How to Calculate Your Market Share on Amazon
Your Amazon market share matters more than you think.
We all know that Amazon is worth a significant amount of money―$2.367 trillion, to be exact. This makes Amazon the second-richest company in the world, followed by Walmart.
As an Amazon seller, do you wonder how much of an influence you have on Amazon’s wealth and success? This is your Amazon market share. Not only is knowing this beneficial, but you can calculate it yourself.
Unlike other metrics, determining your Amazon market share requires more than a simple formula. You’ll need to have specific information on your sales figures and the profitability of your overall category.
Why Calculating Market Share Is Important
Over 2.64 billion people shop online. While eCommerce companies can sell a myriad of products, the most popular categories include electronics, clothing/accessories, and beauty/self-care.
Knowing your market share is more than a figure of success on Amazon. You’ll know the bigger picture of how you stand among the competition.
You can calculate it within your category. Understand that this isn’t information you can gauge from sales alone; you’ll also need to calculate the profitability of your selling category (or categories).
If you’re profitable in your category, you’re more competitive and hold a more substantial market share than similar companies.
Knowing your market share is also essential when expanding. Let’s say you sell clothing and want to expand to beauty. If you already have a strong prescence in apparel, it’s likely that you’ll also be successful selling beauty products.
How to Calculate Market Share
The better market share calculator you can rely on is yourself. Here’s how to discover your overall influence on Amazon and your category, as well as your place among the competition.
Get Your Sales Numbers
While your sales figures won’t say everything about your market share, they are still the first step. If you don’t know your sales, several tools are available to help you. You can find your sales reports on Seller Central, or you can use a third-party tool.
For best results, use an estimate of your monthly sales. If you sell in multiple categories, you can separate your inventory to get figures for each category, or you can also look at the numbers for your best-selling category.
There are similar metrics that you can also use. Examples include conversion rate, keyword share, and sales rank. Don’t use percentages―you’ll need raw numbers for the next few steps.
Estimate Growth
Next, calculate your estimated growth, ideally for your category.
How can sellers estimate their sales projections? This is where AI in eCommerce comes in. Sales estimators use intent data to gauge your monthly revenue, comparing this figure to future trends and past sales periods, to estimate future growth.
Sellers can use Amazon’s Revenue Calculator to estimate this amount. There are also numerous sales estimators available online, many of which are free to use.
Niche Profitability
Before you can find your overall market share for your category, first start by researching the profitability of your niche.
Many eCommerce websites will list category profitability for free, though you can also find this information on Amazon, Quora, Reddit, and Google Trends. It’s also worth checking any websites or sources in your niche.
Calculate Market Share
Once you have your averages, you can calculate your market share.
First, start with your market share in your category. Begin by examining the percentage of sales in a category in relation to its profitability. Divide your sales by the industry’s total sales. Remember to use the same period for both, i.e., monthly sales figures.
Once you divide these figures, calculate the percentage. That’s your market share for the category.
To find your Amazon market share, do the same step, except for Amazon’s monthly figures compared to your own. Turn that figure into a percentage to find your Amazon market share.
How to Improve Your Amazon Market Share
Improving your influence on Amazon boils down to one thing: increasing sales. Sellers can achieve this by enhancing their marketing, exploring supply chain solutions, and optimizing their business operations.
Marketing Personalization
41% of retail stores report having some form of personalization on their platforms. There are many ways that eCommerce companies can implement marketing hyper-personalization. Popular examples include virtual try-ons and AI stylists.
Scale Your Business
Another way AI can improve your profitability is by scaling your business in various ways.
Sellers can utilize AI to optimize inventory management and predict future sales and busy periods. AI can also help sellers perform routine tasks, such as posting on social media, managing ad campaigns, updating shipping statuses, and even sending email updates (like review reminders).
Improve Your Supply Chain
Your backend operations can make or break your business. Many of the aspects mentioned previously are part of your supply chain. In addition, the way you produce or supply your products and the fulfillment method you use can also impact your sales more than you think.
Do You Need Help?
Your market share may seem insignificant compared to other metrics. In reality, it shows how competitive you are and where you stand in your niche. If you need to improve, the key is increasing sales. Follow our advice to make your business more efficient and satisfy your customers.
Another way to increase your market share is by partnering with an eCommerce agency. An expert consultant can assess the profitability and size of your niche, as well as analyze the competition to identify growth opportunities.
The post How to Calculate Your Market Share on Amazon appeared first on AMZ Advisers.
