One of the biggest mistakes online sellers make is choosing products that they like but that turn out not to be the best products to sell online. It really does not matter that you think they are great products. The only thing that matters is finding the best products to sell online from the customer’s perspective. Selecting the best products to sell online is based on hypotheses and observations and then through a structured validation process. What you think is true about your audience and their preferences can be wrong and what you think is wrong can be surprisingly true.
Finding the right or the best products to sell on your online store requires research. To find the best products to sell online, ask yourself the following questions:
1. What do people want and need?
You can’t sell products that nobody has heard of or that they do not want or need. Although it may seem obvious to you, you will need to validate that people will respond to your product offering, using test ads, and not guessing.
2. Is it something that fixes a problem?
The best products to sell on an online store solve a particular problem.
3. Is it something that can’t be found in regular stores?
If what you are selling can be readily found at Walmart or a similar brick and mortar store, likely it will not be a good product to sell on your online store since most consumers seek instant gratification and prefer to buy products from a department store vs an online store to feed their need for instant gratification.
4. Is the price range something that people can afford?
The more expensive an item the more research a buyer will conduct before making a purchase. Generally speaking, men spend more money per item than women but make fewer online purchases. The sweet spot for women-oriented products is those that sell for less than $50. For men, that sweet spot is items that sell for less than $150. Products that sell for more are much harder to sell online.
5. Can you create a WOW effect?
When someone unboxes an item, you want to create a premium experience and elicit a wow reaction. Custom packaging is an easy and low-cost way to create customer loyalty and word-of-mouth marketing opportunities.
6. How many others sell it?
Contrary to popular belief, and this is particularly true for new online sellers, you do not want to sell products that are Blue Ocean products. Rather focus on popular products because by their nature, there is already established demand. If you sell products in an uncontested market, you will not get much traffic to your site and as a result, search engines like Google will not rank your pages very high.
Moreover, it is very hard to predict what products will ultimately become popular. By focusing on products that you think will sell well without any factual data, you risk buying and holding inventory of products that will never take off. Leave the speculation to others and jump in only well after a product trend has emerged.
7. Where is the product on the trend cycle?
Most products sell in waves. Some external event draws attention to a product, and product sales take off. After a while, the market becomes saturated and sales begin to trail off. The following is a ten-month trend related to Fidget Spinners.
For about 5 months, people could not get enough of fidget spinners and every retailer including my local pack-and-ship store was displaying them on the impulse racks next to the cash register. Then, as suddenly as it appeared, the trend died out. While the fidget spinner was invented in 1993 for people with attention deficit disorder (ADD), the first recorded occurrents of a search for fidget spinners dated back to late summer 2016, but searches were still few and far between. By February and March 2017, a surge of online searches for fidget spinners began to emerge. By September 2017, searches had dropped to near zero as the market for fidget spinners became saturated. In hindsight, by April 2017 it became clear that there was enough interest in fidget spinners to consider the product.
It would have been impossible to predict that this product would become popular when it was introduced. If you had an online store focused on low-cost toys, April 2017 would have shown enough interest in fidget spinners, for you to consider stocking up to sell them on your online store. However, by mid-June, it became clear that the trend cycle was ending, and it was too late to start selling them.
The fidget spinner is a rather compressed trend cycle and a product that was available in brick and mortar stores, and therefore less appropriate for sale on an online store, but it does provide a textbook example of a trend cycle.
When it comes to trend cycles, picking an early winner is too risky. For most online products it is better to wait for the trends to emerge and take hold before committing to selling the product on your online store. Moreover, getting in too late as the trend is declining has the potential to leave you with a lot of excess inventory that you’ll have to sell at a loss.
8. How much does it sell for on Amazon?
Having a store on Amazon can be like having a retail store in a mall. After all, a shopper on Amazon is there to buy. However, because you are selling trending products, there will be a lot of other online Amazon stores selling the same item. As such, margins are squeezed, resulting in smaller profit margins.
In contrast, when you have a specialty store selling the same product and you do a better job describing and answering common buyer objections and concerns, data shows that you can sell the same product for up to 30% more than the same product being sold on Amazon.
Furthermore, when you have a website with several related products and you do a better job providing content that describes your products, you will earn, over time, premier site status with search engines like Google.
9. Do you have easy access to vendors?
As we learned in Porter’s Five Forces, it is never a good idea to leave your vendor or supplier with more power during purchasing transactions. Never sell a product that doesn’t have multiple vendors because as soon as you begin to show success with increased sales, the vendors, especially if they are in China, will either do an end-around and sell the product themselves, limit your supply, or raise prices to capture more of your margin. When you have multiple vendors, you essentially remove any leverage they have since you can simply buy more from their competition.
10. Did you test the product?
Too many online stores offer products that they have never used or tested themselves. Before you list a product on your online store, be sure to order an evaluation copy and put the product through its paces to validate its quality and marketing hype. Many manufacturers will offer OEM services meaning that you can customize the product and create private labeling. Generally, creating a private labeled product will come with a higher minimum order quantity.
11. Is the product one that you can sell with Facebook ads?
Facebook has to approve every ad that you run. They have a strict Commerce Policy that does not allow you to have ads intended to sell certain products. If you plan to market your products using Facebook ads, you should make it a point to understand Facebook’s Advertising Policies.
Have you asked the proper questions to find the best products to sell on your online store?
Special thanks to Michael Beck for his review of this post. Michael is a SCORE colleague and a maven when it comes to selling online products. Michael is the CEO of BeckTan and Groupe Beck, two businesses that provide consulting services for entrepreneurs with online stores. He is a serial entrepreneur with a wealth of business experience having built more than a dozen successful businesses.
