The whole point of starting an Ecommerce web site is to make money. That’s something you must not lose sight of (no pun intended!).
As you know, our business is Product Sourcing; finding legitimate Wholesale Suppliers who have already agreed to work with Home-based Internet Businesses through a variety of Product Sourcing Methods.
Our Directory covers millions of products, from thousands of well-known brand names.
So why does everyone who uses our Directories try to sell electronics?
Ok, I guess I did the same thing. When I opened my first Internet store, I plastered the walls of that place with things that I thought were cool. Stereo equipment, DVD players, Computer components, the shinier the better. I had the latest technology up there. Some of the items cost thousands of dollars.
I think that in the back of my mind, I knew that I wasn’t going to sell much of it, but it LOOKED really cool. I could show it to my friends and say, “Check it out…that’s MY store!” They were all suitably impressed, and I could walk around feeling like I was pretty slick. Whenever any of them asked me how much money I was making, I cleverly changed the subject.
The truth was that no one was buying much. Come to think of it, none of my friends bought anything, either. That should have told me something right there.
Look, electronics are fine products, but that market is saturated on the Internet. I use them as an example because it’s a situation I can relate to. The problem is not the product; it’s the COMPETITION.
Most of the people I’ve seen start an Internet Store or start selling on eBay want to know what the hottest selling products are on the ‘Net, so they can sell those products too. They’re missing the point, as I did. If you only sell the hottest sellers, you dilute your available customer base, because everyone else is trying to sell those hot products, too! You also run into those brick-and-mortar popular-item superstores that have millions of dollars to purchase tons of inventory at rock-bottom prices.
People buy all kinds of products. They don’t have to be cool or shiny. They just have to be things that people will buy.
Here’s an important ingredient for success on the ‘Net: sell those products that people use, but don’t stumble over every time they open a web browser.
For years now, through all the time I've been working in and writing about ECommerce, I've always come across one single question far more often than any other. It's a question everybody has, and nobody seems to be able to answer easily. What's the question?
"What should I sell on the Internet?"
People email us and ask us that all the time. People call us and ask us where they can find out how to make that decision. I myself have struggled with it many times. Lots of people know what products they want to sell Online. Nobody really knows ahead of time if those products stand a chance of making you money.
If you really want to know the answer to that question, your only choice is research, and lots of it. Based on years of experience, here's the basic process that we and many other successful Online Retailers would go through every time we try to decide on a new product to sell on the Internet.
· Find out what the Demand for the product is:
If I'm going to be a food vendor at a baseball game, what should I sell there? I may really like salted peanuts. Maybe I get up every morning and eat salted peanuts for breakfast, and drink a salted peanut flavored Power Drink. Than I have a salted peanut sandwich for lunch, and two processed salted peanut patties on a bun for dinner. So, I really love salted peanuts, know a lot about them, and think they're the greatest thing in the world.
Does that mean that I should sell salted peanuts at that baseball game? Well, it's something that I know people like to eat at baseball games. I know people do buy them at baseball games. However, there are things I don't know yet.
For example, how many people at that particular game are likely to want to buy salted peanuts?
Generally, salted peanuts are a good bet to sell at a baseball game. However, I may not know the area very well. If I'm a traveling food vendor, following sports seasons through the country in different states and different kinds of weather, salted peanuts may not always be a good idea.
Salted peanuts are pretty good when they're fresh and slightly oily. During the summer, people just eat them up left and right at baseball games. During cold weather, though, they tend to get more dry and crunchy, and the salt doesn't stick to them very well because the oil gets hard. If it's cold enough, eating salted peanuts outside can be a bit like chewing gravel. Yech!
Weather isn't the only problem. If it turns out that the game I'm going to sell at is a special event to raise money for the Worldwide Allergy Sufferer's Foundation, I will probably find that many people there might have an allergy to peanuts of any kind! That means that there is a much lower demand for my product than I'd like.
So, where is the game I'm going to be selling at? Is it a cold-weather game? Who's sponsoring it? Are there likely to be many people there who can't eat salted peanuts?
These same ideas, silly as some of them might sound, apply to Internet Sales as well. After all, the ECommerce on the Internet is just another place to sell products. The basic concept of Demand is the same on the 'Net as it is anywhere else, and has been for all time. If there aren't enough people who want it, there's no profit in selling it!
When we at Worldwide Brands, Inc., want to know what the Demand on the 'Net is for a product, we used to spend many hours, and sometimes days, researching.
To find out what the Demand for something is, we need to find out how many people are searching for it in the Search Engines.
We try to find out how many people are using those Search Engines to look for the product we want to sell, then we categorize that information according to the different search term variations people use.
For example, if someone were searching for a place on the Internet to buy salted peanuts, they might use the search term "peanuts, lightly salted", or the search term "salted peanuts", or many other variations. We have to try to think of what those variations might be, and find out what the Demand is for each of them. Overall, we're looking for numbers on just how many people are searching for our product using different search terms. The more people who are searching for it, the higher the Demand.
Once we have those numbers, we go on to the next part of our research.
· Find out what the level of Competition is:
So, what else do I need to know if I want to sell salted peanuts at a baseball game?
Well, I've done my Demand research. I know
that this particular game will be a summer game, so the peanuts
won't get cold and gravelly. So, I know I have a good Demand for the product.
Now, I need to know what my Competition will be like. Before I pack up my peanuts and go to that game, don't you think I should try to find out how many other vendors I will be competing against?
If there are fifty other vendors in the
stands selling salted peanuts, I do not want to be 'salted peanut
So, I'm going to do some more research. I'm going to contact the ballpark's management office, and try to find out how many of the vendors at the ballpark are planning on selling salted peanuts. They may not know exactly, but they'll have an idea. If there are fifty other vendors selling salted peanuts, I'm going to ask how many vendors are selling lemonade. I may not like lemonade. Maybe the taste of it makes my face scrunch up and look goofy, and the sugar gives me the squeaking jitters.
However, if there are only five other vendors selling lemonade, I'm going to screw together my courage and darned well sell lemonade at that ballpark instead of salted peanuts. Knowing salted peanuts as well as I do, I know there are going to be a lot of thirsty people there, with fifty salted peanut vendors roaming around.
Again, the internet is the same way. The 'Net is just another place to sell things, and if there are too many people selling the same things, nobody makes any money on them. That's what we're here for, after all, right? We're in this ECommerce thing to make money, not to satisfy our personal taste.
Once again, when we at Worldwide Brands, Inc., want to know what our Competition is for a new product, we used to spend many hours, and sometimes days, researching on the Internet.
What are we looking for? When we look for our Competition, we know that there are two basic ways that people sell on the Internet. They use Internet Stores, and they use Auctions. So, we need to look at both.
We start with a dedicated Internet Store shopping site with a high degree of popularity, like Yahoo Shopping, for example. We spend hours in there, acting like a customer, using different search terms to search on the products we want to sell. We find out how many Stores sell only those exact products, how many sell products similar to them, and how many sell the exact products and others similar to them. We look at which Stores have higher popularity, and which of those feature our potential products more prominently than others.
We break all those numbers out into categories, and write all that
information down. Then we go to the next part of our research.
· Find out what the General Interest level is
Salted peanuts are a bit of a "gimme" in this area. Everybody knows what they are, and most people like them. On the Internet, though, it's important to find out what the general level of knowledge and interest is for a product before trying to sell it.
Here at Worldwide Brands, Inc., we used to go out to the big Search Engines, and search for our product again under many search terms. This time, though, we did it not as a customer, but as someone interested in information about the product. Kind of like the difference between wanting to buy a package of salted peanuts, and wanting to write a school report about how they are grown and packaged.
General interest in a product helps to gauge where our Demand and Competition numbers fall into the big picture.
For example, if there isn't much Demand for a product, and there isn't much Competition, it would seem that it might not be a good seller. You can't sell something to people if they're not out there looking to buy it. If there aren't many people out there trying to sell it, either, then it's probably not a good idea.
However, if there is a lot of General Interest, it may be that we've stumbled across the Holy Grail of Internet Retail research; the fabled Untapped Product Market! That's rare, but it happens. People find Untapped Markets, and begin to exploit them through associative advertising (advertise a more common, related product to lead people to a new one).
However, as I said, the more common use for General Interest information is to help us understand what our
Demand and Competition numbers mean.
Once we have General Interest numbers, we
go to the next part of our research.
· Find out how others are Advertising this product:
Let's say that based on my research so far, I think I can make a good business out of selling salted peanuts. I'm not just going to sell them at baseball games, either. I decide I want to place an ad in my local Yellow Pages, and sell salted peanuts to a lot more people.
Should I just jot a few words down, and send them off to the Yellow Pages Advertising Office?
Of course not. My research is still not complete. I'm going to need to see how many other people are advertising my product in the Yellow Pages. If there are a good number of them doing so, it may mean that it's a good product to get into. And if it is a good product to get into, I'm going to want to see what others are doing with their ads to make them successful.
So, I grab a copy of the Yellow Pages, and turn to the "P" section. Lo and behold, I find ads for salted peanuts. Some ads are big, some are small. Some are cheesy, and some are pretty interesting. I don't think there are too many ads to compete against there, so I decide to run an ad myself. I'm going to study the best elements from my competitor's ads, and create a better one than any of them.
Same thing on the Internet. If you're going to sell a product Online, you're going to have to advertise it in some way or another. Today, Pay Per Click Search Engines are the dominant force in Internet product Advertising.
So, here at Worldwide Brands, Inc., we would hit what we consider to be the three most influential Pay Per Click Search Engines; Google, Yahoo and Bing. That's where we begin our research.
Once again, we act like a customer. We use as many search terms as we can think of to search for the product we think we want to sell. What we're looking for here is twofold:
o How many other people are paying to Advertise the product Online?
o What do their ads look like and say?
The number of other people Advertising the product gives us a feel for whether the product is overexposed. If there is too much Advertising, that means too much Competition, which is not a good thing.
The way other people's ads look and what they say gives us ideas as to what our own Advertising could say if we decide to sell the product. We spent hours at a time gathering links to other Internet Retailers' ads for the product, then looking them over, comparing them and making our choices as to which ones we like best. Then we combined the kinds of elements we like from all of them, and created our own unique Advertising, hopefully better than any of the others.
Finally, we're almost finished.
· Find out what eBay Auctions have to say
eBay is the most price-driven marketplace around, so it's very important to our overall research to find out how
much eBay Sellers are getting for the products we're researching.
eBay Auction prices are not the determining factor in our decisions. Always remember that as a severely price-driven marketplace, eBay prices do not accurately reflect what a product should be sold for on a web site. You can earn more profit and sell more product on your own web site than you can on eBay. As part of our overall research, though, they do play a small part.
Now, we move to the last phase of the research process.
· Analyzing all that information!
The manual Analysis process is not easy, nor is it pretty! It involves spreadsheets and charts and graphs and links
and lots of time, cups of coffee, bleary eyes and late nights.
We have to look at all of the data we collected on Demand, Competition, General Interest and Advertising, and
make a decision as to how they all balance out.
Here are some of the issues to consider:
· Not enough Demand (as compared to Competition) means not enough people are going to buy.
· Too much Competition (as compared to Demand) means not enough of a profit to go around.
· Too much Advertising drives up the price of Pay Per Click ads, and increases Competition as well.
· Not enough General Interest, combined with a low Demand, means that there may not be a good market even if there is some Competition out there trying to make the sales.
Those are just some of the things we consider. Overall, we compare all the various Demand, Competition, Advertising and General Interest numbers against each other, and use our own unique formula to make sense of it all.
Once again, this EBook is not about product promotion. We give it away freely out of a genuine desire to help people build strong, successful Home-based Internet Businesses. However, this is a good place to tell you that our Product Sourcing Solution, the Directory of WBI CertifiedTM Wholesalers, automates that entire research process for you, and does it in seconds! Market Research is an integrated function of our Directory, and every time you search for a product supplier in the Directory, you get back a complete Instant Market Research Analysis as well!
Our Directory does in seconds what it used to take us hours, or even days, to do.
· It gives you an actual Analysis (from 0% to 100%) of that product's chances of success on the Internet.
· It connects to the Internet and automatically collects all the information I talked about above, in less than a minute. Demand, Competition, Advertising, General Interest, and eBay and Amazon pricing. Then, it uses our own unique formula (the one that I said we use ourselves, to make sense of all that data) and generates an instant Analysis.
· It not only tells you how much Demand there is for the product you want to sell; it tells you what key words you should use to market that product if you decide to do so.
· It not only tells you how much Competition you have; it tells you where your Competition is and how they're priced on eBay, so you can decide if the product is better marketed in an Internet Store, or an Auction. (Hint – your own Internet Store is almost always the answer!)
· It not only tells you who your competing Advertisers are, it gives you clickable links to their ads, so you can study and out-Advertise the other guys.
It also allows
you to export all your instantly generated research information to any
Spreadsheet program, print your research, recall all your past research on any
product, and more.
All instantly, every time you search on a product name in our Directory. Of course, at the same time, you get back all the information you need about which Wholesale Suppliers carry that product as well, and where you can get Instant Wholesale Buys of those products.
Now, remember what we say all throughout our web site and published information, folks. There is no magic bullet! The success of your business depends on many things, and proper research is just one of those things.
However, if you can take a process that you're not sure how to do properly, and have it done for you, the right way; you're greatly increasing your chances of success.
Along the same lines, if you can take a process that normally takes hours or days to do manually, and do it in minutes, you're gaining yourself a heckuva lot of time that can be used to concentrate on the rest of your business!
Again, this EBook is not meant to be a product commercial. It's just that I am honestly very excited about the amazing things we've built into our Directory. We now use it ourselves for all our product research.
So, if you like, you can try the manual research process that I described above.
Or, if you like, you can go to our web site, and take a Free Preview of our Directory of WBI CertifiedTM Wholesalers Here. We know it will save you a tremendous amount of time, while helping your business succeed.
Now, let's move on, and talk about Pricing those products that your research tells you will sell.