Now that you've selected a product and niche to further explore and evaluate, it's time to put it under the microscope. Without properly evaluating your product and niche idea, your choices will be random—and so will your chances of success.
Using the evaluation criteria below, you’ll get a much better sense of your product and niche, along with a better understanding of its strengths and the knowledge to identify its weaknesses.
You will likely never find a product orniche marketthat fits all the criteria below. But evaluating your idea against this list will give you a better understanding of your chosen product/niche, helping you avoid pitfalls and increase your overall chances of success.
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What is product research?
Product research is the process of gathering and analyzing information about a product, its market, competitors, and potential customers. The goal of product research is to identify opportunities, assess demand, and make informed decisions related toproduct development, marketing, pricing, and distribution.
Product research answers questions such as:
- Will the product be a success in the market?
- What are similar products in the market?
- What’s the best way to develop and sell the product?
Businesses that perform regular product research stay ahead of competitors. It also helps with developing innovative, high-value products, because you’ll always know what’s on trend and if the trends will grow sustainably.
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Learn moreHow to do product research
Before we get into each evaluation point, let’s take a look at a quick overview of all the criteria we’ll be covering:
Market-based criteria
- What is the potential market size?
- What does the competitive landscape look like?
- Is it a trend or a fad, a flat or a growing market?
- Is your product available locally?
- Who are your target customers?
Product-based criteria
- What is your markup?
- What’s your potential selling price?
- What is your product’s size and weight?
- How durable is your product?
- Is your product seasonal?
- Does your product serve a passion, relieve a pain, or solve a problem?
- How often will you need to turn over inventory?
- Is your product consumable or disposable?
- Is your product perishable?
- Are there any restrictions or regulations on your product?
- Is your product scalable?
Let’s look at each of the criteria in more detail:
1. Evaluate market size
Market size can be difficult to determine but with some educated guessing you can probably get a good idea. For example, a product that caters to pregnant females between 25 and 40 years old probably has a sufficient market. But a product that caters to pregnant females between 25 and 40 years old who like punk rock music will likely be too narrow.
Example:Danesonsells high-end, luxury toothpicks. You can imagine that it takes a pretty discerning and dapper man to purchase exquisite toothpicks.
A product like this likely has a very narrow market size. This narrow market size limits the revenue potential for this business. However, depending on the exact market, a narrow market size potentially can be easier to market to, allowing a company like Daneson to penetrate its market and capture it more cost effectively.
Determining exact market sizes is usually impossible for most businesses, but there are some ways to understand market size in a more general way. Google Trends is a good starting point—not to determine market size, but rather to determine market demand trajectory.
From there you can also look for your particular product idea being sold elsewhere and look at the number and quality of customer reviews. Are there no reviews, just a few, or hundreds?
This can give you an idea of how many people are searching for your keyword terms and, in return, can also give you a better sense of the market size. Combine all these methods with some realistic judgment and you should start to get a good sense of the potential market size of your product idea.
2. Analyze the competitive landscape
What does thecompetitive landscapelook like for your selected product and niche? Are you first to market? Are there already a few competitors or is the market saturated with people selling the same product or targeting the same niche?
If you’re first to market, you’ll want to do a lot of market research to determine that there is in fact a market interested in your product.
If there are many competitors in the market, that’s a sign the market has been validated. However, you’ll likely have to determine how you can differentiate your brand and products from the sea of competitors in order to carve out your own spot.
Google searches andSimilarWebwill help you uncover current market players, and an SEO tool likeAhrefscan tell you approximate search volumes for your chosen keywords.
Doing keyword research with a tool like Ahrefs or Semrush helps get a realistic view of search demand. It also helps with opportunity mapping: if the difficulty is high, I can look for longer-tail results. The long-tail approach is best for entering new markets.
它也将告诉you how competitive they are (meaning how many other people/businesses are bidding on those words).
3. Determine product category outlook
Riding a fad can be dangerous. A trend can be lucrative. Stable markets are safe, and growing markets are ideal. Understanding where your product and niche lay can play a huge role in your success or failure.
To better understand the differences between each of these, let’s look at the growth curves, then at real world examples of each type:
Fad
A fad is something that grows in popularity for a very short period of time and dies out just as quickly. A trend can be lucrative if your entry into the market and exit are timed perfectly, but this can be difficult to predict and usually a recipe for disaster.
AGeiger counteris a personal electronic device about the size of a cellphone that measures the level of radiation around you. Shortly after Japan suffered an earthquake in 2011, Geiger counters were flying off the shelves. However, as you can see from the Google Trends graph below, interest died as fast as it started.
Trend
A trend is a longer-term direction that the market for a product appears to be taking. It doesn’t grow as quickly as a fad, it lasts longer, and generally it doesn’t decline nearly as quickly.Trending productscan sometimes also develop into long-term growing markets, although this can be difficult to predict.
As an example, over the last 10 years, gluten-free foods have been growing in popularity. We can see from the graph below a consistent climb, but this likely would be predicted and labelled a trend, as opposed to a growing market, due to the ever-evolving and changing nutrition market.
Stable
A stable market is one that generally is immune to shocks and bumps. It is neither declining nor growing but maintains itself over long periods of time.
A kitchen sink is a perfect example of a product with a market that has generally remained constant and flat for decades. There’s likely not going to be any huge spikes or dips in the interest and purchase behavior of kitchen sinks.
Growing
A growing market is one that has seen consistent growth and shows signs of a long-term or permanent market shift.
Yoga has been around for a long time, but over the last ten years or so has become a mainstream health and fitness activity. The benefits of yoga are well established, making this niche a solid growing market.
Google Trendswill help give you the big picture as to whether something is a fad, trend, growing, or stable market. If you see unexplainable spikes, try doing some further searching to see what the possible cause was.
4. Is your product available locally?
A product that’s readily available locally means there's one less reason for consumers to seek your product out online. However, a unique or hard to find product that isn't available locally means there’s an increased chance of someone looking for it online and increases their chances of actually purchasing it online.
Example:Ellusionistsells artist collaborations: high-end decks of cards for magicians and card players alike. Sure you can go buy a deck of cards anywhere, but these are not just cards—they’re works of art and trick decks, and if you want one, it’s only available online.
One of the simplest ways to find out if your selected product is available locally is by doing a search on Google for your product + the name of your city, or if you don’t live in a major city, try substituting the name of the major city you’re closest too. For example, you could search for “magician deck of cards + new york.”
5. Determine your target customer
You don’t need to go into great detail defining your exact customer persona at this point, but, you should be aware of the type of customer you would likely be selling to and their online purchasing capabilities.
If you have a product geared to teens, it’s important to keep in mind that most teens don’t have a credit card to make purchases online. Similarly, if your product is geared toward older baby boomers, you may find that your target demographic has a lower level of technology adoption and doesn’t like to purchase online.
To find out more about who your target customers are, you can look into your Google Analytics account. Shane Pollard, Chief Technology Officer atBe Media, explains that, when doing product research, he likes to “have a good look” into the following Google Analytics reports:
- Audience demographics,because this is key to understanding age ranges, male vs. female, and how the current product appeals to that demographic.
- Geo location,because knowing what audiences are doing in a location can help form an insight. For example, that people in Melbourne don’t need a lawn mower as much as people in Perth, based on Melbourne having a higher percentage of people living in apartment complexes, due to Perth, having more of an urban sprawl.
- Top pages,which are a great pulse check for how many people are looking at products. Shane has come across reports where the top product was described as outperforming every other product by 10x, only to review top pages and see that the 10x was in reference to hundreds of visits, and not thousands. The way the data was phrased made it sound like more of a performer than it actually was in scale.
Image: courtesy of Google
6. Determine markup
It is vitally important to take markup for a specific product into consideration before diving too far into a product idea. When you begin selling online, you’ll quickly find out there are lots of small fees that will eat into your margins, so having a strong initial markup will provide you with the necessary cushion to absorb these little costs.
To understand margin a little better, let’s take a look at a real product. For this example, we will use a pet pedometer—a small electronic device you connect to a dog’s collar to count how many steps they take.
Looking around at other pet pedometers, we determined that an average retail price on a product like this would be $24.99. UsingAlibaba, we found out that we are able to get these pet pedometers at a cost of $2 per unit.
A 1,200% markup! Looks good so far, right? Let’s take a closer look at the other fees that we will need to account for:
You can see from the example above how the small fees will whittle away at your margins. In this case, a product that had an initial markup of over 1,200% ends up with a markup of less than 100% when all is said and done.
Of course, these are just approximates and you can cut costs significantly by handling fulfillment yourself and spending less on advertising. Regardless, knowing this information upfront will be important to know.
7. Figure out selling price
Selling an inexpensive product means you’ll need to move many units to make a decent profit. Additionally, along with moving a lot of units comes increased customer service inquiries as well as an increase in other operating metrics. On the other hand, selling very expensive products means a longer sales cycle and more discerning customers.
Generally, a product price point between $75 and $150 is recommended, as it minimizes the need to find a large number of customers to turn a decent profit and is still able to give you some cushion for marketing and operation costs.
Our previous example, the pet pedometer, had a relatively low selling price of $25. Because of this, variable costs ate away at much of the profit, leaving a profit per unit of only $12.95.
Let’s see what happens, though, if we switch out the pet pedometer for a new product and assume that this new product has a potential selling price of $100 (4x more than the pet pedometer). For consistency, we’ve also multiplied the other appropriate cost by a factor of four.
Because of the higher pricing, we have much better margins—73% vs. 42%—for the pet pedometer, and our profit per unit skyrockets from $12.95 to $76.75.
8. Determine product weight and size
Product size and weight can have a big impact on your sales and bottom line. These days, many customers expect free shipping, and just rolling the shipping cost into your prices doesn’t always work. This means these costs tend to eat into your margins. If you decide to pass the shipping costs onto your customer, you’ll find that the shock of high shipping will likely hurt your conversion rate.
Additionally, if you don’t plan to use thedropshippingmodel, you’ll need to consider the cost of shipping the products to yourself (or your warehouse) from your manufacturer, as well as storage fees. If you’re ordering your inventory from overseas, you might be surprised at the costs involved.
例子:有一个流行的瑜伽垫的公司sells oversized workout mats. The product itself is a reasonable $99. However, shipping is $40 to Canada and $100 to the rest of the world. For many consumers, it would be hard for them to justify spending 40% to 100% more for shipping.
9. Is your product durable?
How durable or fragile is your product? Fragile products can be an invitation for trouble. Products that can break easy will cost you more in packaging and you’re bound to have more returns and exchanges.
10. Is your product seasonal?
Businesses with seasonal demand can suffer from inconsistent cash flow. Some seasonality is OK, however, an ideal product will have somewhat consistent cash flow year round.
If you do choose a highly seasonal product, you may want to consider ahead of time how you can overcome seasonality, possibly by marketing to different countries in the off season.
Check for seasonal trends by looking atGoogle Trendsfor your product and niche keywords.
11. Does your product serve a passion, relieve a pain, or solve a problem?
We discussed this point early on in this guide, but it’s always an advantage to sell products that serve a passion or solve a problem.
An additional benefit is that when you sell products that satisfy one of these requirements, your marketing costs tend to be lower, since customers are actively seeking out a solution as opposed to you having to heavily market your product to find them.
12. What will your product turnover be?
It can be risky to have products that constantly need to be changed or refreshed. These types of products run the risk of not selling before the time of turnover. Before jumping in head first and selling a product with regular turnover, it’s vital to know what your turnover schedule will look like and plan accordingly.
For example, smartphone and tablet cases are a hot market. Yet creating new designs usually requires a high initial investment for designing, prototyping, and minimum order quantities. One of the harder parts of building an online business in a niche like smartphone cases is gaining enough traction and exposure before the next model smartphone/tablet comes out. Not selling through your inventory fast enough could leave you with a stockpile of outdated cases.
13. Is your product consumable or disposable?
Having consumable or disposable products makes selling to the same customer over and over again more natural by essentially putting a time limit on the product’s life and giving the customer a reason to come back to you for replenishment.
Harry’s, for example, sells products that generally are highly consumable, like razors, shaving cream, and deodorant. This model keeps consumers coming back to their site to repurchase.
14. Is perishability a factor?
Perishable products are a risky proposition for any business, never mind an online business. Since highly perishable products require speedy delivery, shipping can be costly. Even products with a longer perishability timeline can be risky, as it complicates storage and inventory, potentially leaving you with spoiled products.
For example, food products, supplements, medication, and anything else that needs to be kept cold or has a short expiration date all require special consideration when ordering inventory and shipping to customers.
15. Are there any restrictions or regulations?
Restriction and regulations on your product and niche choice are annoying at best and crippling at worst. Before you move forward with your product idea, you’ll want to make sure there are no regulations or restrictions on your product selection. At the very least you’ll want to make sure they are manageable.
Certain chemical products, food products, and cosmetics can carry restrictions not only from the country you are importing your goods into but also the countries you’re shipping your products back out to.
You’ll want to consider making a few phone calls to customs and border services of the country you’ll be importing your product into, along with your warehouse, if you plan on using one, as well as the Food and Drug Administration in the case of a food/supplement product.
16. Is your product scalable?
It's difficult to think about the future and growing your business when you’re still in the launching phase, however, scalability should be considered and built into the business model right from the start.
If your product is handmade or contains difficult-to-find materials, think about how to scale it if your business takes off. Will you be able to outsource manufacturing? Will your number of employees have to increase with the number of orders or will you be able to maintain a small team?
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6 tips for effective product research
Whether you’re researching your first or fifth product, keep these product research tips in mind:
- 按照消费趋势的出版物
- Find bestsellers on Amazon
- Browse social curation sites
- Evaluate B2B wholesale marketplaces
- 观察利基forums
- Ask your own customers
按照消费趋势的出版物
Consumer trend publications can expose you to new products and industries you may not have known existed. They also help you stay up to date on the latest trends to remain competitive and discover newproduct opportunities.
One free platform to follow isTrend Hunter. Trend Hunter is the largest trend community, with over 200,000 people dedicated to finding the latest trends. You can find trends for anything on this site, including beauty, fashion, culture, luxury, and more.
Say you spot a trend like “empowering pandemic emojis.”
You could turn this into abusiness ideaand create a range of apparel or accessories based on these designs.
Another trend platform to check out isPSFK. It’s a membership website that produces reports and insights around retail and customer experience trends.
TakeInkkas为例。品牌找到了混乱关系nd for wearing Pervuian textiles and turned it into a shoe business. Inkkas works with local artisan shoemakers in Peru to create the designs, then sells them online through a Shopify store.
Find bestsellers on Amazon
Amazonis one of the largest consumer marketplaces in the world. You’ll for sure find thousands ofproduct ideasthe minute you land on the site. But it’s easy to get lost in all the products and ads if you don’t have a plan.
To speed up the process, go straight toAmazon’s bestsellerslist. You can find profitable products from any category, from toys and games to patio, lawn and garden and more. All products on the list are based on sales and updated hourly. So you’ll never run out of product ideas for your business.
If you want more detailed information about products on Amazon, you can use a product research tool likeJungle Scout.
You can easily search from any product by keyword, category, or custom filter with the brand’s product database, a searchable catalog with over 475 million products from Amazon. Or evaluate product ideas in seconds with its Chrome extension. All of this can give you ideas for winning products, whether you’re an Amazon seller or run an online store.
Shane also looks at a few different factors when doing Amazon product research:
- Product listing reviews
- Who is spending on ads
- Product variants
- What product bundles exist
Browse social curation sites
Image curation sites can be a rich source for finding product ideas. Just by looking at likes and trending photos, you can get a sense of market demand for a specific product or niche.
A few sites to check out include:
- Pinterest, the largest visual discovery engine and curation site
- We Heart It, for fashion and beauty product discovery
- Dudepins, for discovering and buying products for men
- Fancy, for unique collections, from home decor to art to clothing
- Wanelo, a digital mall with over 12 million products people can discover and buy
Evaluate B2B wholesale marketplaces
B2B批发市场是鳍的金矿ob欧宝娱乐app下载地址ding new product ideas straight from the source. These sites will expose you to thousands of potential product ideas to sell. If you end up liking a product, you can buy it right away.
Two sources you’ll want to check first areAlibabaand阿里巴巴全球速卖通, which are marketplaces that connect you to manufacturers from Asia. They have hundreds of thousands of products to explore. You can find almost anything.
The trick is looking at the various marketplaces to see what’s trending then cross-referencing it with Alibaba to see if you can spin it in a unique way.
Alibaba is for B2B transactions. So if you want to order large quantities of a product directly from manufacturers, you’d use Alibaba.
On the other hand, AliExpress is available to everyone. If you want to test a product, you can order in small batches from AliExpress. You can also dodropshipping with AliExpress.
Other B2B marketplaces to explore are:
观察利基forums
Industry and niche forms are another way to discover new products to sell. They are also a good place to connect with potential customers over shared experiences and to discuss relevant topics with them.
Some niches, like gaming, have active online communities. For example, if you wanted to do product research, you could head to websites likeGameFAQsorNeoGAFto observe discussions around video games.
There’s alsoReddit, which is the forum of all forums. You can find communities within Reddit for any topic, like tech, culture, and environment. To date, there are over2.2 million subreddits, also known as communities, where people come together to talk about different topics related to the community’s title.
And if you’re still not finding any forums around your niche, try searching Google. Type your niche + forum into the search bar and see what results come up.
Ask your own customers
Whether you have five or five hundred customers, one of the best ways to get product ideas is from your own customers. You can send an email to your customer base and ask for their feedback on a few product ideas you have in mind.
It’s a tactic that Alfred Lua, founder ofOpen Atlas, uses to improve on his existing product line.
“From my experience running Open Atlas,” he says, “I found doing customer service myself was helpful for getting product ideas. For every order, I would email the customer and ask about their experience: ordering, delivery, product, etc. A handful would reply and give me their feedback. I collected their feedback for version 2 of my product.”
Whether it’s you or your support team sending these emails, you can still get feedback and use it to inform your product development process.
Find your next bestselling product today
Choosing the right product and niche is at the very core of yourecommerce businessand is one of the most important decisions you’ll make.
Using the above criteria as a guideline can help you find low-competition, high-demand products that’ll likely be a success.
Do you have another method of validating a product idea that has worked well for you? Let us know in the comments.
Illustration by Luca D’Urbino
Product research FAQ
What’s the difference between product research and market research?
How do you start product research?
- Evaluate market size
- Analyze competitive landscape
- Determine product category
- Define target customer
- Figure out profit margin
How do I research a product to sell?
- 按照消费趋势的出版物
- Find top sellers on Amazon
- Browse social curation sites
- Evaluate B2B wholesale marketplaces
- Read niche forums
- Ask your own customers