How to Properly Forecast for a New Product on Amazon, Utilising Amazon Data, Helium10 & Jungle Scout

Today I'm going to show you how to properly forecast the amount of inventory you should buy when launching a new product on Amazon. But before we dive in, don't forget to subscribe to our channel. We have tons of Amazon PPC and FBA content coming up that you won’t want to miss, along with a wealth of past content that can help you improve your Amazon business.

Step 1: Use the Product Opportunity Explorer

The first tool you want to utilize is the Product Opportunity Explorer within Seller Central. Navigate to the category you’re planning to sell in. For example, if you're selling home and kitchen curtains, drill down into subcategories like window curtain panels. Look at the units sold in this market. For instance, last September, 2.6 million units were sold within this category. If your product is more niche and represents about 5% of the overall market, adjust your forecast accordingly. It’s crucial to understand the numbers for your category to build a reliable forecast.

Accurately forecasting inventory starts with a deep understanding of your market. The Product Opportunity Explorer provides insights into the demand within your chosen category. For instance, examining the data for home and kitchen curtains, you might find that 2.6 million units were sold last September. If your product is expected to capture a niche segment of this market, perhaps around 5%, you need to adjust your forecast to reflect this. Understanding these figures allows you to set realistic expectations and avoid overstocking or understocking.

Click-Through Rate (CTR): High CTR is often a result of relevant keywords. Broad keywords may have higher CPC but lower CTR. Test and refine these keywords based on performance. If a broad keyword doesn't perform well, consider removing it or adjusting the bid to ensure you're not overspending on low-converting terms.

Budget Management

Reasonable Budgets: Ensure budgets match the CPC. For higher CPC keywords, allocate sufficient budgets to gather data over time. Segment high CPC keywords into single keyword campaigns for better control. This way, you can monitor performance closely and adjust bids or budgets as needed.

Utilizing Negatives: Regularly add negative exact and phrase match keywords to reduce wasted spend. Automate this process using tools like Scale Insights, which offers a 10% lifetime discount and a 30-day free trial. Negatives help refine your targeting and ensure your ads are shown to the most relevant audience.

Step 2: Analyze Market Trends and Click-Through Rates

Next, analyze the click-through rates (CTR) and sales trends for your category. September may have higher interest and clicks than other months. This data can be viewed directly in Seller Central. Check for year-on-year improvements in units sold and identify any seasonal trends. Map out the months with the highest sales volumes and most popular keywords. Understanding the cost per click (CPC) for these keywords is essential because it affects your PPC budget. Higher search volumes usually mean higher CPCs, so budget accordingly.

Market trends can vary significantly throughout the year. For instance, September might show a surge in clicks and interest, which is essential to factor into your inventory planning. By examining year-on-year improvements in units sold, you can spot growth trends and adjust your forecasts. Mapping out the months with the highest sales volumes helps you anticipate periods of increased demand. Also, understanding the cost per click for popular keywords is crucial. If search volumes are high, the CPC is likely to be higher, which needs to be factored into your PPC budget planning.

Step 3: Study Competitor Performance

Look at what top competitors are doing in terms of search volume. While you might rely on third-party tools like Jungle Scout for some data, Amazon’s own data is more reliable. Check competitors’ listings to see how many units they’re selling. Products with 3-500 reviews are good benchmarks, as these are achievable targets for new launches. Analyzing sales spikes around holidays or specific seasons can help you predict demand and avoid stockouts.

Studying your competitors provides a benchmark for your own performance. While third-party tools like Jungle Scout offer valuable insights, Amazon’s own data is often more accurate. By examining competitors’ listings, you can estimate how many units they are selling. Products with 300-500 reviews are particularly useful benchmarks as they represent attainable targets for new products. Analyzing sales patterns during holidays or seasonal spikes also offers a clearer picture of demand fluctuations, helping you to avoid stockouts and better manage your inventory levels.

Step 4: Use Keyword Tools for Search Volume Insights

Tools like Cerebro can provide keyword search volumes and help you identify terms relevant to your product. For example, “desk lamp” might have 161,000 searches. Examine broad terms and their search volumes to gauge market interest. Make sure to align your bidding strategy with the CPC data you collect. A reasonable CPC allows you to compete effectively without overspending on ads.

Keyword tools are indispensable for understanding the demand for specific search terms related to your product. For instance, Cerebro can show that “desk lamp” has 161,000 searches. This data helps you gauge market interest and refine your product's positioning. By examining both broad and specific terms, you can determine which keywords to target. Aligning your bidding strategy with CPC data ensures that you can compete effectively without blowing your budget. This careful planning is critical for maximizing the return on your PPC investments.

Step 5: Incorporate Forecasting Tools for Inventory Management

To manage restocking and avoid running out of stock, we recommend using platforms like Scale Insights. This tool is not only for PPC management but also helps forecast inventory needs for existing products. By inputting production times, freight times, and other supply chain details, Scale Insights can suggest when to reorder. Although it’s impossible to forecast perfectly due to sales spikes and supply chain disruptions, this tool can help you get as close as possible.

Inventory management is a complex task that requires precise forecasting to avoid stockouts and overstock situations. Scale Insights is a powerful tool that helps streamline this process. By inputting key details such as production times and freight times, you can get accurate reorder suggestions. Although perfect forecasting is unattainable due to variables like sales spikes and supply chain disruptions, Scale Insights can bring you very close. This tool not only aids in managing your PPC but also provides comprehensive inventory management capabilities.

Conclusion

Proper forecasting is a blend of using the right tools, analyzing market data, and understanding your competition. With the methods outlined above, you can create a more accurate forecast for your new product launches. For ongoing inventory management, Scale Insights can be a game-changer, and we’re offering a 30-day free trial with a lifetime 10% discount using our coupon code below.

Accurate forecasting is a multi-faceted process that involves leveraging the right tools, analyzing market data, and staying informed about your competitors. By implementing these methods, you can develop a robust forecast for your new product launches. Tools like Scale Insights offer invaluable assistance in maintaining an optimal inventory level, helping you avoid costly stockouts and excess inventory. We’re offering a 30-day free trial with a lifetime 10% discount using our coupon code, making it an excellent opportunity to enhance your inventory management practices.

We hope you found this guide helpful. Accurate forecasting can significantly improve your business efficiency and prevent costly stockouts. For more help with your Amazon PPC, visit us at kickstartppc.com and schedule an audit. Until next time, take care and happy selling!

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