How to Select Your Product Line - Researching Your Market
by Chris Malta
Choosing what products you'll sell is one of the most important decisions you’ll make regarding your eBiz. If you choose your product line based on personal preferences or hot-item lists, you're gambling with your business. There may not be a market for your particular tastes or the market may be saturated. And by the time an item reaches a hot-list, the supply has met or exceeded the demand.
That's why you need to base all your decisions on your market research. Gather information about specific products, not just overall market data. You want to know exactly what the demand and competition is for your particular item. You're looking for products with steady demand, but without a huge amount of competition — niche markets. Research can reveal a lot about what you should sell and how you should sell it.
Determine If Your Product Will Do Well
You need to find out if you can compete with a product before you decide to sell it. There are some questions you can ask that will help you determine if it's a good choice for you:
- • How much demand is there? Use tools like HammerTap.com or Terapeak.com to see how many people are searching for your product. You want items with a consistent, median demand.
• How much competition will I have? You can find your competition the same way your customers do — type the name of your item into a search engine and sift through the results.
If the market's flooded, be willing to keep looking — there are plenty of product markets out there with enough room for you.
• Can I be competitive? Consider your competitions' retail prices and their shipping costs. They may offset the one with the other, so it's important to look at both. Compare them with your own wholesale and shipping costs, and determine if you'll be able to charge competitive prices and still make a profit.
In addition to showing you which items you should be selling, market research can also show you how you should be selling them. You can see what keywords people are using to search for your product and pick keywords for your ads and your optimization accordingly. You want focused words that will bring in the right kind of traffic — users specifically searching for what you're selling.
You can also look at your competitors to see what the successful and unsuccessful ones do differently. Pay attention to their advertisements and auction listings to get an idea of what works and what doesn't. The more familiar you are with your market, the better equipped you'll be to succeed in it.