The 6 Stages of The Amazon Product Life Cycle
All living beings go through a life cycle that begins at birth, progresses through maturity and adulthood, and finally declines to reach the end. Similarly, products also go through stages based on market response. New items generate excitement while old ideas fade out. For example, Kodak film cameras were a rage in the 80s and 90s but are obsolete now.
Understanding this product life cycle is a vital part of successful business planning. Managers and marketing professionals assess the lifecycle to determine when to increase advertising, expand to new markets, reduce prices, or redesign packaging. In this post, I’ll explain the Amazon product life cycle and how you can use it to maximize sales, profitability, and operational efficiency.
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What is the Product Life Cycle?
The product life cycle represents the different stages an object goes through between its launch to market and the end of manufacturing. The demand for new goods is high but declines gradually over time until the item is eventually taken off the shelves. For example, you can see in the image below that cotton deck mops (highlighted) have gone out of style, and only a few are available. Flathead mops are more popular and have more sellers.
Each production line has its own life cycle. The individual stages are never consistent for different items. Some objects are more durable, while others come and go in a flash. You may also find yourself stuck in a particular life cycle stage for a long time.
Savvy business owners use the product life cycle to plan and make decisions. Knowing the market movements, you estimate demand more accurately while making more effective advertising and pricing decisions.
Benefits of Product Life Cycle Management
Product life cycle management (PLM) is the process by which companies oversee their items through the phases of product life cycle. Whether a product is a completely new, groundbreaking item or simply a slight modification of an existing item, you need a process for managing the goods you sell.
PLM involves all facets that go into a successful commodity, such as planning, design, production, distribution, marketing, and even the software required to facilitate the process. When done correctly, PLM increases your products' longevity and profitability. Below are some other ways it can benefit your business.
- Improves quality
- Lowers the cost of development
- Speeds up the time to market
- Boosts the efficiency of marketing efforts
- Improves inventory planning and demand forecasting
- Increases customer loyalty due to an improved experience
The 6 Stages of the Product Life Cycle
The life cycle is typically divided into six product stages. These product cycle stages span from development to the item’s ultimate decline and removal. Below, I break down each of the 6 stages of product life cycle:
The development stage occurs before the product is released for sale. During this phase, all the planning, research, and development needed to successfully bring to market takes place. This typically includes:
- Conducting a survey to learn about your target customers’ interests
- Developing prototypes and testing the product’s effectiveness
- Strategizing the eventual launch and marketing
The introduction stage is where the article first becomes available for sale. During this phase, the focus is on spreading awareness of your new product and getting it in front of potential customers. This can be done through advertising and promotional campaigns or by giving away free samples to members of your audience.
In the introduction phase, monitoring how well customers receive your idea is also important. Adequate research in the development phase provides some confidence in your product’s value, but you won’t know if it has the intended effect until it enters the market. So, during the introduction stage, it is best to gather customer feedback to see if the new item meets expectations.
Sales during the introduction stage are typically low as demand builds and customers learn about the product.
A successful introduction phase leads to the growth stage. The item has penetrated the market during the growth period, and consumers are beginning to view it as a viable option. As a result, demand and sales increase at a notable rate. The growth stage is also when the competition starts to emerge. Other businesses notice your product’s success and begin making plans to replicate the results for themselves.
As a business owner, your focus and actions during the growth stage typically involve:
- Expanding marketing campaigns to reach a larger audience
- Finding faster, more affordable methods of sourcing the product
- Maintaining quality by monitoring buyer feedback and adding new features, add-ons, or services as needed
The maturity stage is when the product’s sales begin to even out after the period of growth. This is when awareness and demand for your item are at their peak. At this point, marketing costs are also at their lowest. Many consumers know about the item, allowing you to save on advertising and promotional campaigns.
In the maturity stage, the market becomes saturated as more competitors enter. It is common for sellers to counteract this increased competition by employing the following:
- Adding new features and options.
- Adjusting your pricing strategies to out-price the competition
- Running marketing campaigns that differentiate your product from your competitors
Unfortunately, most products don’t last in the marketplace forever. Unless you invent the next Coke, you shouldn’t expect your item to indefinitely maintain its market share. At some point, the maturity phase ends, and the product goes through the decline stage. The decline stage can also be triggered by other factors, such as a new trend or emerging innovation that drains your market's interest altogether.
During this stage, sales decrease as competition becomes increasingly hard to deal with.
As your product declines, your focus should be on maximizing the value of any investment you make by clearing any remaining inventory at a profitable price. At this time, you should begin the cycle anew by starting the development of new potential commodities.
The removal stage is the final stage of the Amazon product life cycle. It occurs when a product is no longer viable and is removed from the market. This happens for various reasons, such as a decline in demand, the introduction of new and superior products, or changes in consumer preferences. In the removal stage, sellers typically stop carrying the product and no longer list it for sale on Amazon.
In some cases, a product that has reached the removal stage may be able to make a comeback if it can be revised or updated to meet the needs and preferences of consumers. For example, a product that was popular several years ago but has since fallen out of favor may be able to regain its popularity if it is updated with new features or improved in some way. However, this is not always possible and many products are ultimately removed from the market permanently.
It’s essential for sellers to regularly review their product offerings and identify products that approach the removal stage. You must avoid investing resources in products that are no longer viable and focus instead on products with more potential for success.
Examples of the Product Life Cycle
Now that you know the different product life cycle changes let’s look at some real-life examples of current Amazon products at each stage of the life cycle. The data has been taken from Amazon using the Traffic Insights for Amazon tool. The free tool allows you to scout any item currently listed on Amazon.
Product Life Cycle Example: Introduction Stage
This cropped cardigan was first listed on Amazon in August 2022. Today, it is still in its introduction stage as its average daily sales of 6 have barely increased since the product’s launch.
Product Life Cycle Example: Growth Stage
This shower curtain liner was first listed on Amazon in December 2020. After an 8-month introduction period, the curtain gained momentum, averaging over 1,000 daily sales. Since then, it has remained in a steady state of growth. Sales have grown by 150% year-over-year, and they continue to rise. The product’s best sales month was the most recent, showing that the item is still trending upward.
Product Life Cycle Example: Maturity Stage
This fish oil supplement arrived on Amazon way back in 2003. After a steady period of growth, the item became a prominent player in the market. Today, the item is in a prolonged maturity stage. It averages around 3,000 daily sales, which has not changed since January 2021.
Product Life Cycle Example: Decline Stage
This unfortunate Samsung Galaxy S21 Case is now in the decline stage. First launched in February 2021, the product had a short introduction before seeing steady growth for 6 months and reaching maturity. It remained at around 200 sales a day for around eight months before the release of the new Galaxy S22. After that, daily sales gradually declined to the 40 it receives today.
Evergreen vs. Fad Products - Which Should You Choose?
While product life cycle stages are consistent across markets, not every item goes through the cycle at the same rate. Some items last a long time before reaching the decline stage. These are known as evergreen products, given their continuous demand. For example, a simple solid-color t-shirt is unlikely to go out of demand soon.
Others lose their demand faster, only enjoying a short period in the growth and maturity stages. These items are known as fad-products. A good example is the fidget spinner which saw massive demand during part of 2017 before quickly plummeting back to earth.
If you’re looking for an idea to build a long-term business, you’ll benefit more from selling evergreen products. Successful evergreen items allow you to enjoy consistent profits over time without constantly investing time and effort into finding new products to sell.
Fads do not have such long-term viability. However, given their popularity, they are not completely devoid of profit potential. If you catch a fad as it’s taking off and have the resources to bring it to market, it can prove an effective way to drive extra revenue for your business.
Inventory Management Tactics Based on Product Life Cycle
Sound inventory management is an often overlooked but vital part of ecommerce success. One of the biggest advantages of understanding the product life cycle is the ability to effectively plan your inventory management. Knowing where your item is in the typical life cycle, you can ensure that you always have enough inventory to meet demand while not wasting capital on overstock.
Below are some tips for managing inventory at different phases of the product life cycle:
The introduction stage is the most tricky when it comes to inventory management. No matter how much research you perform, you can never truly know the demand for a new idea. That said, there are ways to estimate sales during this stage of your product’s life.
The best way to forecast demand at this stage is to analyze similar items on Amazon. Even if your product is new, it likely shares some similarities with existing items. As such, you can track those items’ post-launch sales to get an idea of what to expect should your idea catch on. Product research for Amazon is a free tool that takes data from the platform and predicts the number of monthly sales with accuracy.
As growth products have high and increasing demand, this is the time when you want to invest in larger inventory volumes. There is nothing worse than running out of stock and missing sales. The product loses momentum along with its SEO rankings and Buy Box wins.
So, it is often best to ensure you have extra cash on hand to handle any spikes in sales that may arise. Additionally, If you’re open to financing, this is an ideal time and effective method of accelerating your growth.
Inventory management during the maturity phase should focus on meeting the steady demand that the product has established. Ideally, this is done to minimize storage and fulfillment costs, so you maintain your margins. That said, you don’t want to have too much inventory on hand. In the maturity stage, you don’t know when the decline will come, and you want to avoid having capital tied up in costly overstocks. This is another area where Product Research tool can help. By looking at other items, you better understand how long to expect your product to remain at maturity.
Decline and Removal Phase
During the decline and removal phase, you want to reduce inventory levels to not be sitting on unsold goods at a time when your capital should be directed elsewhere. You phase out end-of-life products by placing smaller purchase orders or producing smaller batches. If you have too much stock, you adjust your promotional and pricing strategies to ensure you move through the inventory.
Marketing Strategies for Different Life Cycle Stages
Your marketing strategies look different at each stage of the product lifecycle. Similarly, your pricing also varies as the life cycle yields different average selling prices for different phases. Below, we’ll examine some of the common marketing strategies for each product stage:
During the development phase, you may not have anything to sell, but you can still start generating interest in the new item. If you have an existing audience, you can tease the upcoming item through an email newsletter or landing page on your ecommerce site. When the product launches, potential buyers will already be familiar with it and much more likely to try it. The below image shows a teaser campaign for Green Disk—a bike chain lubrication product not yet launched at the time of writing this blog
Once your product launches, you can begin promoting it for real. At this point, your marketing efforts should focus on getting your new product in front of your audience and showing them how it solves their needs. Amazon Ads are a highly effective way to do this early in the lifecycle.
In the introduction stage, your pricing and promotional strategies directly impact how fast you can penetrate the market. If you want faster penetration, you should sell the product at a low price and/or with a sizable discount. If you are content with slower penetration, you can offer it with a minimal or non-existent discount.
In either case, it is best to keep the price on the low end since the product is a new entrant— plus the fact that low prices are the main driver behind Amazon purchases for any item, regardless of age.
Marketing campaigns focus on further increasing the product’s rising sales during the growth stage. You have to shift your focus from getting customers’ awareness and convincing them of the item’s value to further reinforcing your brand identity. At this point, you want to keep prices as high as reasonably possible to maximize profits during the growth cycle.
Good marketing in the maturity stage helps prolong your item’s life. At this point, the market is saturated, so your promotional efforts must focus on differentiating yourself from the competition. Reinforcing your brand value and any distinguishing features helps in this regard. Another tactic is to leverage your existing customer base by gathering testimonials and reviews. New competitors won’t have this luxury, and positive social proof is a powerful tool for standing out from other options.
Decline and Removal Stage
In the decline and removal stages, it is common to reduce marketing expenditures. However, if you want to try and extend the product’s life, you can reduce prices and roll out new promotional strategies. If you’re REALLY determined to keep the product going, you can add new features or wait it out and see if the competition exits the market first.
Understanding the Amazon product life cycle helps you to make better decisions in nearly every aspect of your business. If you know a product is in growth or maturity, you’ll be well equipped to maximize profits during this opportune window. Conversely, if declining, you can direct your attention to other, more favorable ventures. Above all, good product life cycle management helps prolong your time in the market, whereas its absence results in potential profits left on the table.
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Now that you have understood all about product lifecycles, it is time to launch some new ones on Amazon! Read our Amazon product research guide to find new, trending, and evergreen products for your business.