- The First Step – Research Overall Product Viability
- The Second Step – Break Down the Data by Specific Product Designs
- The Third Step – Identify the Most Promising Product Design
- The Fourth Step – Develop the Product Listing for the Selected Design
- The Fifth Step – Expand to Additional Designs
- Wrapping Up
Video Blog Script
When selling products on Amazon using the Fulfillment by Amazon (FBA) program, one of the most important steps is selecting the right product to sell. With millions of products already available on Amazon, it’s crucial to identify an item that has high consumer demand but low competition from other sellers. This is where amazon market segmentation comes in handy.
Amazon Market Segmentation is the process of dividing a broad market into smaller segments based on specific characteristics. When preparing to sell on Amazon FBA, you can use amazon market segmentation to analyze the different designs, features, or models available within a particular product category. This allows you to zero in on the specific version that represents the greatest opportunity.
For example, a search for “yoga mat” on Amazon reveals pages of results for the same core product. However, there are many variations when you consider factors like size, shape, materials, thickness, texture, and color patterns. Yoga mats targeted for home use may be different from ones intended for hot yoga studios. Using amazon market segmentation, you can parse the data to identify the most promising yoga mat design to focus your efforts on.
In this blog post, I’ll cover the step-by-step process for using amazon market segmentation during product research for Amazon FBA. Selecting the optimal product design is crucial for maximizing sales and minimizing competition. By leveraging market data and segmentation, you can determine the best path forward. A targeted approach sets up future success as you expand your Amazon FBA business.
The First Step – Research Overall Product Viability
When you have a product category in mind to sell on Amazon FBA, the very first step is conducting in-depth research to analyze the overall viability of that niche.
You’ll want to gather data to assess both the market demand and competitive landscape if you were to enter that space. This high-level view will allow you to determine if the broader product area is worth pursuing further before diving into more granular segmentation.
A great way to perform this initial research is using Helium 10’s market intelligence tools. Helium 10 offers robust data pulled directly from Amazon to provide key insights without guesswork.
For instance, you can use the Helium 10 Cerebro tool to get an overview of the total estimated revenue and number of sellers for a particular keyword search term related to your potential product. This gives you an at-a-glance understanding of the depth of the market.
Higher total revenues suggest stronger consumer demand. More sellers indicate a competitive landscape. But don’t rule out a product just because other sellers exist – the key is digging deeper into the dynamics at play.
Helium 10’s Magnet tool also provides additional data points to inform your decision during this initial research phase. Magnet shows average prices, Best Seller Rank (BSR), estimated monthly units sold, and more.
For example, if you were exploring “yoga mats” as a potential product, Cerebro would quickly show you that the total estimated yearly revenue for that keyword is $4.3 million. Magnet would then let you see that the top yoga mat listing has a BSR of #138 in Sports & Outdoors, selling an estimated 1,700 units per month at an average price of $28.99.
Taken together, these Helium 10 tools provide the 30,000 foot view of whether a given product niche merits further investigation. Allow the data to guide your decision-making during this first step.
The Second Step – Break Down the Data by Specific Product Designs
Once you’ve determined that the broader product category has merit, the next step is to dig into the specific product variations available.
This involves segmenting the market data you previously gathered from Helium 10 tools like Cerebro and Magnet. Now, you will filter that data by the different designs, models, or feature sets within the overall niche.
For example, let’s say your initial research pointed to “stress balls” as a viable Amazon FBA product category.
When you search for stress balls on Amazon, you find:
- Standard round smoothie stress balls
- Spiky texture stress balls
- Cute animal shaped stress balls
- Glitter filled liquid motion stress balls
- Stress balls with company logos
Each of those represents a different design segment within the overall stress ball market.
In this step, you would go back through Cerebro and Magnet and filter the data for each of those segments. Take the total monthly revenue for “stress balls” and break it down by the revenue estimated for each specific design type.
Do the same for the other metrics too – filter the number of sellers, average price, Amazon Best Seller Rank, and reviews by the different stress ball designs.
This gives you a clear picture of which designs within the market have the highest sales and lowest competition. It also shows which segments might already be dominated by established sellers. You can then truly compare apples to apples.
By parsing the data this way, you ensure you select the stress ball design that offers the greatest opportunity. And you avoid just picking the first stress ball product you see, which may actually have low demand or high competition.
Segmenting broad market data into specific product designs allows for informed, strategic decisions during Amazon FBA product selection. Take this vital step before moving forward.
The Third Step – Identify the Most Promising Product Design
Armed with segmented data for each product design variation within the broader niche, you can now identify the specific segment that represents the biggest opportunity.
Analyze the data points for each design filter and compare:
- Total estimated monthly revenue
- Number of sellers
- Average price point
- Amazon Best Seller Rank (lower is better)
- Reviews (aim for 4+ stars)
Look for the design segment that has strong revenue and a lower number of competitors. A product with only a few sellers indicates less competition once you enter the market.
However, also watch out for any single seller dominating a particular design. For example, if one stress ball design earns $200k/month but 90% of sales are from one seller, that signals high risk of running into that top competitor.
Factor in the average pricing as well. Higher priced products generally mean higher margins, though you must balance that with having a competitive offer. Consider which designs can support PPC advertising after launching.
Finally, compare the average ratings and reviews across the top design contenders. Positive reviews suggest the product meets customer needs. Pay attention to any consistent complaints that you could potentially improve upon.
Evaluating all these data points will steer you toward the most promising specific product design to focus your Amazon FBA efforts on.
Rather than wasting time on a mediocre segment, the one you select out of this process should offer the greatest chance for sales and minimal competition. This strategic approach is far better than guessing!
The Fourth Step – Develop the Product Listing for the Selected Design
Once your thorough research and data analysis has identified the most promising specific product design to sell, it’s time to develop your Amazon listing.
Focus all your time and energy solely on optimizing for the one design segment you selected:
- Perform keyword research to build your listing for keywords related to that design
- Create unique, descriptive title, bullets, and backend keywords around your targeted design
- Write compelling copy and select imagery that speaks specifically to that variation
For example, if you had decided to launch a liquid motion glitter stress ball, your listing should be laser-focused on that type of stress ball.
- Your title and bullets would describe the mesmerizing motion and glitter filling
- Your keywords would be like “glitter stress ball”, “liquid motion desk toy”, etc.
- Your listing copy would emphasize the calming visual stimulation
Optimizing your listing for your selected design allows you to maximize visibility and conversions.
You can then refine and improve your listing over time as you gain traction on Amazon. Monitor your reviews to identify opportunities to better meet customer expectations.
Use A/B testing to try different copy, photos, pricing, etc. and stick with what performs best. Work your way up the rankings using this optimized listing for your chosen product design segment.
With a strategic, focused approach to launch and market just one variation rather than trying to be everything for everyone, you set yourself up for initial Amazon FBA success.
The Fifth Step – Expand to Additional Designs
Once your Amazon FBA sales are established with the initial product design you selected, you can consider expanding your offerings.
Leverage the beachhead you have created with your first listing to launch additional variations:
- Start by adding the second most promising design from your initial research. You already put in the work to identify which segments had potential.
- Create a separate listing optimized for the keywords and features of the new design.
- Drive traffic through your existing listing (“Customers who viewed this item also viewed…”).
- Build on the positive seller reputation you have developed.
Adding more designs allows you to capture more market share within the broader product niche.
For example, after successfully launching your glitter stress ball, your research showed that squishy animal stress balls had potential too.
You can create a new listing specifically tailored to keywords like “squishy stress animal”, “cute stress ball”, etc. Include photos of the different animal options.
Since you likely ranked well for “stress ball” keywords already, you can upsell to customers viewing or purchasing your glitter ball.
As an established seller with positive reviews, you have credibility out of the gate with additional products. Customers trust you to deliver quality.
The key is resisting the urge to add too many product variations too fast. Scale up designs deliberately once the preceding one gains traction.
Jumping into a new design before you have optimized your initial listing can spread your efforts too thin. Build on each success before expanding your catalog.
Using amazon market segmentation to select the optimal product design is a strategic imperative when launching an Amazon FBA business. By leveraging data to identify the specific segment with the highest potential out of a broader niche, you set yourself up for success and avoid wasted effort.
Begin with thorough research into overall market viability before breaking the data down by product variations. Evaluate each design’s metrics side-by-side to determine where opportunity lies.
Develop your Amazon listing around the targeted variation you select to maximize relevance. Only after gaining traction do you then consider expanding to additional designs incrementally. With this focused, step-by-step approach, amazon market segmentation provides the blueprint for growing a profitable, sustainable Amazon FBA company.
The key points are:
- Amazon Market Segmentation allows you to identify the best specific product opportunity from a wider niche
- Research overall niche viability before segmenting data by product designs
- Compare metrics for each design to determine the variant with the greatest potential
- Build your initial Amazon listing specifically around the selected targeted design
- Only expand to more designs after optimizing success with your first product
- This strategic process results in an effective Amazon FBA business model