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Thread: Testing Market

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    SitePoint Wizard webcosmo's Avatar
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    Testing Market

    Lets say I have some products(brand name products) I can get with very good price. I can easily build a site, but before I go all out I want to test if I really can make any money from them.

    I am thinking of making some test sales on ebay or so.

    What would be the best approach for this, other then ebay?
    My target market is USA, Canada only.

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    SitePoint Wizard silver trophy
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    Take a page from the Lean Startup...

    Build a good looking, but basic one page site with a product. This is your minimal viable product, your test.

    Next pop open an AdWords campaign and bring in some traffic. See how many click your buy now link. Factor down for cart abandonment, cut out your COG and marketing and see where you're at. If you like you can throw in PayPal or such to build a simple store and get a actually accurate read.

    You don't even have to sell the product to get a read [simply direct people elsewhere or tell them you're out of stock]. This can be extended to test multiple products, different designs, price points, etc.

    Of course this is a simplified explanation. Get the book, it's worth it...
    - Ted S

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    SitePoint Wizard webcosmo's Avatar
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    @Ted The niche I am on, will kill me with adwords click rates. On average it costs $5+. I am not even thinking of it at the early stages.

    The products I intend to sell are high end brand name products. They got decent demand in physical stores. I am not sure of online.

    My goal is to pick a few of those products and see if I can make any sale at all; without spending much money. Lets say per product(say $100 each) I can spend a max 10% on this. The question is where to start.

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    Quote Originally Posted by webcosmo View Post
    @Ted The niche I am on, will kill me with adwords click rates. On average it costs $5+. I am not even thinking of it at the early stages.

    The products I intend to sell are high end brand name products. They got decent demand in physical stores. I am not sure of online.
    High luxury goods on marketplaces means competing heads up with counterfeits -- it's not a war you want to be in. [That should also be a big red flag about where you buy inventory from]

    The goal of a test shouldn't be to actually make money, it should be to establish if you can and for that direct response channels are easiest so whether you want to try marketplaces, search ads, social ads, it's all likely to run similarly so it's a matter of what seems to have less competition and you're comfortable with. My starting point is always to step out of the price markets [i.e. eBay] and find your way into one with value [i.e. your own site with programs beyond products] -- it's a harder start but scalable and means more profit.
    - Ted S

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    SitePoint Wizard ShayneTilley's Avatar
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    I've built plenty of sites that have existed purely to validate a users interest. I typically create and run them under a domain I'll through away, as there is not substance to the site, and I don't want to carry any negative brand sentiment. We did a very interesting experiment with learnable in the early days. In these sites we're testing everything - price, copy, design, navigation as well as cost of acquisition.

    If your CPC is too high on Adwords, take a look at Facebook perhaps, then Yahoo... Alternatively, if the brands of value, partner up with a blogger (in the niche and with an audience) get them to test the waters to their audience in exchange for some goods (or even some equity).

    I have gone the eBay route too so some products. Whilst you will fight with counterfeits, if your stuff is the real deal, you should be able to provide proof points to differentiate yourself. I've always gone back and spoken with an eBay buyer to seek more information on who they are and where they hangout as a potential source of new channels.

    If you've got a great price on a genuine product of value, worst thing you could do is nothing.
    Shayne Tilley

    My slightly left of center thoughts on
    marketing, business and life in general.

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    SitePoint Wizard webcosmo's Avatar
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    Quote Originally Posted by Ted S View Post
    High luxury goods on marketplaces means competing heads up with counterfeits -- it's not a war you want to be in. [That should also be a big red flag about where you buy inventory from]

    The goal of a test shouldn't be to actually make money, it should be to establish if you can and for that direct response channels are easiest so whether you want to try marketplaces, search ads, social ads, it's all likely to run similarly so it's a matter of what seems to have less competition and you're comfortable with. My starting point is always to step out of the price markets [i.e. eBay] and find your way into one with value [i.e. your own site with programs beyond products] -- it's a harder start but scalable and means more profit.
    These products are genuine. I would be buying out of season products at a much discounted price from a local retailer. In some cases we could establish accounts directly with the company, but that's a far thought for now.

    I did take a look at ebay, apparently I cant beat their price. The prices there cant be real, because they seem to be selling for way less then a retailer's purchase price.

    I know website is the best option in the long run. But since we have to physically store the products we can't sit on them for long, we need to sell them asap.

    I guess I have to do some more research on this.

    Thought somebody might have had some experience on this to share.

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    Quote Originally Posted by webcosmo View Post
    These products are genuine. I would be buying out of season products at a much discounted price from a local retailer. In some cases we could establish accounts directly with the company, but that's a far thought for now.

    I did take a look at ebay, apparently I cant beat their price. The prices there cant be real, because they seem to be selling for way less then a retailer's purchase price.

    I know website is the best option in the long run. But since we have to physically store the products we can't sit on them for long, we need to sell them asap.

    I guess I have to do some more research on this.

    Thought somebody might have had some experience on this to share.
    Don't get too discouraged about the Ebay competition..perhaps try to find out more about them - maybe you can gain some interesting insights about how they supply it for so cheap. If this product is mainly being sold offline and you have the initial validation of Ebay, I would suggest building a basic sales page (Wordpress etc) and checkout system (paypal or so) for one product, and reaching out to your potential customers. Since you don't want to spend money on Adwords/FB you can potentially do the legwork yourself to drive traffic like going to related forums and FB groups and tell people about it (not in a spammy way). From their reaction you could find out if the demand is poor, average, or really strong.

    Like Ted S mentioned, the idea here is to see the market demand and reaction to the product - not making money. Its better to spend $400 buying traffic and assessing demand than building a $5,000 website to find out there is no demand.

    goodluck,

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    Unfortunately, if the PPC ads are going for $5 per click the SEO competition is likely going to be very fierce. So you either need to:

    1) Have a fantastic way to market yourself (apart from lowest price)
    2) Be able to make money with the inflated advertising prices

    Like Ted said above, the point early on isn't to make money - it's to determine if the niche is viable so you don't waste time and money building a business doomed to failure. To do it right, you'll need to invest some money to that end.

    For the next eCommerce idea I want to test, I'll be using Shopify to throw up a basic eCommerce storefront in a few hours using a default theme, and listing only the top 5 to 10 products in a niche. Since I won't be investing in a great site, I'll be keeping prices really low as my value proposition early on. With PPC, you should be able to get a good idea of how much traction the niche would get with more products, better descriptions and a custom design.

    Best of luck!

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    Quote Originally Posted by webcosmo View Post
    These products are genuine. I would be buying out of season products at a much discounted price from a local retailer. In some cases we could establish accounts directly with the company, but that's a far thought for now.

    I did take a look at ebay, apparently I cant beat their price. The prices there cant be real, because they seem to be selling for way less then a retailer's purchase price.

    I know website is the best option in the long run. But since we have to physically store the products we can't sit on them for long, we need to sell them asap.

    I guess I have to do some more research on this.

    Thought somebody might have had some experience on this to share.
    Sounds very similar to a situation I've looked at. Does the manufacturer have MAP pricing enforced? Often this is why most people can't compete on ebay, because they don't do a good job enforcing MAP pricing.

    Assuming that's irrelevant for your situation, people may be selling refurbished products.(this was the case in a product we are selling) Therefore, there's no guarantee on the product through the manufacturer, and some people are okay with that and willing to pay a bit less to get the product this way.

    If you're just buying an already established product/brand out of season, just make sure you know the pricing when it's in season, and if you'll be able to sell it at the same price when it's in season again.(make sure there's no new model coming out, etc...)

    ebay/amazon are fine for tests, but in both those channels you're competing on price. If you're buying discounted out of season stuff, that's really all you're going to be competing on anyways since it's not a unique product from anything else.

    Since it sounds like you need to sell them asap, but you're saying you can't compete on price, I'm not sure what you're looking for- unless you're looking to sell them to local businesses who might only need a couple, but that seems like more hassle than it's worth.


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