eCommerce storefronts have more opportunities now than in the history of the Internet. From selling on Amazon to Shopify, eBay and a company page such My Ecom Club, there are varying outlets all around the world.
However, in order to properly connect with a key demographic and product research best designed for their needs, it’s important to conduct the necessary eCommerce product research.
This research helps to identify both what a target audience is looking for and how a product will fair with the core demographic. All of this is possible with effective product research, it just comes down to determining the means to go about gathering this research.
Here are several examples, tips, and tricks for finding the right product with effective
7 Tips on How to Find the Right Product with eCommerce product research.
What to Consider
There are a few key points to consider whenever it comes to producing and marketing a product. For starters, what will it cost the consumer? Anything more than $75 will find difficult footing in bringing in new customers. Buyers who are not familiar with a product become less likely to spend higher amounts of money on products from companies they have never seen before.
On the flip side, anything less than around $20 makes it difficult to market. Unless there’s a substantial inflation on the price (such as it costing $1 to make but charging $20 to buy), advertising will eat up nearly all of the profit margin (according to A Better Lemonade State, 2017).
The next point of interest is if the product is seasonal or if it can sell year round. Seasonal products are great for a particular time of the year, but sales likely plummet throughout the rest of the year. Take, for example, something for the 4th of July.
Sales will heat up around May and increase through the beginning of July. However, the rest of the year sales will be minimal at best. For continued profits, it’s best to start off with year-round products and then branch off for seasonal offerings that can supplement sales at different points of the year.
A great tool to use to determine what’s trending (and whether it’s a seasonal or year-long product of interest) is with Google Trends.
The ability to easily ship the product helps as well. Clothing, for example, doesn’t require much in the way if insulation or weather protecting packaging.
It’s also not oversized. Items not requiring additional packaging materials don’t cost as much to ship, which allows a company to offer “free shipping” and have it come across as less expensive than the competition.
Lastly, the ability to list a product on varying retail outlets makes it a more valuable option. While it’s always possible to list the product on a company website, not all products can be listed on e-Commerce services like Alibaba.
Alibaba offers worldwide shopping opportunities and while this may not be the initial goal of a company right away, the ability to sell internationally does open up new possible sales outlets down the road.
The most popular sales categories on Amazon may surprise people. According to Repricer Express (2018), the top-selling category on Amazon is books (and not the digital download kind).
Books offer a variety of benefits. For companies looking to turn a profit, it’s possible to purchase used books and resell the text online at several times the original price. Of course, the book market is heavily populated, so standing out from the pack can prove challenging.
Beyond books, the next leading categories on Amazon are “Babies,” jewelry, exercise clothing, and electronics. Electronics are the largest ticket item on the list, yet Amazon takes a smaller commission fee (eight percent, instead of the standard 15 percent).
Now, while these are the top five most profitable departments on Amazon, this does not mean these are the best departments for just any business to begin selling it.
The Web service JungleScount allows anyone to search a particular marketplace for sales numbers on a monthly basis. These sales numbers are not just brand specific but sector specific. This way, a company looking for a popular sector without a large competitive base can look up sales categories through the service.
The categories will indicate not just overall sales, but what companies are making sales. This may indicate exactly what kind of opportunities there are to move into a particular business category.
As Real Ties (2017) points out, there are a handful of products becoming increasingly popular but are not necessarily in the very top of selling categories on Amazon. After Amazon took over Whole Foods, food-based products have increased drastically over the last year, which chocolate sales increasing by nearly 250 percent (and grocery in general increasing by almost 120 percent).
As the graph indicates, it’s important to not necessarily focus just on the top-selling products categories but the fastest growing.
Markets to Enter
Whether a company wants to identify new markets or an up and coming business wants to select a market, to begin with, there are a handful of different options available to do just this.
First, a company should consider markets with high overall sales yet less than stellar ratings. When searching Amazon, eBay and other online retailers for sales statistics, it’s important to not only look at the volume of sales but the overall rating.
If a product has less than a 4.0, it means it leaves room for improvement. This improvement opportunity provides a potential window for another business to move in and offer a similar, yet better product. If sales are already high, it becomes that much more likely interested customers will look at the highest rated product by eCommerce Product Research.
Another possible market is one in its infancy. Mature markets are difficult to break into due to the established businesses already in place.
For example, attempting to break into the smartphone, computer or even the automotive industry is extremely difficult due to the established companies and brand loyalty in place. Instead, it’s best to go with a newer industry that lacks brand loyalty.
By moving in on the younger industry, it’s possible to instantly establish traction with a strong product.
Lastly, there’s nothing wrong with spying on the competition, identifying the products with the highest sales numbers and producing similar content. This happens all the time in the world of business. When one company produces a successful product, a competing business becomes much more likely to try and replicate this.
Copying the competition occurs in everything from smartphones to the movie industry (there’s a reason why similar movies often come out at the same time from competing production houses).
After all, when a company proves successful with a product it sells, it has effectively established a market for such a product. This doesn’t just occur in larger industries though.
Everything from jewelry manufacturers to candle makers monitors their competition to see what’s working and where the business can gain an edge.
In general, it’s best to find ways to add value to current products by eCommerce product research. This way, the new products differentiate from what’s currently available on the market.
Consider Advertising When Determining Profit Margins
It’s important to consider advertising costs when determining profit margins. This is why it’s difficult for up and coming businesses to make it in the clothing industry. When marketing on platforms such as Google and Facebook, unless an online clothing retailer has an extremely high rate of sales per click, the business will need to rely on large sales volumes to make its money back.
There’s a fine line between offering a competitive price and remaining financially solvent. So when searching for possible products to sell to a target audience, it’s best to find products between the $20 and $75 price point (according to A Better Lemonade Stand, 2017).
As Market Realist (2018) points out, video ad spending has increased every year since 2012, yet the growth rate has declined every year since. With advertising intensifying, businesses will continue to spend more money on a smaller market share.
Due to this, it is extremely important to consider the retail cost of a product and the potential return on investment.
Popular products in terms of sales numbers and what’s trending are not always the same. Often times trending products are newer with less competition. In order to jump on the trending bandwagon, it is necessary to have a quick production turnaround.
Additionally, trending products do not always remain popular, so these e-Commerce products may serve as items to make quick, short-term sales.
The service Social Mention makes it easier to look up what is trending in a particular category. This way, a company can sift through potential product ideas (for example, a t-shirt company looking up popular and trending shirt designs and slogans).
It’s not always necessary to look for universally trending products. Sometimes, identifying what’s trending in a niche category may prove all that’s necessary. As Oberlo (2018) points out, hair removal products have steadily increased in social interest over the last 14 years, as has denim mentions, fake eyelashes, and men’s shoes.
By understanding what’s trending in a specific category, it’s that much easier for a business to target specific products within its industry.
When A Customer Base Exists
There are times where a company already has a strong customer following. Looking for new product avenues doesn’t only occur with startup businesses. An extremely profitable company may want to expand its retail offerings without alienating its current clients.
In fact, the business may want to know what kind of products or services current customers may have an interest in. This is where an internal survey proves especially beneficial.
A service such as Survey Monkey makes it possible to poll an email list to find out what previous customers want from the company. The specially tailored survey may go out to the entire email list or a smaller segment.
Recipients of the email are previous customers who have shopped with the company in the past, so they have a vested interest in products the business provides.
According to Survey Monkey, there is an art to creating a customer survey for optimal results. 87 percent of survey recipients say they would rather answer multiple-choice questions instead of long-form, open-ended questions. 91 percent of customers do say they are willing to complete an online survey for a business they support, although 45 percent of survey recipients will not spend more than five minutes on the survey, so if the questions drag on they are more likely to abandon the questionnaire.
By creating short, to the point surveys, businesses may learn not only more about their target audience but what kinds of products and services they are interested in potentially buying in the future.
Product Testing Without the Customers
For new companies without the built-in email list, there are options similar to what Survey Monkey offers. After going through Amazon and other online retail outlets for possible product ideas, it’s essential to determine if there’s a market for the changes a company wants to make in order to implement its own variation on the popular online items. With a service such as Proved, this is possible.
Proved is an online marketing tool that polls members of a set demographic. To use the service, a company starts a new campaign, write out a description of the product (which offering any other insights possible).
Proved then generates user questions based off of the input insights. The questions are then sent out to members of a selected target audience. In a few hours, it’s possible to log back onto the Proved dashboard to see the response to these questions.
The questions include everything from whether or not the target audience would find a particular product of interest, what they would be willing to pay if they would share the product with friends and so on. It provides helpful market research even when a company doesn’t have access to its own target audience (or extensive marketing department).
In order to effectively reach a target audience, effective eCommerce product research is necessary. By taking advantage of these tips and suggestions, it’s possible to determine the idea market audience for a product and how to best reach these individuals.
While each product, business, and target audience varies from one business to the next, executing these steps will highlight an appropriate course of action. Which, when utilized correctly, will help deliver a greater rate of return on the products for sale.