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Writer's pictureEero Manninen

Market analysis - a challenging but mandatory work phase before starting sales



Before starting to sell on Amazon, conducting a thorough market analysis is vital. This step may seem challenging, but it is a necessary step in investing in profitable Amazon sales and product lifecycle management. Market analysis allows you to identify risks, opportunities, price points, cost structure, and other factors to help you succeed in the competition. In this blog article, we will discuss the importance and benefits of market analysis and determine the risks and disadvantages associated with starting sales without proper research. In addition, we get to know the Helium10 tool and its use in identifying the product's potential. Finally, we will explain why you should choose us to help with the market analysis.

Why is it important to analyze the market before starting sales?

Before taking the step to sell on the Amazon platform, it is essential to understand the market situation and the competitive environment. Market analysis helps you understand the cost structure and the return potential of your investments. It also helps to identify opportunities offered by the market and avoid risks.

Investment in profitable Amazon sales and product life cycle.

With the help of market analysis, you can get information about the total size of the market, the target audience, and the competitive situation. This will help you evaluate whether the investment in selling on Amazon is worthwhile. The analysis also helps to understand the product's life cycle phases and possible volumes in different periods. In this way, you can plan sales and prepare for changes in demand and seasons, for example.

A clear understanding of the cost structure, i.e., a profitability calculation

Market analysis helps you understand the costs associated with selling the product. It gives you information about the price points you can set for your product and how competitive the price level could be. In addition, the analysis helps to identify potential expenses such as marketing costs, logistics, storage, handling customer returns, etc. This allows you to make a realistic estimate of the product's sales margin and profits.


Benefits of market analysis


Market analysis offers several benefits before selling on Amazon or any other marketplace. Here are some significant advantages:

You identify price points: Market analysis helps you understand market prices, and based on that, you can set competitive pricing. This will help you attract customers and improve your sales.

You identify the problems of the product category: By analyzing the market, you can detect possible problems or shortcomings in your product group. This allows you to offer solutions or improved products that meet customer needs.

Return rates: Market analysis will help you estimate the average return rate for the product category and reduce this risk. By knowing which factors can affect returns, you can make the necessary changes to the product or processes to avoid unnecessary losses.

You know how to estimate costs: By analyzing the market, you get information about expected costs, such as advertising costs, production costs, and logistics costs. This way, you can make accurate calculations and plan sales effectively.

You know how to prepare for volumes: Market analysis helps you estimate sales volumes in different periods. This enables you to plan stock orders and logistics to meet demand efficiently without over- or under-stocking.

Risks and disadvantages of starting sales without analysis


If you start selling a product without proper market analysis, several risks and disadvantages may result: You lose your money when the product doesn't sell: With a market analysis, you know if there is a demand for your product in the market. This can result in you investing time, money, and resources in product development and marketing. The product still needs to achieve the expected sales in the end. This can cause significant financial losses.


You will not succeed in the competition: Market analysis helps identify the competitors' strengths and weaknesses and the market's current trends. If you consider these factors, you may retain your competitive edge and stay caught up with your competitors. Succeeding in a competitive market requires a deep understanding of the market and its requirements.


Running out of stock when you don't know the volumes: Running out of stock causes harm to the product's Amazon sales. Amazon punishes out of stock by lowering the product's visibility in search results and setting sales restrictions. In addition, running out of stock leads to a significant decrease in ranking, making it challenging to sell the product and invisible to buyers.


Especially when launching a new product, running out of stock prevents taking advantage of the "honeymoon" phase, when the product gets a lot of attention and sales. You will then lose the opportunity to take advantage of the demand created by the launch and lose potential customers. It is, therefore, crucial to carefully plan and manage your inventory situation to ensure continuous product availability and avoid these adverse consequences.

How to carry out a market analysis? Try the Helium10 tool!

One powerful tool to perform market analysis for Amazon sales is Helium10. Helium10 is a versatile software that offers several tools and functions that you can use to identify a product's potential on Amazon. Among other things, it provides the following features:

Product Search: With Helium10, you can search Amazon for products related to your desired product group. You can view sales rank, ratings, prices, and competition information. This will help you understand how popular those products are and what kind of competition they face.


Competitive Analysis: You can use Helium10 to compare your competitors' products. This way, you can find out how well their products sell, what their strengths and weaknesses are, and what kind of marketing strategies they use. This will help you better understand the market and make better decisions about your products.


Keyword analysis: With Helium10, you can research keywords and their popularity on Amazon. This will help you understand which keywords are important and their associated search volume. This information will help you optimize your product listing and content optimization on Amazon to appear better among relevant search results.


Product data analysis: Helium10 provides tools to analyze product data such as images, descriptions, and keywords. Optimizing these factors can improve the visibility of your product and attract more customers. Helium10 helps you identify how your competitors use their product information and how you can differentiate yourself from them.


Why choose us for market analysis?

Regarding market analysis related to selling on Amazon, we have in-depth knowledge of Amazon's operating principles, market trends, and keys to success. We can offer you the following benefits:

Expertise: Over the years, we have developed a solid knowledge of selling on Amazon. We know the dynamics of different markets, and we know exactly which factors affect the success of a product. This helps us perform a comprehensive market analysis and provide you with accurate information for future sales.

Experience and industry best practices: We use the best methods and tools proven to work for numerous customers. Our team has years of international experience in selling our products and managing the product catalogs of large companies.

Individual approach: We understand that every product and marketplace is different. We offer a unique approach to market analysis based on the needs of your product, your company's goals, and the characteristics of the market. This ensures that you get the best results and can make informed decisions when it comes to sales.

Make informed decision-making based on data instead of guesswork and experimentation.

Market analysis is a challenging but necessary step before selling on Amazon or any other marketplace. It allows you to identify opportunities, avoid risks, clearly understand the cost structure, and make informed decisions regarding the sale and marketing of your product. Market analysis helps you identify the right price point, understand product group problems and return rates, estimate costs, and prepare for volumes.

It is important to note that carrying out a market analysis can be a challenging and time-consuming process. That's why we offer you help and expertise.


You can use our extensive knowledge and experience by choosing us as your partner. Get your market analysis here!


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