Finding Your Way
How To Choose Products
Selecting your product is probably the most important decision you’ll make for your business. It has long-term impact and affects all subsequent choices you’ll make. E-commerce has been around for some time now, so thankfully there are a few tried and tested strategies to help you with this.
1. Keep It Close To Home: when you start brainstorming for product ideas, begin from what you know. If you’re an avid angler, you won’t run off the reservation with baby gear, right? (Unless you’re an angler and a supermom, in which case – you’re totally awesome and just rock on ;) By choosing a product you personally use or are interested in, you make a decision that ties your passion to your business. It also puts you in a position of deeper understanding how people with similar interests – your target customers – are going to relate to the product. That said, however, you should approach the product picking carefully and base it on reliable and measurable criteria. That is why the next step is so important.
2. Do The Legwork: Before going all out, test your idea. Test it with your friends and family. To overcome their potential bias (they want you to succeed which may impact their feedback), you can go down the road of online surveys. Poll your target audience using on-line tools such as Survey Monkey, it’s easy and not that pricey. Also, browse! Browse Google for keywords or utilize a tool such as Google Trends to see what products are trending, in which markets and where. You can turn to Amazon Bestsellers, eBay Deals, or AliExpress Top Selling products – these can give you an overview of the trending products, you can browse categories and compare prices.
3. Check Out the Competition: As part of your research, you should also look into other e-commerce businesses that are thriving in the portion of the market you want to get in on. Browse their websites, read their reviews, check the feedback from their customers and see if you can spot trends, recognize what they should be doing better and incorporate that into your own business idea.
4. Find Your Niche: All the research will also help you identify your niche. You want to go for products that are not all over the place and that won’t make you compete with the big, well-established businesses. Research lets you identify a need in the particular segment of the market – an unsaturated part of the market - and then it’s up to you to work on how to fill that need. Also, take geography into consideration – look into data relevant for the area you’re targeting and make feedback locally relevant. And bear in mind the potential seasonality of your products – yes, ski gear aficionados, we are looking at you!
5. Size Does Matter: For the purpose of testing out the waters, it may be more advisable to start with compact, lightweight products that have low shipping costs. Shipping and delivering something as unwieldy as an e.g. car engine may turn out to be a huge pain in case a return comes up and incur extra cots with your supplier.
6. It’s All About The Money: Consider the price and the profit you can make on a product. Typically, the least risky version is to start with products that do not cost much. But then – how many units of cheap products do you have to shift in order to make some profit? Most dropshipping guides suggest starting with a product worth between either 75 and 150 USD or 100 and 200 USD in order to ensure enough profit to cover any associated expenses. You should also consider how much you’re willing to put in to get your business off the ground – will you cover the advertizing expenses (Google AdWords, Facebook Ads, etc.) to generate traffic or will you just go down the free rout and work on Search Engine Optimization for getting those clicks going? In addition, you should consider all other costs that could potentially eat into your profit (check our overview on how to select your supplier for more information).
Whether this is your first go at on-line selling, or you’ve been threading waters for some time, there is wisdom to be found in different on-line communities and forums that discuss the daily grind of running an e-commerce store. Check out some of these for the useful tips and tricks to get you started. Also, the internet abounds with detailed product selection and dropshipping guides – find one here. Happy dropshipping with Dropship Explorer!