Why Competitor Analysis Is Essential In Building Your Dropshipping Business

Source: DHgate, Tag: Dropshipping

Competitor analysis is a good way to identify what your competitor is doing right. Find out the best way to get the insight into your competition.

When it comes to building a successful dropshipping business, competitor analysis is crucial in analysing the competition and grasping an understanding of the market. Not only can investigating your competitors help you decide what type of products are popular and what you should be selling on your online store, but it can also give you the edge in creating effective strategies and making smart business moves.
But how do you analyse your completion and what should you be looking out for? We take a look at some of the things that you should be keeping a close eye on.
What is competitor analysis?
Competitor analysis is a strategy in which you identify competitors operating in the same market as you and research their products, sales, and marketing strategies.
How to conduct a competitive analysis
Knowing how to expertly conduct a competitive analysis can help you learn the ins and outs of how your competition works, and identify possible opportunities where you can out-perform them. Follow these competitive analysis strategies and you’ll uncover an insight in your nearest competition in no time.
Search engine tools
Search engines like Google are a crucial tool in giving you the competitor insight that you need. Using tools like Semrush can help you learn how competitors generate traffic to their online store and give you a deeper understanding of a competitors’ organic traffic and their budget spend for targeted ads and paid traffic.
Using Semrush will also allow you to monitor your competitors’ social media audience growth and uncover the topics that generate the most mentions and engagement online.
Search engine tools also have the unique advantage of helping you identify gaps in the market by spotting keywords that have yet to be utilised. For example, while pet products may be a popular search online, you may be able to develop new products and uncover potential market trends by selling vegan pet products and discovering a niche product that has yet to be tapped into.

Social media
Speaking of social media, analysing your competitors’ social media platforms is essential in getting an understanding of their marketing strategy and audience engagement. While using search engine tools like Semrush will give you the ability to compare social media engagement metrics and analyse user interaction, it’s also worth examining your competitors’ social media platforms organically and getting a feel of the type of content that they are producing and looking at ways in which you can further improve upon your content strategy. More importantly, it can also give you a feel of the type of consumer the business attracts and their characteristics.
performing a competitor analysis on rival businesses social media accounts may also give you an overview of deals and promotions as these are generally heavily advertised on these kinds of platforms. Take note of the competitor’s pricing and any discounts that they are offering customers and look at ways in which you can further approve upon them. And finally, the whole point of having social media is being sociable. Try to determine the frequency of content posts while grasping if certain topics resonate better than others and establish the most effective times throughout the day to ensure high efficiency of engagements.

Review sites
Scouting customer review sites like Trustpilot and Angie's List are beneficial for any business that wants to see just how the competition is doing. Not only do customer reviews highlight where your competition is failing to meet customer needs, but they can also give you a perspective of a business from the viewpoint of a customer and help you understand the values and expectations of online consumers.
For example, if a business has multiple reviews complaining about the quality of its product, you will be able to get an overview that quality control is not exactly high on the list of priorities of this particular business. And while you may not be in the position to match on price, you can certainly use the intelligence uncovered to begin investing in efficient quality management in ensuring corrective actions in the manufacturing process of your products.
Performing a competitor analysis and researching customer reviews will ultimately determine what's missing in a competitor's product, and help provide you with a benchmark against which you can measure your business growth, while also giving you essential customer insight to further improve upon your product and service.

Other competitor analysis key points that you should look for
The better you understand your competitors, the better chance you have of beating them. The information that you uncover from performing a competitor analysis can help you evaluate opportunities and understand market trends better.
While analysing your competitor's using the methods covered are helpful, other things that you should be looking for when analysing your competition is:

• • Type of products that they sell

  • Who are their target customers?

  • What are their best-selling products?

  • The price point of products

  • Google advertisement positioning

  • Shipping policies and prices

  • Key features and benefits that they provide

Summary
Competitor analysis is a good way to identify what your competitor is doing right. But while this information is critical for staying relevant, it is also important to remember to differentiate yourself, especially in an oversaturated market.