If you want to grow your eCommerce business, the best way to do it is by understanding category relativity. The concept of category relativity refers to the fact that based on historic sales data, certain categories sell better on certain channels than others.
When you understand category relativity, you can answer:
- Based on what categories your items are in, which channels should you expand to next?
- Based on which channels you want to sell on, which category should you invest in?
When you know category relativity, you can grow strategically and avoid wasting time on products and channels that don’t work.
How to determine category relativity
The short answer is to talk to your Deliverr account manager. The Deliverr team is armed with internal data to help all of our sellers expand and improve their product lines and channels.
For example, we’ve monitored category growth across different sales channels, and ranked them based on velocity. When we see a category hit #1 on our scale, it means that category is growing quickly for that marketplace and it’s a good time to;
- If you are already selling that category on a different channel, expand to a new channel, or;
- If you are selling on that channel with an adjacent category, expand your product line.
What do decisions based on category relativity look like?
Below, I’ve taken the top categories on Amazon and ranked them based on velocity. Across the row, you can see the same velocity ranking for other marketplaces.
Note: We have different amounts of data for each marketplace, so for example a 10 velocity ranking for Walmart is higher than a 10 for other marketplaces.
Looking at the information above, here are some scenarios and decisions you can make based on the data.
- If you are selling personal care items on Amazon, your next channels should be Shopify and eBay.
- If you’re selling health items, your next channel should be Walmart.
- If you want to expand to eBay as a new channel, start with household essentials or personal care.
- If you want to start selling on Wish, start with patio and garden items.
So whether you want to expand to a new channel, or expand to new products, the data is there for you to utilize.
We’ve also looked at subcategories across marketplaces, and done the same spec-out to see which sub-categories are doing well.
Here’s the decisions you could make based on the data above:
- If you sell oral care on Amazon, you should expand to eBay next.
- If you sell skin care on Amazon, you should expand to Shopify next.
- If you sell vitamins and supplements, you should expand to Walmart next.
- If you want to expand to Wish, expand your product line to bath and kitchen and dining items.
What does this mean for you?
eCommerce is always changing, which means the velocity rankings will change over time.
Category relativity gives us a glimpse into fast paced consumer trends, which are evolving all the time. With that insight comes the opportunity to grow your revenue and make smart business moves, but you need to continuously look at what is working for you weighed against what is working in the market currently.