How reliable are free Amazon Sales Estimators (including best practices)?
Estimating the potential of a product idea can sometimes be quite challenging. A crucial aspect that should not be missing in any market analysis is the sales figures of comparable products. This not only allows for an assessment of the general sales potential, but sellers can also make statements regarding the optimal price based on this data. An Amazon Sales Estimator can therefore be a very helpful tool.
There is no doubt that these are always just estimates. Real and complete data on individual products is logically only available from Amazon itself. A Sales Estimator does not carry its name without reason. Below, we would like to clarify how reliable the assessment of such a tool is and provide recommendations for specific tools.
What is an Amazon Sales Estimator?
An Amazon Sales Estimator is software that marketplace sellers use to estimate the approximate monthly sales of a product on Amazon. Such tools typically use the Best Seller Rank (BSR) of a product as the main data source. The BSR indicates how well a product is selling in its category. The lower the value, the better the product sells.
Since the BSR is publicly accessible on Amazon, it can be easily utilized by external providers as well. Using algorithms that analyze large amounts of data regarding sales patterns, category data, and historical data, more or less realistic sales potentials can then be determined.
However, these are always just estimates and never historically accurate figures, which are additionally influenced by external factors such as advertising campaigns or seasonality. Just because a product has sold well in the past does not mean it will do so in the future (one should remember in this context the briefly popular Fidget Spinners, whose demand then plummeted, or the currently hyped Dubai chocolate, which will likely be heavily discounted in a few weeks).
What is a Sales Estimator used for by Amazon sellers?
Basically, there are three main areas of application:
How accurate are Amazon Sales Estimators?
As already mentioned, the results are estimates. Therefore, the accuracy varies greatly and is influenced by various factors. Knowing these is essential for correctly interpreting the results.
An Amazon Sales Estimator can thus help to determine approximate sales figures, identify trends, and validate the profitability of product ideas. The market volume can also be roughly estimated. At the same time, such tools can never replace a thorough market analysis, as they are merely estimates without real-time data. Unpredictable factors such as advertising, sudden market developments, or price changes cannot be reliably predicted.
Conventional Amazon Sales Estimators have an accuracy of between 70 and 90%, depending on the category and the product. This accuracy is usually sufficient to make informed decisions, but it is not a substitute for a deeper market analysis.
What should online retailers use an Amazon Sales Estimator for?
In certain scenarios, an Amazon Sales Calculator can be a useful addition. Below, we provide you with some examples.
Product research and niche analysis
You want to find new products that have the potential to generate high sales, or you already have a specific product idea in mind whose potential you want to assess before undertaking the work of a detailed market analysis.
Competitive analysis
You want to find out how many sales your competitors are making or how strong the competition is in a particular niche or product category. Or you want to analyze current market opportunities by identifying niches with high demand and comparatively low competition.
Inventory planning
You want to better align your purchases with current demand and thereby avoid out-of-stock situations. Or you want to reduce any excess inventory and avoid long-term storage fees.
Product launch
You want to develop your pricing strategy for launching a product and need data on the prices and sales of your competitors.
Top 5 Best Practices: Do this, but avoid that
An Amazon Sales Estimator can be a valuable tool for your sales strategy – provided you know how to use and interpret the estimates correctly. Here, we provide you with some practical tips on how to get the most out of a Sales Estimator and avoid common mistakes.
Cardinal mistake: Estimating external sales figures vs. knowing your own sales figures
A mistake we encounter repeatedly in practice is that while online retailers meticulously research the sales figures of their competitors, they rely on the incomplete data in Seller Central for their own performance, which does not capture all relevant items for a comprehensive analysis of business finances. The result is inaccurate reports that do not reflect reality, leading to poor decisions made without a data basis.
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Conclusion
Amazon Sales Estimators are practical tools that help sellers assess the potential of products, identify market opportunities, and make strategic decisions. Free versions of such tools provide an easy entry point but should be used with caution, as they are limited in accuracy. The estimates are typically based on publicly available data such as the Best Seller Rank (BSR) and often inadequately account for external influences like seasonality, advertising, or short-term trends.
Despite these limitations, an Amazon Sales Estimator can be valuable as a basis for strategic decisions when the results are used thoughtfully. Complemented by additional data sources and a critical approach, these tools can help you successfully implement both new product ideas and long-term sales strategies.
Frequently Asked Questions
Such tools use the Best Seller Rank (BSR) to estimate the approximate monthly sales of a product in a specific category based on historical data and algorithms.
The accuracy varies depending on the tool and category, as external factors such as seasonality and advertising campaigns are usually not taken into account. These are estimates, not exact figures.
Only Amazon knows the exact data for a product or product category. For specific data, sellers can use free tools, browser extensions, and apps. The estimation is based on the BSR and other historical data such as price trends.
To find profitable products, analyze the competition, and optimize inventory planning.
There is no good answer to this, as it is difficult to externally verify how reliable the results are. Personal preferences and requirements also play a role.
Image credits in the order of the images: © Johannes – stock.adobe.com / © Johannes – stock.adobe.com
