10 July 2017
Sometimes the desire to start an e-commerce business comes following an idea for a product to sell. Other times you know you want to start a business but you don’t know what to sell. If you are in the second category, here are several points to consider to help you find the right product for you.
If you decide to sell a broad product category, such as electronics or women’s clothing, you will find yourself with many competitors. It can be hard to compete against the big ones if you don’t have as vast a product line or the best prices. You may still be successful with an excellent marketing campaign or excellent customer service but it may be more work than addressing a niche. Of course, the upside of choosing a general product category is your potential market will be bigger.
If you would prefer to focus on a niche, how can you decide which one?
Many successful businesses begin with an entrepreneur or inventor trying to solve a problem people have. For example, one man realised it was very difficult to find shoes when you have big feet and started an online store with shoes in large sizes and this business has been successful for years.
Similarly one Australian man realised that there are more and more women wearing bras with cup sizes from D-K but it is difficult to find many bras of these sizes in Australian stores. He therefore decided to open an online plus-size bra retailer, Curvy.
Let’s say your passion is weightlifting and you would like to start a business around this. Now you could try to sell all the products related to this but you would be in competition with many other sports stores online, making it difficult to compete on range and price.
Instead you can start digging deeper to find a niche. Maybe you particularly like deadlifting. Is there anything you need for that? Maybe you read women complaining about bruising their shins while deadlifting and asking where to buy long socks with cute designs for protection. So you decide to sell a selection of fun, long socks for deadlifting, as well as a few other products, such as straps and shoes. Now you have a niche store for women who like deadlifting. You could enlarge it slightly by also selling squat sponges to protect the neck during squats or hips during hip thrusts.
You can use this technique with any of your passions to arrive at a niche.
Selling products based on your passion can be rewarding as you can share your knowledge and help others enjoy something you yourself do. It may also be easier to give quality service if you know all your products well from personal experience and interest.
Of course it’s not necessary, many people are successful selling products for which they feel no particular passion. There are many practical products which will sell well and make a difference in lives without being particularly fun.
If you do choose to sell a fragile item you will have to find a way to package it well so it doesn’t break on the way to the customer. This could mean investing in various types of bubble wrap, stretch film, packing peanuts and other such products. Products breaking will not only be expensive as you have to refund or replace them but can also pose a danger to the client or the delivery person.
Unfortunately packages are sometimes dropped and not every delivery person will be as careful as you’d like. Ideally your package should be able to survive a drop from several feet without damaging the contents.
You can sell big, heavy products but the shipping will be more expensive. Customers are often reluctant to pay anything for shipping, in general, so charging a higher rate to transport a large package could lose customers. Sticking to small, light packages will keep costs down.
So you have realised that nobody sells space suit costumes for cats. Great, you’re thinking, you’ll be the only one on the market. But hold on – how many people are likely to buy an astronaut costume for their kitties? (A better question might be how many kitties will agree to wear one?)
Having a niche is great but it should not be so specific that it limits your customer base and potential profits.
While you can certainly have success selling items which are commonly available, it can be easier to sell a product which is harder to find, or specifically hard to find locally. There may be some products you take for granted which people in other locales really have to search for.
Here in France in November, for example, American expats are often in a fluster asking each other where one can find turkeys and cranberry sauce in Paris. Fortunately there are a few specialty stores, both brick-and-mortar and online, who cater to this group.
Similarly you could find a product which you can easily source but which is in demand and hard to find in another place.
It’s easier to keep an existing customer than to acquire a new one so if you can sell products which people buy regularly your job will be easier. Let’s say you sell vacuum cleaners, your customers will probably only be buying every few years. You might, however, also sell the bags and other accessories, in which case customers can keep buying from you regularly. If you have a number of products to attract repeat customers it will matter less if they are products which are replaced frequently.
If you buy a new dress or mobile phone today it will likely look different from those you bought five years ago. If you buy a spoon or a notebook, however, it will probably look exactly the same as those you used as a child. Some products change every season or get improved frequently while others remain consistent over the years.
For this reason some prefer to sell products which remain constant over the years. This way you can buy in bulk knowing you won’t find yourself with out of date stock when updates happen.
If you choose to sell a product which is dominated by one brand or particular model you will be in direct competition with everyone else who sells it. Let’s imagine you want to sell iPhones, why will people buy specifically from you? It would be hard to have the best price or service.
Let’s compare that to another product. Can you name a brand or model of bicycle baskets? Probably not. In this case there is not only one brand or type which dominates the market. It could therefore be easier to sell a range of bike baskets than compete with every other iPhone seller.
Google Keyword Planner is designed to be used to advertise with AdWords. It will show you how much people are searching for certain terms and suggest related keywords. You can also find out how much it would cost to advertise with certain words. You can therefore find out both if an item is popular by the search volume and if there is a lot of competition by looking at the advertising cost.
This is also helpful if you do plan to advertise on AdWords as you can get an idea of your potential advertising costs.
With Google Trends you can also look up the popularity of various search terms and see how this has evolved over a period. This can help you find products which are increasing in popularity. You can also compare across countries to get an idea of your best potential markets.
On Amazon you can look at the best sellers in various categories. There are not only the general categories but also quite specific ones.
In addition to finding out the most popular products, you can also read many customer reviews to find out what customers like and don’t like about various items. This can help you choose which exact products to sell. It can also give you ideas for a product to improve if you want to develop your own product line.
Once you have an idea for a product line you then need to check out your competition. Do your potential competitors have great sites? Do they rank highly in Google searches? Do they have a lot of inbound links?
If you do find your potential competition is doing very well in ranking for certain keywords this can guide you to instead optimise your site for slightly different keywords or a different product line. If your competitor’s site is difficult to use or slow, you can make sure yours is more customer-friendly. If your potential competitors are killing it in every way, you might instead decide to get a bit more granular with your niche or to choose another category
If you have come up with the product you should next find a supplier and order it to be sure it meets your expectations. This is especially important if you are planning to do drop shipping.
Your products need to be described as accurately as possible with pictures which fairly represent the product. This will avoid unnecessary returns, poor reviews and disappointed customers. Likewise your promised delivery times should be respected so if they are being shipped from the manufacturer or wholesaler, be sure that they will arrive in a timely manner.
With some research you should be able to decide on a product line which suits your needs. Whether you go with a product linked to your interests or a utilitarian product you can find your success.
