They all provide excellent examples of differentiation.
What is differentiation?
When you produce a product that is different from what already exists on the market.
When you differentiate a product, you produce either a novel product or an improved version of an existing product. As long as you are adding value to a product, then you are giving shoppers a reason to choose your product whether you have reviews or not.
In other words, differentiation is when you make a product that is better than your competition. At Just One Dime, we call it "betterentiation."
How do you know what to differentiate in a product?
Start by going to Amazon.com. Observe:
- What customers favor and buy the most
- Your competition's customer feedback
The most helpful feedback tends to be in two, three, and four star reviews. Five star reviews tend to not say anything critical of the product. One star reviews tend to be less reliable and come from buyers having a bad day. A helpful review may say, "I like this product but I wish this edge wasn't sharp..." Whatever proceeds that "but" is an opportunity to improve the product.
Once we know what can be improved in a product, we can apply a variety of differentiation strategies to the undifferentiated product.
Today, I will use 3 real-to-life product examples to show you 3 differentiation strategies that you can use for your next Amazon product.
1) Solve an unsolved problem
Example: Selfie Ring Light
This device is meant to help people record and take images of themselves by providing good lighting. It provides mounting for your phone or camera as well.
Some people also like the ring effect it makes around their iris.
Differentiation Step 1: Observe what customers favor.
When we search "selfie ring light" on Amazon, the top product results look the same. They all have this flimsy aluminum stand and tripod legs.
When you see similarity in your market, then there's opportunity for you to break that mold and stand out.
We find (via sales) that customers favor ring lights that look bigger. This tells us that we want to produce a large ring light.
Differentiation Step 2: Analyze Customer Reviews.
The biggest review gripes were:
- Ring light is too small. Buyers complained that the light was much smaller than expected and didn't provide enough light for their intended effect.
- Flimsy base. These tripods move easily—which is a problem when you're recording video. And you don't want the camera/phone falling with the tripod to the ground.
- No desk mounting option. We could work our base to be desk mountable.
- Inadequate phone/camera mounting. The existing mounting systems didn't securely hold cameras and phones in place. Many of them couldn't mount professional cameras at all.
Differentiation Solution: Solve a problem by making an improved version of an existing item.
For today's purposes, we will use pre-made Alibaba products as our examples of differentiated products. Keep in mind that you are better protecting the long-term health of your business when you design a novel, more differentiated because then it is harder for other sellers to copy you.
We found a ring light on Alibaba that already addresses the customers' biggest gripes.
This model:
- Has a heavy, sturdy base
- Is desk mountable
- Has a 12 inch ring light
- Can mount phones and professional cameras
- Looks significantly different from most selfie ring lights
- Is not on the Amazon platform yet
Once we affix a brand label and feature superior packaging, then this product can stand out and make tons of sales on Amazon.
2) Offer a superior, new-to-Amazon version
Example: Pocket Microscope
It's a portable device that allows customers to magnify to a microscopic level.
Differentiation Step 1: Observe what customers favor.
When we search "pocket microscope" on Amazon, there are two main versions of this product:
1) A plug into your phone-version. It fastens to a base that rests on a desk. You connect a cable from your phone that allows you to see the magnified image via an app.
2) A hand held version. This type of pocket microscope comes with a clip where you can put your phone's camera up against the viewfinder.
All of the best selling pocket microscopes look like one model or the other.
Some microscopes are priced at more than $40, which tells us that there may be a path to producing premium priced products. 😉
Differentiation Step 2: Analyze Customer Reviews.
The biggest review gripes were:
- It is difficult to keep steady and retain focus.
- The phone clip does not support the phone (specific to the handheld version).
Differentiation Solution: Offer a superior, new-to Amazon product.
We will go for a quality premium product since we know the market accepts high prices.
We found a new-to-Amazon version on Alibaba. This product:
- Provides a novel digital display that eliminates the need for using your phone.
- It looks visually different from both models out there right now. This will generate interest and clicks on Amazon.
- It can be handheld but also has an attachable base.
- This is a higher quality microscope. It renders a better image.
3) Improve via bundling
Example: Infrared Thermometer
Infrared thermometers give contactless body temperature readings. These products boomed in popularity with the COVID-19 pandemic.
Differentiation Step 1: Observe what customers favor.
When we search "infrared thermometer," we see extremely similar product images. However, minimalist designs (bottom right) do better than the rest.
Because even the most basic versions charge more than $30, there is a good chance that we can go premium with this product as well.
Differentiation Step 2: Analyze customer reviews.
The biggest review gripes were:
- Inaccurate measurements. Customers took their temperature, waited 10 minutes and then took their temperature again to dramatically different results. Buyers asked, "How can I trust this?"
- No storage solution. The instructions said that the infrared thermometer should be stored safely but provided no storage solution such as a carry case. Not only would this alteration be easy, but a main product image that includes the case would help the listing stand out on Amazon results page.
Differentiation Solution: Offer a unique product bundle that customers desire.
Amazon "Frequently bought together" sections on Amazon listings are a great way to find bundle ideas.
We found a product with a higher certification for accuracy that is both minimalist and is not on Amazon yet.
We can easily design an EVA case for this product.
Get the full how-to on brainstorming product ideas, designing a differentiated product, manufacturing that product, and more at JOD.com/freeodm. Our Amazon FBA Mastery membership will take you in-depth through everything you need to know and more about starting and running a successful Amazon store.
Which differentiation strategy will you follow?
- Create a better version of an existing product
- Create a new-to-Amazon version of a product
- Product bundling
Let us know in the comments!
To watch a step-by-step video version of this blog, click below.
