Running Product Research and Market Analysis on Amazon with DataHawk

Running Product Research and Market Analysis on Amazon with DataHawk

This article is an introduction to and a summary of our 5-steps ultimate guide for successfully conducting Amazon Product Research and Amazon Market Analysis using DataHawk. Detailed in-depth articles relating to each subsection are to be published over time. Are we good?


So, you're planning to launch a new product on Amazon or reposition a product you're already selling?

The very first thing you ought to do is a well-thought data-driven process of Amazon product analysis and Amazon Market Analysis within your target niche, and I'll show you how to run it like a boss.

Let's just be painstakingly concise: at the end of the day, succeeding on Amazon comes down to ONE absolute ingredient, and that is YOUR PRODUCT and how it stacks against the competition.

Because everything else flows from the product you sell. Be it pricing, potential market share, required investment, scalability, procurement, logistics, costs, competition, profit, and so on.

Now we could spend ages exploring those underlying parameters, but in the Amazon game, and particularly thanks to Amazon's infamous A9 then A10 Algorithm, I think it really boils down to 5 essential key success factors.

Before putting an end to this teasing, let me just emphasize the goal of this guide. My aim is not to lay out those 5 evident ingredients with some duck soup advice. Nope, I'm going to give you an edge, simply by showing you detailed examples of how to apply each of those 5 principles by leveraging DataHawk's powerful data insights and helping you intellectually crack Amazon's algorithm with DataHawk's Amazon seller tools.

Without further ado, here are 5 paramount ingredients you must master when selling on Amazon:

1. Amazon Product Research: Know Competitive Landscape

Product Research and Market Analysis on Amazon with DataHawk

First things first. The product you're selling on Amazon is going to be competing head-on with hundreds of other great products, dozens of which might be substitutes to yours. Some you might judge to be your direct competitors, some you may see as indirect competitors.

This competitive landscape will define the potential of your product, which is why you must have a clear and precise idea of how it is constructed. I'm talking about things such as:

  1. Pricing distribution
  2. Reviews distribution
  3. Rating distribution
  4. Product and listing quality distribution

To what extent do you know how your target market is defined in terms of the above items? I'm not talking just globally, I'm also referring to a page-level approach, meaning how pages 1 compares to pages 2 and so on.

Do you really want to launch a product priced at $100 in a market where page 1 search results are crowded with top performers priced $50 and have amassed hundreds of 5 stars reviews? Odds are you will struggle and probably fail, hindered by Amazon's algorithm that will spank you for your pricing decision, son.

With DataHawk, doing Amazon Market Research to understand your Competitive Landscape and analyze your competitors in detail is made easy. That's done instantaneously upon starting monitoring a Keyword that represents your target niche in two ways:

  1. DataHawk provides you with in-depth Amazon market analysis of the products that are ranking for that Keyword on Amazon through Key Performance Indicators (KPIs) such as their Average and Median PriceNumber of Reviews, and Rating. Maximum, Minimum, Low Quartile (lowest 25% percentile), and High Quartile data are also presented. Beyond giving such market research on a broad basis, DataHawk allows you to see how those KPIs vary by page as well, which is tremendously helpful as you crawl your way from low ranking pages to page 1 - and believe me, the differences can be gigantic.
  2. DataHawk also allows you to browse through the 200-300 products that usually index in the first 20 browsable pages of an Amazon search query, quickly and easily by using instant filters on desired ranges of Price, Number of Reviews, and Rating, sorting the results on an ascending or descending order, and applying tags or labels. If you're interested in monitoring a competing product in detail, you can elect to track it and its performance will be collected on a daily basis by our tool. Tracking a product with DataHawk notably allows you to follow its Keywords rankings and changes in its KPIs (Price, Reviews, Rating, Best Sellers Rank) while getting an estimate of its Monthly Sales. You can leverage DataHawk's Amazon sales dashboard to have your numbers on your tips.

Mapping out your competitive landscape and knowing it by heart is only that way that you will be well-armed to best position your product.

2. Amazon Market Analysis: Know your Pricing

Product Research and Market Analysis on Amazon with DataHawk

Pricing is King, and the typical Amazon customer is highly price-sensitive, seeking the best price/quality balance in the marketplace. Amazon's key customer resource is time spent browsing product listings and hence, their ultimate goal is to maximize one golden metric: the Net Revenue Per Minute. Let's call it the nRPM.

While you certainly and naturally think a higher price should drive a higher nRPM, think again: a higher price also means a lower conversion rate. And in the price-driven red ocean and constellation of social proof signals that Amazon is, filled with on-page diverting sponsored ads to lower-priced and high-converting competing products, you definitely want to be price-competitive.

Our data at DataHawk clearly shows it. On Amazon, there is an astounding correlation between price and ranking: a lower-priced product with low reviews will almost always beat a higher-priced with dozens if not hundreds of more reviews.

If the Median price of the products that are ranking on page 1 of a Keyword search query on Amazon is $100 and the top 25% highest-priced products are priced at $120, you definitely want your product to be in those ballparks and preferably below. Also, this certainly means you'd probably have zero chance at ranking at page 1 should you price your product at, say, $150, which is way above the Median and Top Quartile Market research figures.

When contemplating a new product launch or a reposition of an existing product you're selling, make sure you have appropriately and exhaustively done your market research in terms of how your competing products are priced. DataHawk can help you drive your pricing strategy and research on Amazon as follows:

  1. Identify a set of mid-tail Keywords (3 words) that best represent your product, and best reflect high-converting search queries for it, when taking into consideration its features, price, and quality- in other words, its overall positioning.
  2. Dig deep into those Keywords and analyze them by leveraging a tool like DataHawk. By tracking those Keywords on DataHawk, you would get their monthly Search Volume estimate and data from the Amazon market research tool.
  3. Analyze how the pricing is structured for each Keyword while mainly focusing on page 1 median prices.
  4. Leverage data around estimated Amazon Monthly Sales, Amazon Reviews, and Amazon BSR to see how the top performers are doing.
  5. Set your target price.

Keep in mind that pricing determines a lot of other components of your business including upfront startup costs, branding, margins, FBA costs weight, and so on. Chose wisely which product Average Selling Price (ASP) you would like to have when considering your competitive landscape and business goals.

3. Amazon Market Analysis: Know your Total Addressable Market

Product Research and Market Analysis on Amazon with DataHawk

Gauging the estimated size of each Amazon niche you're assessing can be tremendously helpful in deciding on which target market to focus, and especially in figuring out the potential market share and sales volume you may be able to capture based on the products you're selling, and how they're positioned within your competitive landscape notably in terms of pricing.

The assessment of your Total Addressable Market (TAM) can be done by analyzing the interest level of purchasers within that market, which is reflected by the monthly search volume related to the search queries that purchasers use when scouting for your product.

By knowing the search volumes attached to various product categories, not only can you have a proxy of the market opportunity on Amazon and the kind of sales volume you could expect in each one depending on how you rank for the keywords related to it, but you can also benchmark those different opportunities and better know which one to pick depending on your goals and on how the competition is on each one, using a clear and trusted metric: for instance, would you rather dominate a low-volume niche, or struggle to rank on a high-volume one?

Assessing your TAM on Amazon with DataHawk is very easy, just follow those steps:

  1. Identify a set of short-tail Keywords (ideally 2 words) that best represent the product categories you're benchmarking and track them on DataHawk. If you're in the leather goods space, an example would be assessing "leather bag" vs. "leather briefcase" vs. "leather satchel" vs. "leather portfolio" vs. "leather tote bag" vs. "leather backpack" etc.
  2. DataHawk allows you to discover the monthly search volume attached to each Keyword in the marketplace in which you're interested. This data is a trusted estimate pulled from Google itself. You're now able to have an estimate of the market opportunity or TAM related to each of those product categories.
  3. To get a dollar-based estimate of your TAM instead of relying on merely searching volume, all you would need to do is leverage DataHawk's extracted insights about how each product category is structured in terms of average product pricing, multiply that by the search volume, then further multiply it by a hypothetical "reach" or "click-through-rate" ratio that would try to reflect the effect of ranking at page 1 vs. page 2 on Amazon.

Armed with information about market opportunities via the lenses of keywords search volume will enable you to make much stronger product launch and business decisions on Amazon.

4. Amazon Product Research: Know your Required Budget

Product Research and Market Analysis on Amazon with DataHawk

Launch it and they will come?

Well, not really, and definitely not on Amazon where you need to invest money to push your product higher on Amazon rankings.

This is the very first thing I mean by the "Know your Required Budget" mantra: you ought to get an idea of what initial minimal investment you need to make to reach that minimal necessary ranking and reviews-based social proof threshold that would allow you to jump-start a recurring flow of sales on Amazon. In other words, know your required Startup Marketing Budget.

A good metric and indicator that can help you define your required Startup Marketing Budget is reviews and you can follow the framework below to leverage them:

  1. You need a minimum threshold of "social proof" reviews that would make Amazon customers feel comfortable clicking on your product's picture then buying it. Naturally and as you would expect, the higher the number of reviews your product has, the higher your click-through rate will be (the % of customers who visit your product's page after making a search) and the better your sales conversion rate will be. I would argue that 10 reviews are an ideal minimal target.
  2. Depending on your product and the keywords you're aiming to rank for in terms of how the competition is structured in them, you would need a certain number of reviews to be likely to rank at page 3, another higher number for page 2, and an even larger number of reviews for a chance to be at page 1. As such, and depending on your target sales velocity which is affected by your Amazon keyword ranks performance, you may consider collecting a larger number of reviews early on. Let's call this larger threshold your target Competitive Reviews Threshold.
  3. Using both those thresholds, you can budget for your product launch marketing budget on Amazon by using a hypothetical "reviews rate" representing the percentage of your customers who would leave a product review. Assuming a 7% review rate and a target threshold of 10 reviews, you know you would need 10/7% = around 140 orders to get those 10 reviews that would jump-start a minimal recurring flow of sales for your product. You can call those your Startup Launch Orders.
  4. To help those orders come in, you need to generate traffic to your product page, further entice Amazon's algorithm to make your product more prominent, and further encourage Amazon customers to convert more easily. And this is where you need to budget for Sponsored Ads and lowering your sale price in order to quickly generate those minimal 140 orders. As a general rule of thumb, aim for an aggressive cost of advertising of at least 70% of your sale price and lowering your sale price by at least 20%, you'll be able to raise back your prices incrementally later on.

Now that you know your target Startup Launch Orders figure, you can budget for its related fully-loaded procurement costs which would include the cost of purchasing those units from your supplier and shipping them to Amazon's fulfillment centers. Add up to that some additional units to give yourself more leeway and you're all set with establishing your minimal required launch budget.

DataHawk can help you better define your target Competitive Reviews Threshold by giving you data by market research about the competing products and their reviews distribution. This can be done by leveraging the following keyword-related metrics that DataHawk can instantly unveil to you:

1. The overall average, median, maximum, minimum, top percentile, and lowest percentile number of reviews of the products that are ranking for the keywords you're analyzing.

2. Those very same metrics on a page-level basis, i.e. how they look like on page 1 vs. page 2 and so forth.

3. With the above information, you would know how many reviews you would need to have a higher probability of ranking at each page for each keyword relevant to your product.

5. Amazon Product Research: Know your Product, Costs and Profit Potential

Product Research and Market Analysis on Amazon with DataHawk

By now, you're well-informed about how to drive your pricing strategy to be competitive on Amazon, you know how your competition is structured, you have a more precise idea of your market potential, and you have a clear marketing and procurement budget for your launch.

By leveraging all those helpful insights, you should be able to make a well-thought decision about your product features to be differentiated and competitive on Amazon while allowing you to reach your target sale price. Those product development or product picking decisions around your product features are what is going to partially define your final product cost.

Indeed, there are several additional costs you should consider to reach your final fully-loaded product cost and which should define your final contribution profit:

  1. FBA Costs which are affected by your product's weight and dimensions.
  2. Shipping Costs to get your products from your supplier to Amazon fulfillment centers, which are also affected by your product's weight and dimensions.
  3. Duties Costs which depend on your product, its country of origin, and the marketplace in which you're selling.
  4. Amazon Referral Fees which depend on your product category.
  5. Costs related to Customer Damaged Returns because yes, you will, unfortunately, have to bear those yourself.
  6. Marketing Costs which depend on how competitive your market is and how aggressive you want to be in your sales mix in terms of paid vs. organic sales.

When adding in all those additional costs, you should get to your final product contribution profit which would allow you to better gauge the product's potential and benchmark it against other product opportunities on a contribution profit level.


By nailing those five items in your Amazon product research process, you've put more odds on your side for a successful product.

6. How to do product research?

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