Choosing products to sell
Many people make the same mistake when they first start trying to sell online. They eagerly jump in trying to sell the newest and coolest gadgets. Their online store is packed full of the latest cell phones and electronics. They get plenty of Oohs and Aah’s from their friends. But their bottom line is in the dumps. No one is buying. The problem is that you see these same products all over the internet. Everyone is trying to sell the same stuff so no one really gets any sales. The market is over saturated.
The #1 question asked by online retailers is “What should I sell online?“ The simple answer is “sell products that people use every day, not ones they see every time they browse the internet.”
The reason your selling stuff online is to make money. Lots of people know what they want to sell online, but have no idea if they can actually make money. Market research is the only way to know. Market research is the process of gathering information about a product to determine if you can make a profit selling it. You need to know things like the amount of demand for the product, how much competition is there, how much interest is there in the product, what keywords are people using to search for the product, and how much can you sell it for. After you’ve gathered all this data you need to analyze it to figure out if you can make money with this product. The analysis can also help you determine where the product fits in your product strategy (up seller, cross seller, loss leader, etc…). Repeat the research and analysis for each product you want to sell.
It is important to record everything you find. You will be gathering a lot of information. Its just too much for anyone to remember every detail. So record everything to make the job of analyzing it much simpler. When your done with your analysis keep a hold of all the data you gather. You will want to use it 6 months or a year from now to compare against the new data you’ve gather for the product to see how much things have changed.
Demand is the number of shoppers searching for a product. Shoppers enter various terms into the search engines, like Google or Yahoo, trying to find the product they want. They may try many different search terms until they find just what they are looking for. We need to find out how people are using the search engines to find the product we want to sell. There are a number of web sites available that track the number of searches made and the search terms used.
Competition is how many other vendors are selling the product we want to sell. You want to find out how many vendors are selling the exact product, how many are selling similar product, how many are selling exact and similar products, what similar products are they selling, which are the most popular vendors, how are the popular vendors presenting the product, and which vendors feature the product. You need to get online and going into the competitors stores. Act like someone shopping for the product. Use the Google, Yahoo, and other search engines and enter the terms you saved when determining the demand for the product to find more vendor. Use any other search term you can think of. Investigate all the vendors you find.
Price is what you need to sell the product for to make a profit versus what your competitors are selling it for. Determine the lowest price you could sell the product for and still make your desired profit. How does this price compare to the competitor prices. If its a lot higher then that may not be a good product to sell. If its a lot lower then you may have a winner. You can raise the price to be more comparable to competitor prices and earn more profit from each sale.
Keywords are the search terms shoppers use to find the product in the search engines. All those search terms you found while determining the demand for the product are your keywords for the product. Use these keywords on the web store pages for the the product. Google will find these keywords on your product page and include the page in the search results for those keywords. Finding and using the right keywords for a product is incredibly powerful in bringing search engine traffic to your store.
Advertising is how you let online shoppers know about your product. If you are going to sell online you will need to advertise your product some how. Pay-per-click (PPC) advertising is the most widely used methods. Go to the main PPC search engines (Google, Yahoo, Overture, and FindWhat) and look at the competitor’s ads. Use all the keywords you’ve found so far looking for how many are advertising with those keywords and what do the ads look like. If there are a lot of advertisements then there is a lot of competition. Look at the competitor’s ads. Use ideas from the ones you like the most to come up with your own ad.
Analysis is where all the above data is brought together and considered as a whole. You have to look at all of the data collected for Demand, Competition, Pricing, and Advertising, and make a decision on how they all balance out. There is no simple method or process for doing this analysis. Here are a few things to consider while analyzing your data:
- Not enough demand vs competition means there are not enough buyers.
- Too much competition vs demand means not enough profits for everyone.
- Too much advertising drives up the price of PPC ads.
- Competitor prices too low means you will make little to no profit selling the product.
- Not enough demand vs advertising could mean a declining market.
Market research can be a long tedious process. Take your time when doing market research. Your business will have a much better chance of success when you do it right.
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One Response to “Choosing products to sell”
Good writing. Keep up the good work. I just added your RSS feed my Google News Reader..
Matt Hanson