Intrigued by the prospect of launching own business but unsure of where to start? This free, detailed handbook on Product research: A Checklist to Finding Profitable Product ideas teaches you how to find outstanding, new trendy products with a high potential for sales.
After deciding on a product and niche to evaluate and assess further, it’s time you subject them to scrutiny. Without conducting a thorough evaluation of your product and niche idea, your selections will be arbitrary—and your chances of success will suffer as a result.
By applying the evaluation criteria enumerated herein, you’ll gain a far more profound understanding of your product and niche, as well as a more excellent grasp of its strengths and the capacity to recognize its weaknesses.
There is a good chance that you will never find a product or niche market that meets all of the criteria laid bear below. However, comparing your idea to this list can provide you with a better grasp of your selected product/niche, allowing you to avoid common traps and increasing your overall chances of succeeding.
Synopsis
- What’s product research?
- How to conduct product research?
- Pointers to effective product research
- Find the next bestselling product
- Product research FAQs
What’s product research?
Product research is the process of validating a product idea and determining whether it will succeed or fail. It is a stage in the product development process that helps determine what customers want and the market viability of your idea. As such, your product will provide a higher return on investment.
Product research addresses a range of issues, including the following:
- How should the product be developed and distributed?
- Which products on the market are comparable?
- Is your product going to be a market success?
Businesses that conduct routine product research keep one step ahead of the competition. It also helps in the trend of new, high-value products since you’ll always be aware of what’s hot and whether those trends will last.
How to conduct product research for products
Before delving full-throttle into this checklist for Finding Profitable, in-Demand Product Ideas, let’s take a brief look at the broader set of criteria we’ll be discussing:
- Market-based criteria
- Product-based criteria
Market-based criteria
Under this criterion, we’ll look at:
- Market size appraisal
- Conduct a market analysis
- Determine product category outlook
- Is your product readily available locally?
- Identify your target audience.
Product-based criteria
The product-based criterion highlights the following evaluation points:
- What is your profit margin?
- What’s your contemplated selling price?
- What are the product size & weight?
- How long will the product last?
- Is the product subject to seasonal swings?
- Does the product cater to passion, pain points, or a solution to a problem?
- How routinely would you restock your inventory?
- Do you deal with disposable or consumable?
- Is the product you deal with perishable?
- Is the product subject to any restrictions or regulations?
- Can you scale the product?
Now, consider the following details about each of the criteria:
Market size appraisal
So, how big is the prospective market?
While determining market size can be challenging, you can probably get a good idea with some educated guesswork. For instance, a product targeting pregnant ladies between the ages of 25 and 40 is likely to have a sizable market. However, a product focusing on pregnant females aged 25 to 40 who enjoy punk rock music will almost certainly be too tight of a niche.
Take an entrepreneur who, for instance, deals with premium, luxurious toothpicks. As you would imagine, buying fine toothpicks requires a quite discerning and elegant gentleman.
A product of this nature is almost certainly only available in a small market. Its small market size limits this business’s revenue potential.
However, depending on the specific market, a smaller market size may make the market simpler, allowing businesses to penetrate and capture the market more cost-efficiently.
Although determining precise market numbers is typically hard for most businesses, there are specific approaches to gain a more broad understanding of market size.
Google Trends is an excellent place to start—not for determining market size but for determining the trajectory of market demand.
Additionally, you can search for your specific product idea that is being sold elsewhere and look at the quantity and quality of client evaluations. Is there none, a few, or hundreds of reviews?
This might provide you with an estimate of the idea of people searching for your keyword terms and, in return, a better notion of the market’s size.
Combine all of these methods with some sound judgment, and you should have a solid idea of the market size for your product idea.
Conduct a market analysis
How would you characterize the market competitiveness?
In other words, how competitive is your chosen product and niche? Are you the pioneer in your market? Is there already a small number of competitors, or is the market saturated with individuals providing the same product or targeting the same niche?
If you’re a first-to-market company, you’ll want to conduct extensive market research to ensure that there is, in fact, a market for your product.
If a market has a large number of competitors, it indicates the market has been verified. However, you’ll almost certainly need to figure out how to differentiate your brand and items from the sea of competitors to carve out a niche for yourself.
Google and SimilarWeb searches can assist you in identifying current market participants. At the same time, an SEO tool such as Ahrefs can provide you with an estimate of search volume for your chosen keywords.
Conducting keyword research using Ahrefs or Semrush helps you obtain an accurate search-demand picture. Additionally, it helps with opportunity mapping: when the difficulty level is high, You can look for longer-tail results. The long-tail strategy is optimal for market entry.
Moreover, the keyword research tools will indicate the keyword’s competitiveness and how many other individuals/businesses are bidding on that term.
Determine product category outlook
Here, you’re assessing whether you’re dealing with a fad or a trend, a stagnating or expanding market?
Getting caught up in a fad can be risky. A trend has the potential to be highly profitable. Stable markets are secure, while those that are rising are optimal. Recognizing your product’s and niche’s location can make all the difference in success or failure.
To help you better understand the distinctions between these types, let’s examine the growth curves and then look at realistic instances of each:
Fad
A fad, as it were, makes for stuff that gains popularity for a brief period and then swiftly fades away. While following a trend might be profitable if your entrance and exit are ideally timed, this can be impossible to foresee. Therefore, landing a bull’s eye “prediction” is elusive, & attempts at securing such often prove disastrous.
For instance, take the Geiger counter, a small electrical gadget approximately the size of a cellphone used to determine the quantity of radiation in the environment.
Geiger’s counter flew off the shelves shortly after Japan was devastated by an earthquake in 2011. However, as the Google Trends graph indicates, interest waned almost as quickly as it began.
Trend
A trend is the apparent long-term direction in which a product’s market appears to be heading. It grows slower than a fad, lasts longer, and often declines more slowly. Although this can be difficult to forecast, trending products can occasionally develop into long-term growth markets.
Gluten-free foods, for example, have increased in popularity during the previous decade. While the data indicates a steady upward trend, this is more likely to be forecasted and labeled as a trend than a growing market, owing to the ever-changing and developing nutrition market.
Robust
A stable market is relatively unaffected by shocks and bumps. It is neither declining nor expanding but rather maintains itself throughout time.
A kitchen sink makes for an excellent illustration of a product whose market has been relatively stable and flat for decades. There are unlikely to be any significant increases or dips in kitchen sink interest or purchasing behavior.
Growing
A rising market has experienced sustained expansion and is exhibiting symptoms of a long-term or permanent market shift.
Yoga has existed for an extended period but has only recently become a mainstream health and fitness exercise in the last decade or so. Yoga’s benefits are well-established, making this a strongly developing market.
Google Trends can assist in determining whether a market is a fad, trend, expanding, or steady. If you notice unexplained spikes, conduct additional research to determine the cause.
Is your product readily available locally?
Can your product be readily sourced locally?
If your product can readily source locally, that eliminates the motivation for buyers to look for it online. However, a unique or difficult-to-find product that isn’t available locally enhances the likelihood that someone will search for it online and will likely purchase it.
There are businesses like Ellusionist, for instance, that deal with artist collaborations in the form of high-end decks of cards aimed at magicians and card players alike.
While you may get a deck of cards anywhere, these are not ordinary cards; they are works of art and trick decks accessible exclusively online.
One of the simplest ways to find whether your desired product is accessible locally is to conduct a Google search for your product + the name of your city, or if you do not reside in a big city, substitute the name of the nearest large city. You may, for instance, type “blackjack deck of cards + new york” into a search engine.
Identify your target audience.
Who’s your target demographic? At this point, you do not need to go into great length defining your particular consumer profile; however, you should be aware of the type of consumer you are likely to sell to and their online purchasing capabilities.
If you’re selling a product aimed at teens, keep in mind that the majority of teens do not have a credit card with which to make online purchases.
Similarly, if your product is aimed at elderly baby boomers, you may find that your target group is less tech-savvy and dislikes shopping online.
You can learn more about your target customers by logging into your Google Analytics account. Seasoned entrepreneurs hold that when conducting product research, you want to “look closely” at the following Google Analytics reports:
Demographics insight the audience, as this is critical for knowing age ranges, male vs. female demographics, and how the current product appeals to that demographic.
Geolocation, because understanding what viewers are doing in a particular location can aid in the formation of insights. For example, residents in Melbourne do not require a lawnmower as frequently as people in Perth, owing to Melbourne’s higher proportion of people living in apartment complexes and Perth’s greater urban sprawl.
Top pages, which provide an excellent barometer of how many individuals are browsing products. You’ll come across reports in which the top product gets described as exceeding every other product by a factor of ten, only to discover that the tenfold performance was based on hundreds of visits, not thousands. The way the data was presented gave the impression that it was a higher performer than on a scale.
Read Also:
- 7 Facebook Advertising Mistakes To Avoid In 2021
- How To Drive Free Traffic To Your Shopify Store In 2021
- Getting Stripe For Non Us Citizens Vs UK Stripe Account 2021
- Exclusive Facebook Ads To Increasing Your Conversion (2021)
- Discover Top 7 Websites To Make $100 Per Day In 2021
What is your profit margin?
You must set a profit margin.
Before delving too deeply into a product idea, analyzing the markup for that product is critical. When you first start selling online, you’ll quickly find many minor fees that eat into your margins. However, having a significant initial markup provides the required cushion to absorb these small costs.
To gain a better understanding of margins, let’s examine a real-world product. In this example, we’ll utilize a pet pedometer—a tiny electronic device that attaches to a dog’s collar and counts their steps.
Based on our research of existing pet pedometers, we concluded that the average retail price for this type of product would be $24.99. We discovered that we could obtain these pet pedometers for $2 per unit from Alibaba.
A 1,200 percent increase in price! So far, so good, correct? Consider the following additional fees that will need to be considered:
As illustrated above, the small costs will eat away at your margins. In this scenario, a product that started with a markup of more than 1,200 percent ends with less than 100 percent markup.
These are, of course, estimates, and you can significantly reduce costs by doing fulfillment in-house and spending less on advertising. Regardless, knowing this knowledge in advance will be critical.
What’s your contemplated selling price?
Decide the pricing strategy. Selling a low-cost product requires you to move a large number of units to make a reasonable profit. Furthermore, increasing unit movement units leads to an increase in customer service inquiries and other operational indicators. On the other hand, selling high-priced products results in a lengthier sales cycle and more selective customers.
Generally, a product price point of $75 to $150 is advised. This eliminates the requirement to find many customers to earn a reasonable profit while providing some cushion for marketing and operation costs.
Our previous example, the pet pedometer, sold for a reasonable $25; thus, variable costs ate up a large portion of the profit, resulting in a profit per unit of only $12.95.
However, let us examine what happens if we substitute a new product for the pet pedometer and assume that the new product has a possible selling price of $100. (4x more than the pet pedometer). We’ve also multiplied the other suitable costs by a factor of four for uniformity.
Due to the higher price point, we achieved significantly greater margins—73 percent vs. 42 percent—for the pet pedometer, and our profit per unit jumped from $12.95 to $76.75.
What are the product size & weight?
Define the product’s size & weight because the size and weight of your products can have a significant impact on your sales and products.
Nowadays, many customers anticipate free shipping, and just adding the cost of shipping to your prices is not always practical.
This means that these costs tend to eat into your profit margins. If you choose to pass on shipping costs to the customer, the shock of costly shipping will almost certainly decrease your conversion rate.
Additionally, if you do not plan to employ the dropshipping model, you must include in the cost of shipping the products from the producer to yourself (or your warehouse), as well as storage fees. If you’re ordering inventory from another country, you may be startled at the costs.
For instance, a well-known yoga mat firm sells large workout mats. The price of the product is a modest $99. However, shipping to Canada is $40 and to the rest of the world is $100. For many consumers, it would be difficult to justify paying an additional 40% to 100% for shipping.
How long will the product last?
Is your product long-lasting? How robust or delicate is your product? Fragile products might be a recipe for disaster. Easy-to-break products will cost you more in packaging and are sure to generate more returns and exchanges.
Is the product subject to seasonal swings?
So what if the product you deal with is seasonal? Businesses that have seasonal demand may experience irregular cash flow. While some seasonality is acceptable, an ideal product will provide cash flow on a fairly consistent basis throughout the year.
If you choose a highly seasonal product, you may want to investigate ways to overcome seasonality in advance, such as marketing to new nations during the off-season.
Seasonal trends can be discovered by searching Google Trends for your product and niche keywords.
Does the product cater to passion, pain points, or a solution to a problem?
If your product serves a passion, alleviates pain, or solves a problem, I got news for you. Earlier in this article, we mentioned this idea, but selling products that fulfill a passion or address a need is always advantageous.
Additionally, when you sell products that meet one of these criteria, your marketing costs are typically reduced, as customers are actively seeking a solution, rather than you having to push your product to find them intensively.
How routinely would you restock your inventory?
Like how much revenue will your product generate? It can be dangerous to have products that require continual replacement or refreshment. These products run the danger of not selling before the time of the fiscal year.
Before diving in headfirst and selling a product with a high turnover rate, it’s critical to understand and plan for your turnover timetable.
For instance, the market for smartphone and tablet cases is booming. However, developing new designs typically demands a significant upfront expenditure in design, prototype, and minimum order quantities.
One of the most difficult aspects of growing an internet business in a niche like smartphone cases is gaining enough traction and exposure before releasing the next model smartphone/tablet.
Failure to sell through your inventory quickly enough may result in a stockpile of obsolete cases.
Do you deal with disposable or consumable?
The focus here is whether your product a resale item or a consumable.
By imposing a time limit on the product’s life and providing an incentive for the customer to return to you for replenishment, having consumable or disposable products makes selling to the same customer again more natural.
Harry’s, for example, sells highly consumable products such as razors, shaving cream, and deodorant. This concept encourages buyers to return to their website and make additional purchases.
Is the product you deal with perishable?
Perishability is nonetheless a consideration because perishable products are inherently risky for any business, much less an online business.
Shipping can prove costly for highly perishable products that require prompt delivery. Even products with a longer shelf life can be risky since they complicate storage and inventory management, potentially leaving you with rotten products.
Food products, vitamins, medicines, and anything else requiring refrigeration or a short expiration date require special care when ordering inventory and shipping to customers.
Is the product subject to any restrictions or regulations?
Restrictions and regulations imposed on your product and specialty selection are vexing at best and debilitating at worst.
Before you proceed with your product idea, you should ensure that it is not subject to any regulations or restrictions. At a minimum, you’ll want to make that they’re manageable.
Certain chemical products, food products, and cosmetics may be subject to restrictions not only in the country into which they are imported but also in the nations to which they are exported.
Consider making a few phone calls to the customs and border services of the country into which your product will be imported, as well as your warehouse, if you intend to utilize one, and the Food and Drug Administration, if your product is a food or supplement.
What’s the product’s scalability scope?
The point here is, can you scale your product? While it’s challenging to foresee the future and develop your business while you’re still in the startup phase, scalability should be considered and embedded into the business model from the beginning.
If your product is handmade or contains hard-to-find materials, consider how you will scale it up if your business succeeds. Are you in a position to outsource manufacturing? Will your workforce have to expand in proportion to the volume of orders, or will you be able to maintain a small team?
Pointers to conducting effective product research
Whether you’re researching your first or 100th product, bear the following tips in mind when conducting product research:
- Actively monitor publications on consumer trends.
- Examine B2B wholesale marketplaces
- Explore social curation websites
- Locate Amazon’s bestsellers
- Explore niche forums
- ·Speak to your customers
Actively monitor publications on consumer trends.
Consumer trend publications could introduce you to new products and businesses you were unaware of. Additionally, they assist you in keeping abreast of industry trends, thus maintaining a competitive edge and spotting new product opportunities.
Trend Hunter is a free platform worth following. With over 200,000 members, Trend Hunter is the world’s largest trend community. This website features trends in various categories, including beauty, fashion, culture, and luxury.
As an example, suppose you see a trend such as “empowering pandemic emojis.”
This might be developed into a commercial opportunity by creating a line of garments or accessories based on these designs.
PSFK is another trending platform worth investigating. It’s a subscription-based website that publishes studies and analyses on retail and customer experience trends.
Consider the case of Inkkas. The brand capitalized on the trend for wearing Peruvian textiles by establishing a shoe line. Inkkas collaborates with Peruvian artisan shoemakers to create the designs, which are then sold online through a Shopify store.
Appraise B2B wholesale marketplaces
B2B wholesale marketplaces are a treasure trove of innovative product ideas directly from the source. These sites will introduce you to thousands of product ideas that you can sell. If you discover anything you like, you can immediately purchase it.
You’ll want to check with Alibaba and AliExpress, which are marketplaces that connect you to Asian manufacturers. They have access to hundreds of thousands of products. Almost anything is obtainable.
The challenge is to look at multiple marketplaces to determine what is trendy and cross-reference it with Alibaba to determine if you can spin it unusually.
Alibaba is a platform for business-to-business transactions. Therefore, if you’re looking to purchase huge quantities of a product straight from manufacturers, you should use Alibaba.
On the other hand, AliExpress is open to anyone. If you’re interested in testing a product, you can place a small batch order through AliExpress.
Oberlo is another resource for product research for Dropshipping. This product sourcing tool allows you to check to trend dropshipping products based on AliExpress data.
Oberlo identifies which products have a high volume of sales and have a low volume of sales and the date of those sales.
Similarly, you can explore the following B2B marketplaces:
- Wholesale Central
- Made-in-China
- Global Sources
- Handshake
- Tradekey
Explore social curation sites.
Sites dedicated to image curation can be a goldmine of product ideas. Simply by tracking likes and trending photos, you may gauge market demand for a particular product or niche.
Several sites worth visiting include the following:
- Wanelo is a digital shopping mall where users may find and purchase over 12 million products.
- Fancy, for one-of-a-kind collections ranging from home decor to art to apparel.
- We Heart It is a product for discovering new fashion and beauty products.
- Pinterest, the world’s largest visual search engine and curation site
- Dudepins, for men’s product discovery and purchasing
Explore Amazon’s bestsellers list
Amazon is one of the world’s largest marketplaces for consumers. You will undoubtedly find dozens of product ideas the moment you arrive on the site. However, if you don’t have a strategy, it’s simple to get lost in the sea of products and advertisements.
To expedite the procedure, navigate directly to the Amazon bestsellers list. Profitable products are available in a wide variety of categories, from toys and games to patio, lawn, and garden.
All products on the list are updated hourly and are based on sales. As a result, your firm will never be short of product ideas.
If you’re looking for more extensive information about Amazon products, you can utilize a product research tool such as Jungle Scout.
You may simply search for any product using the brand’s product database, a searchable library of close to 480 million Amazon products. Or, using its Chrome extension, quickly evaluate product ideas.
All of these data can help you come up with winning products, regardless of whether you’re an Amazon seller or run your own online business.
Additionally, you’d need to consider the following aspects when conducting Amazon product research:
- The available product combos
- Reviews of product listings
- Variations on a product
- Who spends on ads?
Explore niche forums
Another method of discovering new products to sell is through industry and niche formats. Additionally, they provide an excellent opportunity to engage with prospective customers over shared experiences and discuss pertinent themes.
Certain niches, such as gaming, have thriving online communities. For instance, if you want to conduct product research, you could visit GameFAQs or NeoGAF to monitor video game discussion forums.
Additionally, there is Reddit, which is the mother of all forums. Reddit has communities devoted to virtually every subject, including culture, technology, and the environment. There are currently 2.3 million give or take subreddits, also known as communities, where users congregate to discuss various topics connected to the community’s title.
Additionally, if you are unable to locate any forums related to your niche, try browsing Google. Enter your niche and forum into the search field to see what comes up.
Speak to your customers
Whether you have four or seven hundred customers, one of the most effective ways to generate product ideas is to solicit feedback from them. You can send an email to your consumer base to solicit feedback on a few product concepts you’re considering.
And there are entrepreneurs to learn from; individuals or businesses employing strategies to enhance their current product range.
And one strategy that you can leverage can be through experience with your business. You’d learn that providing customer service has benefits for your business in terms of generating product ideas.
You can, for instance, email the customer after each order to inquire about their experience with the order, delivery, and product. If a select few respond and provide feedback, you then solicit their feedback for your product’s version 2.
Regardless of who sends these emails, you can still collect feedback and utilize it to inform your product development process.
Find the next bestselling product.
Selecting the proper product and niche is critical to the success of your eCommerce business and one of the most critical decisions you will make.
Using the criteria outlined above as a guideline might help you identify low-competition, high-demand products that are likely to succeed.
Product research FAQs
How can I conduct market research for a product I intend to sell?
- Continually monitor consumer trend publications
- Discover Amazon’s best sellers.
- Explore social curation websites.
- Appraise B2B wholesale marketplaces
- Consult niche forums
- Speak to your customers
Is there a difference between product & market research?
The primary distinction is that product research is concerned with determining the likelihood of a product’s success in a particular market. In contrast, market research is concerned with determining the customer’s wants and preferences and comprehending the competitive landscape.
What is a perfect example of product research?
A product research example would involve locating a hot item in a publication such as Trend Hunter and determining through an evaluation whether it is a viable product to sell.
Once validated, you can proceed to the product development phase, where you can create an early version and iron out any supply chain concerns.
How do I conduct a product research project?
- Assess the market’s size
- Evaluate the market’s competitiveness
- Discern the product category
- Define the target audience
- Decide profit margins
If you have a different approach to verifying a product idea that has worked effectively for you in the past, drop your views in the comments section.
Small Request
Did you enjoy this post? Kindly share it with your friends. Especially, the ones you believe really need this information.
Sharing this information with others can make a huge difference. You may ask why?
Well, the truth is, my main aim is to provide the best information pertaining to drop shipping for both beginners and experienced dropshippers.
And I plan to continue doing so for as long as I can.
I would also like to thank those who support the work I do through reading my content and sharing.
Trust me, when you take your time and share it will help a lot not only for me, but also other people who may really be in need of this information.
Here are some great suggestions:
- Pin it
- Share it on another blog
- Share on Facebook (Share it with friends and even on Facebook groups)
- Tweet it
- Stumble it
This will only take a few seconds of your time and I would really appreciate.
I appreciate you a lot. Thank you!
Join my Shopify dropshipping group mastermind and follow my blog to learn more about Shopify tips, dropshipping guides, dropshipping tricks and checklists, and e-commerce in general.
If you enjoyed and learned something from this post, you can get updates from me, free of charge!
I send out email newsletters about new posts published on the blog, tips, and tricks to help you grow your dropshipping business, as well as new YouTube videos to give you more insights about the e-commerce market, and much more.
Click The Image To Join My Facebook Mastermind Group
