Potential Score AMZScout 0
Galina Zagumennova
by Galina Z.posted on 12.05.2018

Potential Score in AMZScout Extension

While researching a new product, it’s important to take the time to check several niches to determine which is best to enter. This is usually an extremely time-consuming process that involves analyzing parameters to understand the potential of each niche.

Before the use of software, Amazon sellers had to do the heavy data collection by hand, checking various factors that help determine whether this is the right niche for them. The number of sales, number of reviews, ratings, price, margin, listing quality, brand names, and competition are all indicators that collectively help sellers determine what their next move is. By hand, this process seems quite complicated and monotonous…

Our new innovative feature, Potential Score, simplifies this process. This ahead of the curve feature takes several factors into account when calculating a numerical score 1-10. The number estimates likeliness of success when entering particular product niches. 1 indicates a very tough road to success while a 10 indicates a product in this niche is likely to succeed.

What Parameters Do We Consider?

AMZScout’s Potential Score is the most comprehensive indicator out there. But why? How does it work? What parameters do we include in calculating Potential Score?

To check a product niche for yourself, run AMZScout Pro extension on a search results page. You will see the potential score on the top right of the extension. It ranges from 1 to 10:

  • 1-3. Bad :( Niche is highly unlikely to succeed

  • 4-5. Not good. Niche is unlikely to succeed

  • 6-8. Good! Niche is likely to succeed

  • 9-10. Very good! Niche is very likely to succeed

If you click on the Potential Score value, you will see additional details on each indicator included in calculating the score.

There is a green/orange/red scale opposite each indicator. Like a street light, the red light shows obstacles for a seller. Green says “Go,” because the niche lacks obstacles or the ones in place are easy to overcome.

1. Competition

Potential Score AMZScout 1

  • Number of products in the niche

     

    We consider the number of products in the niche. The lower number of products, the better for a potential seller.

  • The number of reviews

     

    We analyze the average number of reviews. If it is more 150, it’s difficult to compete because people prefer to buy products with plenty of reviews. As a new seller,  you will have to collect reviews from scratch. So, the potential score is decreased.

  • Listings quality

     

    If all LQS indicators in the niche are above 80 percent, it’s difficult to find room for improvement. Having a great listing yourself doesn’t necessarily boost your position among great listings. So, such niche would receive a lower potential score.

  • The number of AMZ sellers in the niche

     

    The more AMZ sellers there are, the lower the score.

  • Top brands competition

     

    We have a database of 1000 brand names. The more brand names in a niche, the lower the score since they expectedly sell significant amounts in the niche.

  • Monopolistic niche

     

    We consider a niche as monopolistic when just a few brands take a high percentage of sales in the niche.

  • Average rating.

     

    If most products in the niche are highly rated, it’s difficult to improve an existing product and reach the top of search results. So, a niche with higher ratings, get a lower total score.

2. Demand

Potential Score AMZScout 2

How is the demand? Demand is the most important indicator. It’s unlikely you want to sell something nobody wants to buy. Any Amazon seller wants his/her product to sell like hotcakes. So, in the “Demand” tab, are two parameters:

  • Sales

    . How high are the sales? Sales are the main factor considered. The higher sales; the higher Potential Score.

  • Product availability

     

    We analyze date first available of the products. If most of them are quite “new,” it’s considered good for the niche. New products interest buyers more.

3. Entering the Niche

Potential Score AMZScout 3

How difficult is it to enter the niche? The easier a niche is to enter, the higher potential score. Here, we include two things:

  • Product price

     

    Is the product in the desired price range? The preferred price should not be too low (difficult to get a good profit), or too high (requires higher investments).

  • Margin

     

    The higher the average margin, the better the niche. We consider 50%- 60% margin (excluding costs) as an average margin.

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