The Microeconomics of Amazon Shoppers

Amazon is the undisputed online shop for consumers around the world. It’s the go-to place for items not easily found in the buyer’s locality. It is a blessing for small-to-medium size businesses and has truly made the world a global marketplace. As the back-end logistics of Amazon expand, its reach has stretched to the most remote areas.

Demand is eventually fulfilled by the innovativeness of humans in manufacture, packaging and delivery. So, all a merchant has to do is discover a niche with substantial demand to form a business case. This important trigger is the basis of keyword gathering on the Amazon platform.

A searched keyword collection is analyzed to get a picture of the current market dynamics and see where demand is concentrated. This approach to e-Commerce eliminates the need for expensive market research, which is a barrier to regional and International trade. This is especially so for small traders who can only move so much stock at a time.

At the same time, there is industry-specific product rivalry of sellers scrambling for the known demand areas. In e-Commerce, the location of your competition is irrelevant since shipping times have leveled the playing field. All that really matters is the combination of price and quality. It therefore becomes important to know what keywords the competitors are using.

Retailers on Amazon have a main focus of simply clearing their inventory then deciding what to refresh. For distributors, the approach is more diversified based on a product line that has something for every market segment. All the data they need to decide what moves to make is availed on the keyword inspector.

Various domains have been established since Amazon has expanded out of the US. It is time-critical to know which demographic demands products in the relevant domain. It could be demand by a certain age group, economic class, education level, gender or just personality. Failure to act in time may cause the merchant to lose to competition or miss out on the craze of the season.

Real-time information from Keyword databases keep the sellers with metrics at their fingertips. The databases are accessed by tools that are customized for Amazon sellers. They are updated regularly adopting Amazon’s use of ASIN numbers. There is also information on total sales per ASIN to gauge their current market share.

When number of products sold over a domain outside the US is not available, the amazon.com domain is used as a benchmark. Many English-speaking countries are still using amazon.com thus market activities are representative of global trends.

In the style of Management Information Systems (MIS), the sellers’ tools have graphical style views. There are options for different product categories and product metrics, such as average price, reviews and sales per day. The organized data hides unnecessary details when trying to make sense of the market-place.

Since the tool presents standard data and views for all its subscribers, competitors actually communicate indirectly by the moves they make on the market-place. However, unlike the stock exchange, there is more real value than perceived value.