According to SellerApp, there are over 12 million products displayed on the Amazon Marketplace and 9.5 million sellers globally. As such, selling on Amazon in 2022 is extremely competitive. The days where you could quickly establish an Amazon FBA business generating passive income with minimal effort are long gone. However, that doesn’t mean Amazon FBA still isn’t worth getting into. There is still enormous profit potential when selling on the world’s largest online marketplace, if you know how to set yourself apart. The key to success with Amazon FBA in 2022 is to differentiate your product.
Below are 7 tips to differentiate your product on Amazon FBA. Even if you’re already selling a product on Amazon FBA and are worried it’s too late, there are still ways to differentiate your product from the competition without actually changing the product itself!
What is Amazon Product Differentiation?
Running any successful business starts with a good value proposition. Your value proposition is the ability of your product to satisfy the needs or improve the circumstances of your customer’s life. Your goal as an Amazon seller is to differentiate your product to portray your product as being of superior value. Customers should feel confident that purchasing your product is their best choice. This could be that your product does the best job of meeting their needs, that it’s the best price for the quality received, or maybe it just is the most visually appealing to them.
Why Should You Differentiate Your Product on Amazon?
If you want to achieve any level of success on Amazon, you need an edge over your competitors. It’s clear that product differentiation plays a major role in whether a potential customer chooses your product over another. In turn, that drives your product’s visibility on the Amazon Marketplace.
Your sales lead to Amazon making more money through FBA fees. The Amazon A10 algorithm rewards products that sell more by moving them up in ranking. The higher the sales, the more likely it appears on the first pages where customers are most likely to see it.
If your product offer is too similar to the competition, you may get some sales from Amazon PPC, but your product will probably remain in the middle of the pack. It will be on an inconvenient page in the middle of the search results that customers won’t easily find. If you want to get your product in front of potential customers and convince them to purchase, product differentiation is essential.
1. Find an Unsolved Problem
Entrepreneurs and mathematicians have one thing in common, they are both problem solvers. As an Amazon FBA seller, you are helping to alleviate the problems of your customers by providing them a product that serves their needs. If the problem that your product is intended to solve is already being solved by too many other products, you will have difficulty succeeding with your Amazon business. To avoid this, look for unsolved problems in the market and determine if you can provide a solution.
For example, popular Amazon expert Travis Marziani found one of his best-selling products by noticing Amazon did not currently have what he was looking for. He was searching for a cocktail recipe guide for bartenders. After searching Amazon, he realized none of the product’s really served his need of being highly visual, quick to the point instructions for making popular cocktails. Using keyword research, he found that “bartender flashcards” was being searched on Amazon a decent amount. However, there was no product like that currently existed on the marketplace, so he created it himself.
2. Enhance Current Product Offering
Although finding an unsolved problem and providing a solution is a brilliant strategy, finding that problem can be difficult. Another option that is usually easier is improving a current product by enhancing it to set yourself apart on Amazon. You can:
For example, respected Amazon guru Tim Sanders in his Private Label Masters course carries out product research on children’s tents. He looks at what attributes the top selling tents have in common and marks them down as being important to include. He finds there are an optimal number of support poles, windows, type of opening, flooring, color pattern, etc. to include with his version of the tent by comparing the sales, ratings, and customer reviews of the current options.
3. Country of Origin
The majority of products sold on Amazon are coming from one country, and it’s no wonder why. That country is able to produce relatively good quality products quickly and at an affordable cost. Of course, that country is China, A.K.A. “the world factory.” EcomCrew estimates that over 63% of Amazon sellers are Chinese. Furthermore, Marketplace Pulse states that 75% of new Amazon sellers in 2021 came from China. That’s not even considering the many domestically based Amazon sellers that source their products from China too!
However, due to one reason or another, not everyone wants to buy products from China. In fact, a poll conducted in 2020 found that 78% of US adults said they would prefer to spend more on products if the companies that have their manufacturing done in China move their operations elsewhere. Although China can produce almost anything efficiently, there are many other countries that are known for and specialize in manufacturing various goods. Here are some Chinese alternatives that could be used as a selling point to differentiate yourself from the competition.
4. Custom Product Packaging
Your product packaging is part of your overall product offer and adds to the aesthetics of your brand. You can differentiate yourself from the competition by putting the resources into creating attractive branding for your product and incorporating that into your product packaging. Think about it. What has a better chance of leading to a repeat customer, word-of-mouth recommendation, or positive review? Your product showing up in a general cardboard box and cheap plastic wrapper for water protection? Or, the same product arriving packaged in an eloquent box with quality plastic as your customer unboxes it?
Custom product packaging converts by creating an elevated experience around your product that increases the value perception. You can also incorporate your product packing into your product images. This shows your customers exactly what they can expect to receive when purchasing from you.
Whether you are planning to bring a product to market or have already started selling, don’t underestimate the ability of custom packaging to differentiate your business from the competition.
5. Bundling For Better Value
Bundling is packaging multiple products into a single package and offering it to customers at a discounted price than if those products were to be sold separately. Bundling is an extremely popular strategy that many sellers use to differentiate themselves in a competitive Amazon Marketplace.
The bundled items should make sense as being included with the primary product and add value to that product in some way. Popular Amazon YouTuber Crescent Kao notes that bundling two primary products together isn’t the best decision. Instead, bundle your main product with another product that doesn’t add much cost to the buyer. Essentially, it should feel more like they’re receiving a bonus than paying for more for more products.
Finding a bundle idea isn’t too difficult. Once you have a product idea, you can scroll down the Amazon listing of a similar product to the “frequently bought together” section. Here, you can see what Amazon shoppers commonly purchase along with that product. If you’re having your product manufactured, your manufacturer likely specializes in the category of your primary product. There’s a good chance they also manufacture related items that you can bundle. You can check your manufacturer’s catalog to see if you can source your entire bundle from them. If so, you can get a cheaper deal for the overall package because you are purchasing more product from them.
6. Product Listing That Pops
Of course, it’s essential to differentiate your physical product on Amazon. However, it’s equally important to highlight those differences on Amazon by optimizing your product page in Seller Central. Even if you have a product that is superior to the competition, you will not convince many people to buy it unless your product listing stands out.
If you go through the process of joining the Amazon Brand Registry, you gain access to additional features that not all sellers are allowed. Sellers in the Brand Registry can use Enhanced Brand, or Amazon A content. Enhanced Brand Content extends your ability to showcase your product and brand.
It replaces the traditional plain text product description most sellers use and instead allows you a well organized, highly visual display to promote your product. Potential customers want all the information they can get before buying a product. Therefore, the ability to provide more information and visuals through Amazon A content is a major upgrade.
Another way to differentiate your product listing is to incorporate 3D rendered images to further show off your product. Although high-quality camera images are great for showing your product naturally, 3D rendered images take detail a step further. The laws of physics don’t apply in the digital world. You can showcase your product from superior angles impossible to capture with gravity and use perfect lighting.
Customers are also quick to look at product reviews, and choose to buy from sellers that other customers have had success with. High ratings with raving customer reviews will differentiate you from the competition. This is especially true when you share a product listing with other sellers and want to win the buy box. Since you share the same listing, price and product reviews are really your only way to differentiate yourself.
One strategy to get product reviews, especially when starting out, is to join the Amazon Vine program. Through Amazon Vine, you provide your products for free to verified Amazon reviewers in exchange for them to provide a fair review of your product. This can be extremely beneficial if you have an excellent product but lack sufficient reviews.
Optimizing your product page on Amazon Seller Central is crucial for differentiating yourself from the competition.
7. Engagement Outside of Amazon
Most Amazon sellers stop their efforts after making the sale. However, if you really want to take your product differentiation a step further, you can engage with your customers outside of Amazon post purchase. This is a great way to build the reputation of your brand to increase the likelihood of positive reviews and build brand loyalty.
Creating social media pages for your brand is an affordable method of interacting with your customers and keeping them informed about your brand. You can promote upcoming product launches, provide tips and recommendations on how to use your products or even get your customers’ opinions on which characteristics to include in your products. Yes, your customers could literally tell you how they want you to differentiate yourself from the competition!
Although Amazon provides its own customer service, if you’re selling through the FBA program, you could offer to provide some of your own support as well. This can be as simple as providing an email to answer any customer post purchase inquiries.
Another way to provide your customers with additional value after purchase is to include post purchase discounts. This increases the likelihood of the customer purchasing from your brand again while showing the customer you value their loyalty and want to continue serving their needs.
As you can see, there is ample opportunity to differentiate yourself when selling on Amazon. However, it’s shocking to note that 83% of people still fail at Amazon FBA for one reason or another. Differentiating yourself is just one piece of the puzzle when running your own Amazon store. You also need to spend the time and money on proper Amazon SEO by incorporating relevant keywords and Amazon advertising.
Therefore, it’s important to set realistic expectations and realize Amazon FBA is like a full-time job. Amazon FBA has become quite time intensive, which is why it isn’t our #1 best recommendation for making money online in 2022.