If it wasn’t for competition, there wouldn’t be Amazon as we see it today. You wouldn’t be here reading this, BuyBotPro wouldn’t even be a twinkle in someone’s eye….
….it became a behemoth on the BACK of the competition it created
You may not feel it sometimes – well, a lot of the time perhaps – but it’s what provides the opportunity for the hundreds of thousands of Amazon reseller businesses that make a success of it.
If the competition was insurmountable then there would be a fraction of the sellers out there continuing to grow their businesses.
Analysing the competition is one of the BIG things to nail
All of the data is reliant on how competitors act and behave on a listing, so understanding how to read the competition data is going to be key to finding great deals.
Here’s the beginners guide to analysing the competition on Amazon….
….well, with a little deep-dive too!
The Competition Analysis Basics
The first port of call - and the home of the bulk of the data you will need to effectively analyse the competition - is the Competition Analysis feature.
Some obvious, and less obvious, stats will underpin your decisions
The table shows details of the top ten ranked sellers according to Amazon - the sellers who are eligible to win the Buy Box.
They are ranked in the order in which they will show to customers when they look at all the sellers on the listing page, though you’ll notice this does not always mean in Sell Price order.
It isn’t always the case that the lowest priced seller is the Buy Box holder
It is usually the case that Amazon themselves or FBA sellers will rank highest, even with a HIGHER price than MF sellers.
First off, there are some useful indicators in the Stock Level and Price columns to help determine the type of seller, and why they might rank where they do.
The most obvious is the colour-coding in the Stock Level column for each seller:
- Orange; Amazon are selling this item directly
- Green; FBA (Fulfilled By Amazon) sellers
- Blue; Seller-Fulfilled Prime – MF sellers bound by strict fast-delivery commitments
- Grey; MF (Merchant Fulfilled) sellers
The stock level column also shows, unsurprisingly, the number of units a seller is holding.
This can be key in deciding whether it is a listing you can compete on
Multiple sellers holding high levels of stock could well be a red flag. They may well act aggressively with their prices in order to shift stock….
….not in every case, however.
Using data from other BuyBotPro features to assess likely performance will put these numbers in context.
High stock levels with even higher sales is a GOOD sign
If sellers hold hundreds of units, but the monthly sales runs into the thousands, then there are plenty of sales opportunities for everyone.
In the case the sales are low with those high stock levels then caution would be advisable.
Balancing the sales with stock levels will be key in deciding if you can compete
Also in the Competition Analysis are the Profit and ROI for each seller, based upon the Buy Price you entered.
BEWARE: not all sellers have purchased a product at the same price!
The profit and ROI figures are useful to reference what you might achieve at similar a Sell Price, but you don’t know how much the sellers have paid for an item.
However sure you are – and we see this all the time in our Facebook community – that….
….you got the best possible price, don’t count on it!
Sellers could have used coupons, retailer credit, cashback offers or even negotiated a special price. Or they could have just purchased it from a cheaper source!
Seller reviews, in the final column, have less bearing on pricing, but will tell you a bit about the seller in question.
The fewer the reviews, the smaller the seller is the general rule
This can be interpreted in more than one way. For example, newer sellers may not have the experience to be patient with sales, or even understand the numbers as well.
Hover over the number of reviews shown in the box and you’ll also see the % rating of positive reviews….
….which can occasionally influence customers when choosing a seller to purchase from
Getting familiar with the numbers in the Competition Analysis will make it an “at-a-glance” feature in your deal analysis.
It is well worth paying attention to!
How To Compete With Different Seller Types
We mentioned the different types of sellers you will find in the Competition Analysis, and you will often need to make different considerations for each type.
Amazon are often considered the most challengin to compete with….
….but this isn’t always the case. They are obviously in a position to dominate a listing if they choose to.
It is their platform after all!
If they did this on too many listings then they’d soon put off other sellers and quickly lose a mountain of profit and fees.
Customers rarely discriminate on seller if there is a Buy Box
Very few will only buy if it means purchasing direct from Amazon. If you are in the Buy Box, and Amazon are on the listing but lower down the list in the Competition Analysis, then you are still highly likely to get that sale.
Use the Buy Box Statistics feature to check out how often third-party sellers pinch the Buy Box when Amazon are on the listing.
If Amazon dominate the Buy Box, as suggested in this listing, it could reduce sales opportunities
If the ASIN has high volume sales and third-party sellers only get 30-40% of the Buy Box, there are still a LOT of sales you can grab.
It isn’t too dissimilar with FBA sellers, though they can even be MORE aggressive
Using the Buy Box Statistics will reveal how often any one seller wins the Buy Box. If one dominates more than others, even if it isn’t Amazon, it may well mean they will price very competitively.
MF sellers might price lower than FBA sellers, but Amazon largely prefer FBA sellers for the Buy Box
One of the key things to consider is the proportion of MF sellers on the listing. In the example here, they are more dominant….
….offering a good opportunity for FBA sellers to pick up more sales
FBA sellers win the Buy Box far more often so, if you are in the minority, then you have an added advantage.
MF sellers aren’t ALWAYS going to be able to price lower than FBA competitors. The shipping costs aren’t always favourable for them, in fact they will have to adjust prices for stock they already hold as those costs continue to increase.
In the Competition Analysis, those that charge additional shipping costs to customers have the price shown in bold.
It’s an additional cost to customers, something FBA sellers don’t have to consider
Different seller types need a little different consideration so use the information to hand to easily make an informed decision.
Stock Levels And What They Mean
In isolation, the actual number in stock doesn’t mean a huge amount.
Two hundred held by one seller won’t be much of a deterrent….
….when there are into the thousands of sales per month
You can use these two datapoints to help determine the quantity you might purchase. Some simple arithmetic – making the assumption you will compete for the Buy Box – will give you an idea of how many each seller might sell.
The Totals at the bottom of the Competition Analysis will help here
Using the total that the top 10 sellers are holding gives you an indication of how long the stock in hand will last.
This ASIN will sell an estimated 1372 units this month, the Buy Box eligible sellers hold half of that in stock
It is also useful to know how many other sellers might be on the listing. The top ten are the ones eligible for the Buy Box, but in a fast-selling listing like the one above several may drop off.
If there are twenty or thirty more waiting in the wings this means you’ll likely face longer-term competition.
See the stock levels in a visual format in the Charts, for those who like pretty colours!
Stock levels won’t always be good news. It’s worth being wary of sellers with high levels of stock in a listing that DOESN’T sell as quickly….
….this can lead to desperation and a pricing war!
Also remember that MF sellers DON’T have to consider is Amazon storage fees. They are more likely to be happy to hold onto stock for longer. Yes, no one likes dead stock, but if a listing has history of selling then….
….sellers manually fulfilling orders can afford to be more patient
There are MANY factors in deciding whether to invest in a listing. Stock levels is one of the more nuanced ones.
It’s simple when you can quickly read the data, easily done in the Competition Analysis and supporting charts.
Pricing, Profit And ROI
The numbers that REALLY matter. The ones that will hit your top and bottom line….
….the figures that will make or break a business!
Ok, there are lots of numbers that come into the equation when deal analysing, but these are the crux of it for most sellers.
A relatively wide pricing spread suggests a listing that isn’t uber-competitive
If the profit and/or ROI don’t do it for you now, they might never do. In the Competition Analysis you’ll see what the current sellers are achieving, or at least what you would at their sell price.
Current pricing will tell you a lot about the way sellers are acting
A bunched set of prices through the top ten can suggest all the sellers are just gunning for sales now, and could be the start of a race to the bottom. The more sellers in the running for the low price, the more likely one or two – or more – could just make a break for it! 
A relatively steady price over suggests healthy competition
Looking at the BuyBotPro Charts and seeing what the trend is with pricing will reveal even more. If the price is holding fairly firm it might be you have a listing whereby the sellers are happy to share the Buy Box….
….taking it upon themselves to avoid price tanking
More evenly spread prices are what you are really hoping for though. Plenty of opportunity to take advantage if you need to get more aggressive, but also suggests more passive competition.
Profit and ROI follow hand-in-hand with selling price. Decide the type of pricing activity you are happy to compete with and BuyBotPro will let you know the vitals that will hit your bottom line.
The Offers & Reviews Chart
If you are a fan of charts and love a visual representation, this one will be a regular go-to for you.
For us, it can tell the best story of all for a listing
Reviews numbers are nice information to have, giving you a quick look at the level of seller you might be competing against….
….the Offers data paints a much bigger picture, though.
It tells you how many sellers have competed at any one time on a listing.
The trends this one chart shows make or break a lot of deals
There is a lot of detail you can dive into in the Charts, but this one is one of the simplest to decipher. The Offers & Reviews chart sits right beneath the main BuyBotPro Chart, and for a simple reason….
….they tell you almost everything you need to know on a lot of listings, and at a glance.
This is a common trend, but is a trend you might WANT to see
Seller numbers that fluctuate like the one above are usually a very positive indicator. It’s easy to take a look and think “great, there are hardly any sellers now – let’s jump on it”….
….but looking at the trend, you have more to consider.
There is nearly always correlation between seller number and sell price
As seller number increases, price often decrease. The same will usually be true of the opposite….sell price will go up as seller numbers drop.
Listings that peak and trough, and repeatedly, are common in Online Arbitrage. Products often go on a cycle of being discounted, so resellers snap them up when they do and – if they get in early – can make some great early profit.
The more patient, or those with the most flexible strategy, will then take advantage at the other end as other sellers sell out and drop off the listing….
….this is often the most profitable time for these types of listing
Of course, not all listings will show the same trend. A steady, or decreasing sell price, as seller numbers drop is not as positive – it may well mean it is uncompetitive, or a slower seller.
Equally unpromising will be one where seller numbers stay stagnant, and sell price doesn’t move.
Make this Chart one that gets at least a glance early in your analysis. You’ll soon see how seller number trends can influence your decision, and grow to use it religiously.
Seller Store Front
Even though this is a beginner’s guide, there are some more advanced techniques we’ve covered. Some of the more advanced features when reviewing the competition are still very simple to make use of.
The Seller Store Front feature is far more than a look into the competition
It has it’s uses for competition analysis. For example, you can have a look through a seller’s inventory active on Amazon and get a good idea of their selling strategy….
….are they competitive on all their listings? Do they specialise in one category or brand? Does this mean they have brand or wholesale deals in place? Are they a big or small seller?
What Seller Store Front really does is open up a wealth of SOURCING opportunities.
If another seller is selling a product on Amazon, so could you!
If you’re new to reverse sourcing – where you find products on Amazon first, and then source them from retailers – then this is a particularly advanced version of it.
The advantage of reverse sourcing is knowing that a product is listed on Amazon and, with Quick Look or doing a full analysis, you can determine if it might be a deal for you before sourcing it at retailers.
With Seller Store Front….
….you are much more likely to find products that aren’t gated
You can also make an assumption or two. It is likely it is available to buy from a retailer in your country, but also that at some point it will have been profitable as the sellers will have had to analyse it at some stage.
Use Quick Look and you’ll get a link to a Google Shopping search and discover if ANY online retailer are selling it, and how much for.
From there you are a small step from having discovered a batch of new deals….
….all from a deal analysis for one listing!
Every listing you analyse with BuyBotPro will show up to ten sellers with Store Fronts you can poach deals from.
If you are a beginner to analysing the competition, you are likely a newbie when it comes to sourcing too….
….this is a free, high-hit-rate way to find new deals and suppliers.
Starting out in Online Arbitrage can be daunting – as can starting ANY business. You have chosen a much lower-risk model than many other traditional businesses….
….and even more so with BuyBotPro.
The features in BuyBotPro break down a lot of the data you need to consider, not least the competition analysis we have covered here. For more easy ways to quickly dial in your deal analysis to get the results you want, check these out too:
7 Online Arbitrage Frequently Asked Questions: BuyBotPro Edition
Streamline Your Online Arbitrage Deal Sourcing With The BuyBotPro Island