Get ahead of the game by performing competitor research. Not only is this crucial for standing out from the crowd in ecommerce, but it will give you direction for your dropshipping business. It is a key part of your dropshipping business plan, which ideally you will conduct before you set up your ecommerce business. Successful companies run a competitor analysis regularly to keep an eye on the market.
What exactly are the advantages of putting this research together?
Here are the pros:
Thankfully, conducting market research and finding information about your competitors is quite simple. It will require several hours to collect your findings, however, the main tools you need are easily accessible.
It's worth using Google, Bing, and Yahoo to compare paid adverts and organic ranking in the search engine.
Similarweb is a free website that lets you look up any online company and see key statistics such as volume of website traffic, the global ranking of the website, country and category rank, bounce rate, pages per visit, average visit duration, and a list of their top competitors.
Another free tool, CompanyCheck can check any UK company to see their financials, year established, names of the directors, shareholders, and nature of business. There are similar websites in each country, which you can find by searching for "company checker" and the country name.
This is a reputable market research platform that allows you to access articles, journals, and research papers. Emerald Insight has a range of open access papers as well as a paid subscription. Used by universities, librarians, and researchers, this platform is a quick way to find ready-made competitor analysis reports and market data.
Similar to Emerald Insight, BCC Research offers a huge database of published reports in a range of sectors including business and commerce.
The Porter's five forces model is a method of looking at the competitive pressure in an industry, as created by Michael Porter at Harvard Business School in 1979. To use this framework, use the following five categories to research and brainstorm the key points:
1.Degree of competitive rivalry
How competitive is it overall in the industry? How many rivals are there?
2.Power of suppliers
How much power do suppliers have in your marketplace? How easy is it for them to increase the prices?
3.Power of buyers
How much power do customers have? Are there many suppliers that they can choose from to find the best price?
4.Threat of substitution
What is the likelihood of your customers finding an alternative similar to your product?
5.Threat of new entry
Are the barriers to entry in your niche marketplace high or low? How easy is it for new competitors to enter the scene and threaten your position?
The easiest way to put your competitor analysis together is in a word document. Create a table or written paragraphs with headings corresponding to the five key points above. Put your information in bullet points to easily breakdown your research. Make your competitor analysis as detailed as you want, the more research you have, the better your business ideas for your dropshipping start-up.