Product Research: Find GAME-CHANGING Products
Finding the right products is a pivotal step for any retail business owner, eCommerce or brick-and-mortar. So it's only natural that product research needs to be done and it needs to be done right.
How accurately can you predict the profitability of a product?
How can you guess what the next big “it” product will be?
You can't say for sure. But there is a science behind it all – you just have to be willing to put in the work.
We're going to cover some basic and advanced techniques for finding the best products that will get you the highest return on investment possible.
Is Product Research Necessary?
In a word? Yes.
Creating an eCommerce business is hard work. Failing to conduct research on the products you wish to sell won’t do you any favors in the long run.
For new entrepreneurs, the process can be daunting and can leave you thinking, “Just how much do I really need to research these products?”
In short, conducting product research on every item you intend to sell requires some extra TLC, but it is 100% necessary and essential to making sure you start off on the right foot.
A well-researched product list can not only continuously earn you profit on evergreen products, but it can also lead you to undiscovered niches or items that are on the cusp of exploding onto the market as the next big thing.
HOW TO START
YOUR OWN BUSINESS
WITHOUT PRIOR KNOWLEDGE OR EXPERIENCE
6 Guidelines for Effective Product Research
Now that we've covered why you should conduct product research, you’re ready to start doing some actual work.
Keep in mind as you begin to build out your product list, you may start off with a couple of sure-fire products you’re settled on selling.
And although your personal taste in products can be a good starting point, don’t limit your product research efforts to personal preferences or any hunches about the current market.
You could be right or you could be wrong. Just be sure you put in the time to research it and know when to admit that a product may not be a good fit.
1. Decide on your Niche
This is the foundation upon which all of your product research will be built on.
If you don't decide on a product niche, you're just making more work for yourself down the line.
Types of Product Niches
Product niches can be broad or specific.
Broad niches involve selling items under a category.
- Fishing Gear
- Outdoor Apparel
- Pet Supplies
- Lawn & Garden
Chewy is a good example of a broad niche done well.
- You can offer more products
- You're less dependent on the season/world events/consumer interests because you have greater product diversity
- You are able to compile more data on a larger range of products and you may succeed in areas that surprise you
Here's an illustration:
You're shopping for your father for father's day.
He likes fishing, but you don't know what to get him.
You search "fishing gear" on Google.
You see all kinds of results for "fishing gear" and you choose one.
You browse numerous products until you see a fly fishing rod that reminds you that he loves fly fishing.
So you purchase the rod.
Meanwhile, the owner of Scottflyrod.com (who specializes in fly fishing rods) didn't get your sale because you didn't make it to his site.
This is the appeal of a broad niche. You're able to cast a wider net and offer more products.
Specific niches are usually one particular type of item.
- Off-road Bikes
- Billiard Tables
- Running Shoes
- 3-D Printers
- Specific niches make it easier for you to make inroads on the items you want to sell
- You'll understand your niche and your customers better than anyone.
- You'll have an edge with customers that know what they want
- Usually can charge more or offer more premium items that wouldn't sell on broad niche sites
Here's another illustration:
You want buffalo wings for lunch.
You have two restaurants near your work: Buffalo Wild Wings and Applebee's
Applebee's offers wings. But, chances are, you're going to go to Buffalo Wild Wings.
The same principle works with eCommerce. Specific niches can appeal to and target customers that know what they want.
At the end of the day, there isn't a correct answer here. You just need to make sure you're making an informed decision.
Finding Niche Ideas Through Product Research
You can use any online retailer to find ideas for niches.
- Go to Amazon.com/Ebay.com/Walmart.com
- Select a category you're interested in
- Look at the best sellers
- For more specific product niches, select another subcategory after that, and then even another
Below you'll see three very different types of Patio Furniture that are Best Sellers on Amazon.
Each of these products is worth a deeper dive. You can use them as jumping off points to look for other versions of the same or similar product.
Jot down your ideas and keep moving. Try to find at least 30 promising product leads before moving on.
2. Analyze Your Product Leads
It's tempting to gravitate towards products with the highest demand, but dig deeper.
First, make sure you're not buying into a fad.
Below is a chart from Google Trends showing the search volume of "Fidget Spinner."
They started going up in search volume in March of 2017 and fell back down by September of 2017.
There's no doubt that there were some seriously disappointed fad-surfers out there with warehouses full of fidget spinners.
Products with a consistent demand have withstood the test of time and prove to be something the market needs or wants, regardless of trends or other market factors.
As you consider products, keep in mind your “break-even” number, and consider whether the demand is both consistent and high enough to support your business initiatives.
3. Read Customer Reviews
Reading customer reviews is essential for product research.
This is how you find out what people think of the products you're considering selling.
Look for common complaints:
- Was the color of the product off?
- Did the overall quality seem cheap?
- Did it not solve the customer's problem?
Use these critiques to inform your tactics.
You can either:
- Decide not to sell a problematic product
- Find, or even create, a product that solves their problems without losing the winning qualities of the original item.
The second option can prove extremely lucrative if you find a good alternative.
4. Consider the Competition
You'll need to consider your competitors when conducting product research.
In general, products with heavy competition of about 50 or more competitors are usually hot selling items. But, this won’t make the selling process easy for you.
Instead, stick to products with 10-20 competitors to give yourself a fair shot at competing for sales.
Competitor Product Research
Researching competition can be done in a variety of ways, but one quick way to analyze the competition is through the shopping tab on Google.
Simply type the name of your product in the search bar, navigate to the “shopping” tab, and view how many other stores are selling the same product.
Below are some sellers of hiking sticks on Google Shopping:
Overall, there are 37 sellers for hiking sticks on Google Shopping, which isn't bad.
You'll still need to do more research for companies that aren't on Google Shopping, but this will be the bulk of your competitors.
Your findings will help you decide whether the competition is too stiff or not to introduce another similar item.
5. Aim for Higher Profit Margins
Your goal is to earn as much money as you can on the products you list, but how can you identify the products that will produce the highest profit margins?
To narrow down your search, steer clear of products that you can’t sell for at least $20.
Anything cheaper than that will likely eat into your costs and deplete profits you’d otherwise get to pocket.
The best products won’t cost much to ship, are budget-friendly to produce, and easy on your wallet to advertise.
BUT, we can't always get what we want.
Expensive items can be great to sell, if there is a luxury market for them. And there usually is.
You'll just have to change up your advertising strategy and target high-value customers that want to spend more.
Either way, you don’t have to sell the cheapest, or even the most expensive item to take home a healthy profit, you just need to find the sweet spot for profit margins.
Product Research Pop Quiz:
Do you think this is a good product to start selling?
It's one of Amazon's best sellers, it has thousands of good reviews, and it's a cheap item to manufacture.
But, the competition is stiff, there's essentially no way to distinguish yourself, and these things are cheap.
There's very little money to be made on them. To make things worse, these sellers are paying for favorable placement.
They're not clearing much per sale, but they're undoubtedly making up for it in volume. This works for them, but this is not worth the trouble and expense for a new seller.
6. Refer to Current Market Trends While Doing Product Research
Another easy tool to help you conduct your product research is just as accessible as checking Google’s shopping results.
Revisit sites such as Amazon, Wish, Etsy, and eBay and view their trending products.
As we’ve already covered, you should watch out for fad-products – they won’t earn you money for long and it’s difficult to predict when the market will move on from the product.
But, it's a great idea to think about what is becoming more popular with each passing year.
Here's the Google Trends chart for "Massage Guns."
It's hard to say whether or not this will be a fad product.
But, this is what product research is for. Taking informed chances.
If you can identify a trending product and enter the market before it’s too saturated, there’s serious money to be made.
7. Beware of Seasonal Items
To round-out your product researching skills, keep in mind one of the most crucial variables: Seasonality.
While plenty of seasonal products can return steep profits, keep your eCommerce goals in mind. Will entering a seasonal niche be something that will benefit you overall?
As you consider seasonal products, turn back to Google Trends to help you track the demand for a product over the year.
By reviewing the search demand for the product in question, you can gain a better understanding of when the product will sell.
Here is the search traffic over the past 5 years for "ceramic christmas tree."
It has a very clear uptrend and downtrend every single year. Someone probably makes a lot of money off of them every late November through December.
If you have other ways of earning income throughout the rest of the year, then maybe give seasonal items a chance.
However, I don't recommend putting all of your eggs in that basket without a backup plan.
What if a new firm comes in and throws your sales off? You have a very short period of time to fix it.
Final Thoughts: Don't Skimp on Product Research
Good product research will help you avoid making an expensive mistake.
It does require some time and dedication. But that's what building a business is about.
- Find a Niche
- Analyze Your Product Leads
- Read Customer Reviews
- Consider the Competition
- Aim for Higher Profit Margins
- Refer to Current Market Trends
- Beware of Seasonal Items
Good luck in your search!
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