviews. Knowledge is everywhere on Amazon, you just have to find it.
However, it is true that the gestation of a unique product does take longer than an off-the-shelf product on Alibaba. It takes some creativity. You need some additional thought because you can’t just hit a button and sort based on weight, ranking, category, price, FBA fees.
From Product Development to Sustainability
OK so, you have a product, now what? A lot of companies stop there. They find a product that works and they stick to it, even when the market continues to evolve.
It’s inevitable that the herd will copy you. When the masses using the same BSR tactics move in your direction, more will follow suit. It’s scary. It’s also one of the reasons why 80% of small businesses fail within 3 years. Copy cats recreate your product faster, cheaper, and in new colors, market demand changes, and sales will eventually drop.
Here’s where you need to be on the heels of the next product. You can’t linger on your success for too long. We see an average of a 6-month window of opportunity to own a unique product, and in some categories, it’s much less. Continuing product research will give you the tools to continue to stay ahead of the curve so you keep making sales.
When Steve Jobs launched the first iPhone, he knew he had a 6-month window until others followed suit with a copycat touchscreen phone.
But…Steve Jobs and Apple had a system. And look at them now.
It’s easy to knock-off a private label product, but an innovative business system is much harder to replicate.
Using Product Lifecycle Management (PLM)
Every product has a lifecycle, typically charted into 4 stages of introduction, growth, maturity, and decline. The ideal place to jump on is during introduction, when you’re either launching the product or one of the first resellers. For most Amazon retailers, new products make up about 27% of sales. During the second stage, typically about 3-6 months after introduction, people start to copy the product and resell it under new or generic brands. Here, you have more competition, but you still own the buy box and you can keep it and stay on top of search for a long time. By the third stage, maturity, the market is saturated and there’s too much competition for you to really stand out – even as the original seller. Every product also has a decline, either when people lose interest, when the social need for the product dies, or when the product is replaced by something newer and better.
For some products, these stages move very quickly. This is known as a fad or a trend. In other, it moves very slowly and products can stay in stages of maturity for the foreseeable future (for example classic jeans or a light switch).
Understanding where your product is in its lifecycle will give you a good idea of how to compete, when your product sales will start to decline, and when someone will likely reintroduce your product at a more attractive price point than you can afford.
Bringing Research and Creativity Together
You can determine where your product is in its lifecycle by charting growth and competition. Upward growth means the product is in the first two stages, steady profits means that the product is mature. Similarly, the saturation of competition can tell you whether a product is still being introduced or growing or whether it’s in decline and ripe for being replaced by something better.
But, you don’t have to do it all yourself. You can use a system like Skubana to automate your business so you can keep up with product lifecycle and inventory management. Not just on Amazon, but also on Jet, Walmart, eBay, Shopify, and anywhere else you’re selling.
What you have to do is stay on top of your customers, market changes, and reviews – so that by the time your product reaches maturity, you already have something else ready to go. Monitoring your own reviews, forums, and competitor products – as well as products not in your niche will allow you to continue to check the customer narrative to decide what’s missing, why, and how you can fill that gap.
Understanding your product and its lifecycle allow you to make smart decisions, but understanding your customers will give you the edge to stay ahead of the pack.
In conclusion, there’s a lot of information available on Amazon and in your own sales data that will help you develop and plan unique products. But it’s not enough if you don’t keep moving. Think about what systems you can put in place that will give your company the speed, agility, and efficiency to lead the curve.
Everyone on Amazon is going the same way. The herd mentality creates an opportunity for you to zag where others zig.
Trusted by more top sellers than any other platform on earth, Skubana acts as the central nervous system of your operations. It unifies all the tools you need to run your business, automates all the repetitive tasks, and even thinks for you about profitability, forecasting, and demand planning. On top of it all, it allows for unlimited extension of possibilities through an App store ecosystem.
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