10 Product Evaluation Ideas For Dropshipping Products

Picking the right product is undoubtedly the most crucial component of building a wildly profitable eCommerce business. 

In this piece, Product Evaluation, we seek to point you to the ultimate guide for evaluating product ideas’ viability. 

The evaluation of market demand, existing competition, and the product’s viability is a critical first step in assuring you’ve landed a winner.

If you get this step wrong, you risk wasting your time and energy, or worse, investing a significant amount of money in inventory that you can not sell.

If you do it correctly, you’ll position yourself for sales and success.

We’ve cobbled up this comprehensive guide to show you exactly how to go “under the hood” of your market and product to make that you’re building a solid foundation for your business and determine whether you have a viable and profitable product idea.

Now, let’s get started.

Nota bene: In this post, you’ll demonstrate how to analyze various factors to determine the viability of your product idea. You’ll utilize a coconut oil hair care product that you selected as a case study.

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It is critical to keep in mind that no single element guarantees your product selection. Rather than that, it is an intricate combination of factors that will enable you to see the whole picture and make the best choice possible.

Read also 15 Product Research Ideas To Find Dropshipping Products 2021

Manufacture, Wholesale, Dropship, or Make your products.

Before you engage your evaluation drive, you must admit that there are several ways to develop a business around coconut oil for hair care products. The first step is to decide whether you will manufacture, wholesale, dropship, or make. Next, it would be best if you determined the business model to run.


Manufacturing would include cooperating with a manufacturer to create a coconut oil-based hair care product.

However, this approach makes little sense until you reach a point where you cannot meet demand independently, which is highly improbable given the relatively simple nature of the product you are producing.

In addition, due to the manufacturer’s minimum order manufacturers, which are likely in the thousands to tens of thousands of pieces, the cost of making a product like coconut oil would be substantially higher than if you were to make it yourselves.


Wholesale entails mass purchasing commercial and independent brand coconut oil hair care products and reselling them on your website.

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Typical resale margins are approximately 50%, which means that a $10 wholesale product would sell for roughly $20 retail. When purchasing wholesale, your pricing options are limited, as prices are often set by manufacturers and expected by the market.


You could dropship if you didn’t want to carry any inventory. If you worked with dropshipping partners, your profit margins would be much lower, typically about 20%.

As a result, you would incur no startup costs for your inventory. Rather than that, you’d offer the item on your website, and when a sale occurs, your dropshipping partner would bill us and ship the item on your behalf. Oberlo is a great place to start if you want to dropship.


It’s pretty simple to create a hair care product using coconut oil. On the internet, you can quickly locate recipes and ingredients for your personalized hair care product. You’d be lucky if your product does not require an intricate manufacturing process or rare ingredients.

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Making a product like coconut hair care would be relatively straightforward and inexpensive. Your margins will be reduced because you are purchasing in small quantities for your initial product, but as a new product and brand, you will have complete control over price and a decreased risk of inventory.

For this Product Evaluation, we selected to evaluate the viability of developing a business based on the manufacture of your own coconut oil hair conditioner product.

Bear in mind that if your initial pick does not meet all of the criteria listed below, you can always return and re-evaluate the other business models.

What criteria should you use to evaluate your product idea?

We’ll summarize each evaluation criterion below, and then you can apply them to your product idea. Several decisions are subjective, and your assessment of each criterion may vary slightly. For many of the issues, there will be no exact solutions, only educated guesses.

Each of these criteria is designed to aid you in gaining a better sense of your product selection as all the factors involved in developing a business around it.

You can leverage the questions below as a framework, substituting your product choice to grasp your product’s potential better and avoid potentially detrimental issues.

In general, the two-prong branch of the product idea evaluation criteria is:

  • Market-based
  • Product-based

Market-based criteria

You’ll begin by examining market-based criteria. These are typically externally visible criteria, such as market size, target customer, and whether you’re working with a popular (trending) product.

How large is the market, or how high is the demand?

Although estimating market size and demand might prove challenging, you’ll want to have a sense of potential market size and demand before investing significant time, money, or energy in your business. It may be as straightforward as using a site like Buzzsumo to see how many people are discussing your potential product regularly.

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Perhaps the mainstream tool is the Google Keyword Planner, which will assist you in determining how many people search for phrases (keywords) related to your product idea each month.

Evaluation: As you may have noticed in the last piece, the volume of searches for coconut oil hair products was staggering. Using Google’s Keyword Planner Tool, you determine approximately 73,000 monthly searches for coconut oil for hair and similar terms in the United States and Canada.

Additionally, you figure that Buzzsumo generated 150-250 Tweets every day mentioning your significant keywords.

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This information does not guarantee that your proposed products will find a market. Still, it shows that individuals will be interested in learning more if you develop a coconut oil for a hair product.

Is the product readily available to your potential buyers locally?

There is one fewer reason people search online for your product in Product Evaluation if it is readily available in their immediate neighborhood.

EvaluationSuppose you already figured that coconut oil is beneficial for regenerating hair, hydrating it, and preventing frizz.

Coconut oil is a readily available raw ingredient online and in stores; you discovered it at both your local GNC and grocery store. Commercial hair care products containing coconut oil, on the other hand, are more difficult to find online and virtually always require a special trip.

What is it, a fad, trend, static, or an expanding market?

It is just as critical to understanding the size and demand of your potential market as it is to understand the market’s direction.

The last thing you want is to put significant time, money, and effort into developing a product and creating a business only to make that you missed out and the market is fast plummeting.

According to Google Trends, search interest has risen considerably in recent years.

“Coconut Oil” interest over time, worldwide, 2004 current web search.

“Coconut Oil for Hair” interest over time, web search.

Despite the popularity (trend) of coconut oil, the beauty business is continuously undergoing substantial marketing adjustments highlighting and promoting new vital ingredients as “breakthroughs” to increase sales.

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However, it’s critical to bear in mind that one of these marketing changes could eventually monopolize coconut oil, resulting in a decline in demand.

To whom do you wish to sell your product?

Before making a final selection of a product, it is vital to get a sense of who your target customer is-Product Evaluation 101.

You don’t want to discover too late that all of the potential customers for your product live in an area where you cannot ship or sell it-i.e. kids without credit cards.

You might have used channels such as Quantcast and Alexa in the past to learn more about the demographics of your potential target market if there were some prominent users.

However, it’s tough in your case because there are so few significant competitors with websites to analyze. As previously said, the market for coconut oil hair care products has become quite fragmented.

You use Twitter to learn more about your potential target customers. And hypothetically, you know from your previous post, there are approximately 150-250 Tweets every day that contain the keyword “coconut oil for hair.

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” You examined who these individuals are that are discussing coconut oil for hair. The people discussing your product idea on Twitter were disproportionately female, as you anticipated based on your analysis. Based on credible profile images, you may estimate the average age between 18 and 35.

Additionally, you know the location of your target consumer based on Google Trends:

  • In the USA
  •  In Canada

Based on this information, you can easily reach your target customers, and you know that this demographic is not averse to spending money online in general.

Who’s your competition?

If you decide to start a business, the cornerstone of Product Evaluation dictates that it’s usually a good idea to familiarize yourself with your competitors.

The more information you have about your competitors prior to starting your business, the fewer surprises you will face later.

EvaluationAccording to research, the coconut oil hair product market is competitive in three categories, as described in your previous post:

  • Recipes for Homemade (DIY) Coconut Oil– Online, you can find a range of do-it-yourself coconut oil recipes. While all of the recipes start with coconut oil, they integrate a range of other ingredients to increase the completed product’s effects or alter its primary function/texture. For instance, hair conditioner vs. hair mask.
  • Pure Coconut Oil-Your research indicates that the primary component, pure coconut oil, does an excellent job of hydrating and repairing hair on its own. Pure coconut oil is readily available both online and in stores.
  • Commercial Coconut Oil Hair Products-These are products manufactured by large and small businesses that utilize a specific combination of ingredients to create a unique and more attractive finished product.

Instead of any apparent market leaders, you may discover a highly fragmented market of manufacturers and sellers for your coconut oil for hair products.

Product-based criteria

After examining your market-based criteria and gaining confidence in the market, direction, and target customers, it’s time to consider product-related considerations.

Product-based criteria are concerned with the product’s viability. These criteria may help you obtain a better understanding of your product’s strengths and weaknesses.

Is your product a passion project or a solution to a problem?

And as you’ve probably figured, products that address a pain point or satisfy a passion are far easier to find and acquire customers for than “nice-to-have” items.

Product EvaluationIt is reasonable to assert that your product assortment can benefit customers suffering from several conditions, including dry, brittle, and curly hair.

One may argue that it also serves a purpose of passion since women frequently go to considerable lengths to maintain healthy, beautiful hair.

Is your product subject to any restrictions or regulations?

Restriction and control are an inescapable part of many businesses and products. However, before investing time and money in your business, it is prudent to educate yourself on these.

Knowing these things in advance can assist you in planning. It will almost certainly save you time, energy, and money.

Product EvaluationApart from labeling requirements, there aren’t many regulations or restrictions applicable to your product that you’ve come across.

What are your product’s dimensions and weight?

Your product’s dimensions and weight can have a significant impact on its sales and profitability. If your product is large or heavy, expensive delivery can deter potential purchasers and squeeze your margins.

In addition, size and weight can be significant considerations in warehousing and storage.

Product Evaluation: While shipping coconut oil is not light, you do not anticipate your shipments to be particularly heavy, given the unit sizes at which you will likely sell your product.

The majority of shipping carriers consider the usual order to be a small box, and it should fall all under the weight limits for small deliveries.

Will you have to deal with seasonal changes?

Seasonality swings denote the fluctuations in purchasing behavior from year to year. Take Christmas trees, for instance, are highly seasonal, with nearly all of them bought between November and December.

Seasonality fluctuations are critical to be aware of because they can negatively influence cash flow and the overall viability of a business.

Product EvaluationTo determine whether seasonality swings would impact you, you used Google Trends to examine some of the most common words linked with your product idea.

You may see a slight rise in searches around January, which you assume is due to people looking for a solution to dry, frizzy hair caused by the cold.

Apart from that, seasonality does not appear to have a significant impact on your product selection.

Is your product consumable or disposable?

A consumable or disposable product is advantageous from a business perspective since it increases your chances of earning previous customers’ trust & repeat business.

In aggregate, consumable products can help you reduce marketing costs while boosting the average client’s lifetime value.

Product EvaluationAs a hair care product, your product falls squarely into the consumable category.

Is the product you’re selling perishable?

If you’re having difficulty identifying your market and generating sales, choosing a perishable product can be a recipe for disaster.

Product EvaluationCoconut oil, like some of the other ingredients you evaluate for your product-other oils and extracts, has a shelf life of three years or so. It thus affords us more than enough time to sell product and give customers ample time to use it.

What is your expected profit margin?

The amount added to the cost of a product is referred to as a markup. This sum will cover your overhead and provide a profit for you. When analyzing possible markups, keep in mind how your markup may alter as your business grows.

For instance, if you were to make your own coconut oil hair care products, you would most likely start with a small Quantity of essential ingredients.

On the other hand, as you grow and your purchasing volume increases, your ingredient costs are reduced. Similarly, if your order quantity increases, your price reduces.

You know that you can safely sell a premium coconut oil-based hair care product, say between $7 and $25 per 120ml, based on your analysis of the likely selling price.

You discovered that one gallon of fresh coconut oil costs $80.00-3,785 milliliters. Additionally, you were able to obtain a selection of various essential oils and extracts that have a demonstrated track record of treating damaged hair for a low price of, say, $10 for 60ml.

If you believe your product will be primarily coconut oil with a few other oils and extracts, your total cost will be $110 for 3,965ml (3,785ml + 60ml + 60ml + 60ml).

You divide this by 120ml, the size of our final product, and get a total of 33 units. By dividing your total cost ($110) by your total units (33), you arrive at a price per unit of $3.33.

When a 120ml jar costs approximately $2.00 and a label costs $0.50, your total price per unit is $5.83. Of course, this would be a concern if you sold your product for less than $13, but you can enjoy a healthy price margin if you sell it for between $13 and $20.

How much are you willing to sell for?

The lower the price, the less profit can be produced per unit. This results in more significant marketing expenditures to acquire new customers.

Numerous renowned eCommerce entrepreneurs think that products priced between $47 and $125 fall into a lucrative spot where you can earn a reasonable profit per unit while not charging so much that customers are afraid to purchase online or expect premium features such as phone assistance.

Product Evaluation: Suppose around a half-dozen coconut oil and coconut oil hair care products from various manufacturers were reviewed.

You estimated that you could charge between $7 and $25 per 120ml unit based on the usual cost per milliliter.

Due to the low price point, you will have razor-thin margins, making paid advertising channels challenging to make, particularly when you first start.

How many SKUs will you require?

In general, a greater number of SKU-product variants or styles equals greater complexity. This is frequently a problem when it comes to things like sizes and colors.

For example, if you want to sell jeans online, you’ll need a variety of different sizes for each style. This increases your inventory and storage costs, as all as the possibility of delivery errors.

Product Evaluation: Your product offering would almost certainly begin with a single or a few SKUs. You could probably get away with a dozen or so carefully chosen coconut oil products or a few homemade ones.

Is it possible to get a subscription?

While it is not necessary to build a successful online business, the ability to offer a subscription service for your product is highly desirable because it increases your lifetime customer value, allows you to spend more on client acquisition, and reduces the number of customers required to succeed.

Product Evaluation: Customers are unlikely to subscribe to a hair care product because this type of product is unlikely to be used consistently but rather as needed.

Is your product long-durable?

Generally, a long-lasting product is better. Your product’s robustness will help you save on overall shipping costs and prevent costly breakage during delivery.

Product EvaluationThe majority of coconut oil products for hair treatment are available in glass or plastic containers. This makes them highly durable, but you must factor in additional transportation costs to adequately and appropriately convey them and avoid breakage if you intend to use glass containers.

The key takeaways 

After examining and weighing all market and product criteria, you’re reasonably confident in your product idea and potential market.

The low entry cost, high search demand, trend trajectory, and low competition keywords for which you anticipate you may rank all in Google over time are just a few of the elements that stand out to us.

You do have a few reservations, though, which prevent this from being a slam dunk. Two of the most pressing issues are a low product price point and a competitive landscape.

A significant portion of your product idea’s potential success will be based on your ability to make a product that is superior to coconut oil on its own, build a brand around it, and rank highly for the keyword opportunities you identify.

How do you feel about the subject? How confident or skeptical are you in your product selection based on the criteria mentioned above? Hit us up in the comments below.