Below is one of my recent LinkedIn Post. I wanted to also share it here on my blog, as I think the data I collected and charts I built can be insightful to those of you selling on Amazon.
Is Amazon saturated? I don’t have the answer, but I do have some interesting anecdotal data (and some good news if you’re in the market for a massage gun).
I looked at a random product, massage guns. First, the evolution of the sale price for the current top 5 massage guns on Amazon. Most launched in 2020 (the first few months of data isn’t always available).
A few years after launch, the top products now sell for 90 to 37% of their original price – 63% on average. They might have used a skimming pricing strategy, but that is still a massive cut! Did they have to cut prices to remain competitive?
The second chart is where things get spicy. It shows the market indeed got more competitive: from only a few listings in 2019, there are now hundreds of massage guns listed on Amazon.
The other interesting data is that the earlier the product launched, the higher the price tends to be. In January 2014, products launched before 2020 are still sold for $100 or more, while the average sale price for the top 200 listings is $92. There is a good chance that new sellers had to enter this market with lower prices to become competitive. I am not an expert on this market, but this might be the case of a product that was once innovative and became commoditized (except for maybe the strongest brands that can afford to charge more).
So, what’s the takeaway from all of this?
Well, there isn’t much more to say. This data is a lot more meaningful if you operate in the massage gun market. But this is only a small snapshot of a very specific market (and doesn’t tell us about operating profits), and we’d need a lot more data to reach a conclusion on market saturation and price wars.
So why do I share these findings? I still think Amazon is a great opportunity for many brands, but success is becoming more difficult over time. This anecdotal data reinforces my opinion that a strong brand and value proposition are key for long-term growth.