Section 1: Finding products
If it were easy to start a successful eCommerce or dropshipping business, everybody in the world would be billionaires.
We understand those Youtube ads where a talking head tells you they made $100,000 in a month might make eCommerce seem like a piece of cake. While they’re telling the truth about their success, these ads aren’t telling you all that goes into the process. Namely, those dropshipping gurus are experts at product selection and have a defined process that ensures they’re buying and selling at a substantial profit.
As an eCommerce novice, you can’t create that process out of thin air. You need a starting point—which is what we’re offering below, firstly with different places you can find products for your store:
Look in the Mirror
You’re an entrepreneur, so you probably have some pretty great product ideas. It’s always worth investigating something you’ve already thought of before desperately scouring the internet for that one magic product idea.
It’s wise to consider products, niches, and industries in which you and your friends are interested. After that, brainstorm any potential pain points or inconveniences you experience in your own life.
Look to Your Surroundings
The answers you seek may lie in your local community. Meaning, you don’t necessarily need to embark on an epic journey to Middle Earth or – even worse – the dark web to find your product.
You can visit local brick-and-mortar establishments and assess trends. Therein might lie a ground-breaking product idea that you can take into the eCommerce space. Take a few weekend afternoons to study the newest and most exciting retail concepts and products.
Alternatively, if you aren’t into galavanting around town searching for ideas, local newspapers feature innovative products being developed and sold in your community.
Decide if the local trends could sell in the digital sphere. Some products sell better in physical locations than they do in the digital space – and vice versa.
Adhere to the Experts
Online consumer trend publications will steer your business in the right directions.
Within trend publications are experts whose jobs are to be accurate and discerning about the latest trending products. By reading them, you’ll start getting a sense of consumer inclinations – or in layman’s terms, what’s selling and what isn’t. You’ll also be privy to what other entrepreneurs are bringing to the market.
These publications will also bring to light new product categories and industries you otherwise would have never known.
Trend Watching’s team of 30 professionals throughout London, Singapore, Sydney, and Largos report on a smorgasbord of worldwide trends.
Those seeking a more mainstream trend publication will enjoy Trend Hunter – the largest of its kind. With a global network of 137,000 members and 3,000,000 fans, Trend Hunter is brimming with inspirational product ideas that might help get your business off the ground.
Turn to the Top Dogs
Reinventing the wheel is virtually impossible. It always helps to look at what’s worked in the past and working in the present, then use those example as starting-off points.
Once you have an idea of your preferred market or industry, there are multitudes of online tools, such as Topsy and Followerwonk, that’ll aid in discovering influencers in those spheres. Leading eCommerce and dropshipping professionals can teach you a lot. By using their example as a template for success, you’ll be in way less over your head than if you try conjuring up a business model from scratch.
From the Mouths of Critics
The truth lies in product reviews blogs. You can find out the ins and outs of any product, market, or industry based on this valuable content.
Reviews will let you know about failures in products, gaps in the market that you could leverage, and the type of people to whom you’ll be selling.
These blogs will also offer a well-rounded look into the newest trends on the market and can provide another source of inspiration.
Niche review sites are ideal if you’re considering a product that isn’t mainstream. It’s stellar practice to choose a product that is a proven seller but doesn’t have much competition. Niche blogs act as a conduit to finding those products.
Social Curation is Your Key
The following two social curation sites have built-in social signals that can offer an immediate sense of a product’s popularity:
Pinterest contains 100s of thousands of images that contain exciting new products. There are 50 million users and a dedicated ‘popular’ section that shows trending items.
Fancy is equal parts store, magazine, and wish list. It’ll offer you a strong sense of new trends that’ll give you great product ideas.
Reddit is Your Realest Product Source
Other than being the largest social media news aggregator, Reddit is ostensibly the most powerful digital platform. There’s a reason the online powerhouse is known as the front page of the internet.
Within Reddit, there are thousands of subreddits offering a window into virtually any niche topic you can imagine – making them one of the best places to find product ideas.
No matter the industry or product niche, it’ll be on a subreddit. Don’t believe us? Just search, and we guarantee you’ll find a subreddit for the most obscure products you could imagine. Then, you’ll know if there could be a viable interest. Since Reddit is interactive, you can engage directly with your target market to gain further market insights.
Section 2: Evaluating Products
When choosing products, you must evaluate the market as well as the product itself.
First, let’s look at what to consider when assessing the market:
The Size of Your Playing Field
You must initially hypothesize the market size for your product. Start by using common sense. Running shoes for males between 18-25 are going to have a large market with high demand. Whereas, a tracksuit catered to 40-50-year-old plumbers with an active lifestyle is too much of a niche for your business to make waves.
The Stiffness of Competition
Are you selling a product with no competition? Well, that’s likely due to the product not being attractive to consumers.
Conversely, if the market is too saturated, despite the product probably being a great seller, the competition will make it difficult to get a strong foothold in the market. In this instance, you must find a way to set your product apart with creative branding to find any success.
The safest strategy is choosing a product that has a few successful competitors and is on the rise. Though, playing it safe doesn’t guarantee success.
The Shelf-Life for Selling
Under any circumstances, avoid getting caught up in a product fad. The returns will be very short-term because the demand will die out quicker than you can say ‘why me?’
It’s possible to capitalize on a fad if you buy in and out at precisely the right times – but those are tricky waters to navigate since the lifespan of a fad is highly unpredictable.
A trend is akin to a fad’s more charming and reliable brother. While trends do have a shelf-life, they grow and decline at a far steadier rate than fads and are, thereby, far more lucrative. Trends can develop into long-term stable markets, but much like fads, it’s tough to predict.
When looking to limit ups-and-downs, selling a product that exists in a stable market could work – which has undeniable lasting power and does not fluctuate. This fact does mean, however, that the market is unlikely to grow, so your success will hit a ceiling.
Lastly, there are growing markets that show steady improvement and an ability to cause a long-term market shift.
The Convenience Factor
How easy is it for your consumers to get the product you intend on selling?
Is purchasing a simple matter of heading down to the local strip mall? Then it might not be the best product choice. On the other hand, if a product isn’t easy to find, people are far more likely to search for it online.
The Customer Psyche
Get a good feel for the type of customer that your product appeals to, including knowing their online shopping proclivities.
For instance, selling to teens comes with the obstacle of your target not having a credit card to make an online purchase. Whereas, selling to baby boomers means your target customer will be technology-averse and generally won’t purchase online.
In the case of catering to teenagers, you may benefit from directing your marketing efforts towards their parents, as they’ll make the purchasing decisions. With baby boomers, positioning your product as a gift might work. This way, your advertising would appeal to the children of boomers, who’d purchase your product for their parents.
Now, we’ll take a look at product evaluation:
Markup Can Make You Crazy
You’ll be amazed at the mountainous list of fees that render each sale bereft of profit. As such, sufficiently marking up your product is a must before trying to sell, especially right off the bat. You’ll need to offset those selling fees on top of the other costs associated with getting your business off the ground.
Click here for an example of the fees you might be stuck with when selling a product. It’ll give you a good idea of why some eCommerce businesses mark products up nearly 1,200% to generate a reasonable profit.
The Selling Price Sweet Spot
The sweet spot for eCommerce pricing is estimated to be around $75-$150. You won’t need to move tons of product to generate a return, nor will you be stuck with hefty marketing and operation costs.
When a product is too inexpensive, you’ll have to sell an enormous number of units to turn a profit. Then, there’ll be mix-ups and issues with customer service due to the volume of sales. On the other side of the spectrum, expensive products come with extended sales cycles and pickier customers.
Finding the perfect product for the ideal price is vital in being efficient as a dropshipper, where you’re already wearing many hats and need to streamline operations as much as possible.
Subscribing to Success
Turning customers into subscribers is the best way to get continued business. It also automates the selling process which requires less effort and decreases operating costs.
Even if your product isn’t traditionally subscription-based, try to do what Dollar Shave Club did with razors. It could turn into one of the most profitable decisions you make for your business.
Size Does Count
The size and weight of a product can eat directly into your profit margins. Customers won’t settle for anything less than free shipping, and you may have to eat the costs associated with more substantial items.
Decide whether the market demand can offset the size and weight-related costs of your product.
Durable Products Could Mean Enduring Success
Fragile products will cost more in replacements, exchanges, and protective packaging.
While it’s possible to be effective at shipping fragile products, it requires considerable strategy so that it doesn’t devour your profits.
Is Your Product a One Season Quitter?
Seasonal products won’t necessarily sink your business, but they come with more challenges than products that sell year-round.
Ensuring consistent cash flow with seasonal products requires marketing to different countries at different times of the year. This tactic works very well with winter and summer clothing, as opposed to holiday-based products. Seasons happen differently all over the world, whereas most holidays happen on the same day, regardless of country or continent.
Product Turnover Could Mean Profit Turnover
There are products, like smartphone cases and running shoes, that regularly need new designs to meet the latest demands of the market. Meaning, the older models need to sell before the newer ones hit the market. Otherwise, there’ll be a massive stockpile of outdated product.
Selling items that need to be refreshed and updated continually is risky, so planning and adhering to a turnover schedule is a must.
Can the Product Grow with Your Business?
Okay, so your business is in its infancy. Amid all the initial hiccups, planning to scale your business is a tall task.
Regardless, accounting for scalability from the building-block phase of your business will equip you for long-term success. If you’re selling spices from a local butcher, will the butcher be able to get you enough product to meet an increasingly growing demand? Will you need more employees to handle the increase in sales? Those are just a couple of questions you’ll need to consider when evaluating your ideal product.
Section 3: Validation
Validating your idea requires getting a clear idea of real buyer interest in your product.
Here are some methods you can use to validate your product:
Want Answers? Then Ask the Right Questions.
You can peruse all the Google reviews you want, but there’s nothing quite like first-hand research to paint a truly accurate picture of your product’s selling potential.
There is plenty of survey software, such as Survey Gizmo, that’ll help you create valuable surveys.
To execute a useful survey, you’ll first need to verify your target audience, which entails asking key questions to validate them being the potential consumers most interested in your product. Reaching the right people ensures the survey won’t be superfluous.
From there, determine whether people genuinely like your product idea. Then, even if they are a fan of the concept, figure out if there are aspects they don’t like.
The last element of a useful product validation survey is gauging purchase intent. Seek random survey subjects instead of people you know, as they’ll provide you with more honest answers
Products like Survata help distribute surveys to your target audience.
Let the Crowd Fund Your Dream
Crowdfunding is a real proof-in-the-pudding way to validate your product.
When people are willing to shell out their money for your Indigogo or Kickstarter campaign, it means your product idea is – at the very least – exciting.
Then there’s the benefit of collecting money upfront to fund initial operations costs and inventory. It’s worth noting that for a successful crowdfunding campaign, you’ll need an innovative product that piques your audience’s curiosity. Generic or rebranded products won’t fit the crowdfunding bill.
You will likely require a prototype before making a campaign and setting up crowdfunding is a taxingly comprehensive process that’s a job unto itself.
Landing on Product Validation
All a landing page requires (other than very well-written copy and a strong brand narrative) is your value proposition and an email collection box.
Collecting email helps you gauge if there’s any real interest in your product. Plus, you can establish goodwill relationships with potential customers.
One way to execute a landing page is by using Shopify’s pre-launch page. From there, embed an email sign up form from an email provider like Klaviyo.
Testing the Waters
Setting up a test store is going to provide the most stone-cold proof on whether you have a profitable product. It involves driving traffic to a temporary store and selling your product for a brief time to test consumer interest and demand.
Now that we’ve equipped you with some basics on how to find, evaluate, and validate your products, it’s time to take your eCommerce or dropshipping business plan to the next level!