I recently did a Reddit AMA on dropshipping eCommerce, and the most frequently asked question was “What should I sell online?”
So I decided to write a guide on how to choose the products to sell in you store. And, I mean literally to sell, not to just have in your store.
You can import dozens of products into your store in minutes, but the tricky part is knowing which products you should use in your marketing campaigns, feature on the front page of your store, and include in your promotional emails.
These main products that you are going to focus on are called ‘Alpha Products’. These are the products that bring the traffic to your store. After you know the Alpha Products, it takes no time to fill in the rest of the store with cross-sell, upsell, and related products.
I have structured this article into two to parts: Generating Product Ideas and Filtering Products.
My goal is to provide a roadmap for brainstorming product ideas and then filtering out the ones that aren’t worth testing.
This article will be useful for all eCommerce start-ups, small businesses, and medium businesses looking for new product ideas.
Generating Product Ideas
You never start with a blank page. Your head is already full of good ideas: your hobbies, products you like, trends, exciting products that you have heard of.
Write everything down that comes to mind. It doesn’t matter if you think the product will be a best seller or not. Trust me — write it down.
Browse Other Shops
Back in the 1980’s, Sam Walton was arrested for crawling around stores on his hands and knees. He later told a friend he was measuring the spaces between product shelves to determine how they displayed their products.
At the time, Walmart was making $400M+ in sales, but Walton knew that there was more he could learn.
When you browse other stores, look at their offerings, best selling lists, and promoted products. Many stores have a tremendous amount of data and employ entire departments to organize their sales and pick their products. Use that information to your benefit.
Browse a lot. Browse frequently.
Here is a link list that is worth spending time researching:
Add to your list any ideas from these sites that seem interesting.
There are over 100 million products on Polyvore and 30 million on Wanelo. Add in Fancy and Pinterest, and you now have an infinite number of products from around the world that can be sorted by popularity, trends, categories, and more.
People often overlook these sites in their research, but they are very valuable.
Set up an account at each one, and subscribe to different categories and lists. Follow what people like the most and add it to your list.
The next time you have coffee with friends, ask their thoughts on trends. Don’t limit yourself — talk with friends of all ages and backgrounds to get a wide variety of ideas.
Look around your house, your work, your life. Are there any products you can’t live without? What products would make your life easier? Is there anything that is hard to find in the supermarket?
Howard Schultz came up with his coffee shop idea on a trip to Italy and later called it Starbucks. The founder of Inkkas brought his idea from Peru, where he saw great shoes he thought that people in the US would like.
Stay alert and spot opportunities. You see hundreds of products and ideas each day. Be observant, carry a notebook, and remember to write everything down.
Ideas often come to mind while traveling, but it’s equally possible to spot them locally, in every day life.
Sites to Avoid
I suggest you don’t look at sites like SpringWise.com or TrendHunter.com. It’s not that they are bad — they are great — but Product Trend Sites publish the ideas that are out of the majority reach. How would you get and promote Wearable Sleeves that Help Stroke Victims Recover or Herb Inspired Fragrances in your store?
Once your list is full and there is nothing left you can add to it* — continue to the second part of this article. There, you will narrow down your idea list so it contains only the very best ideas.
*Your idea list will never be full! Keep making additions!
With the rise of dropshipping and the relative ease with which an eCommerce store can be created, niche shops have become the trend.
It quickly turned from an eCommerce novelty to a proven, successful strategy.
Don’t fight the big stores. Avoid too broad and general categories. The masses are already exposed to thousands of offers daily.
Look to supply niche products that are underserved by larger players. For example, there is no specific interest group for a normal belt, but you can easily tell that cycling gear will resonate well with cycling enthusiasts. Find your niche.
Stay Away Categories Filter
It may overlap with Niche Filter, but it’s essential to narrow down your product selection by excluding the ‘stay away’ categories.
Some product categories have grown significantly over the last decade and there are already many strong players and smaller shops out there supplying these products.
Just look at the eCommerce growth rates: books sales are flat and the jewelry market is shrinking. 80% of Americans say they’ve bought electronics or apparel online in the past three months, which means they already have their choice of trusted store.
Cross off the following general categories from your idea list: books, jewelry, electronics, and clothing — you will need to be more specific and find a niche.
Please note: I don’t suggest crossing out these categories entirely. You could sell plus size women’s clothing, men’s clothing, custom hiking/cycling electronics gear, or jewelry hidden in candles. I suggest you pay more attention to finding an interesting subcategory that will make your store unique. Don’t fall into the trap of selling in general categories.
Price Sweet Spot Filter
Andrew from eCommerceFuel says the perfect eCommerce product price is from $100 to $200. Richard from ABLS argues that it’s $75 to $150.
In my experience, my sweet spot price is $40 to $60 (at a 200% mark-up).
There are a few general rules to remember: the lower the price, the better the conversion rate. The higher the price, the more support you will need to provide.
With a $40 to $60 price range, the profits are relatively good and you can still cover the marketing costs of up to $20 per sale. The conversion rate is usually higher because the purchase requires less consideration on the part of the buyer. There is also less support.
You increase the odds of the success of your store in the developing markets. With Chinese dropshipping, you can sell everywhere in the world. Although $30 may not be much to people living in the US, it could be a lot for someone in South America or Eastern/Central Europe.
Bonus Secret: You should definitely try selling in developing/neglected markets. Lower advertising costs and competition equals a higher ROI. Don’t worry about the language barriers.
Look over your list and cross out product ideas that are more than $60.
Marketing Channels Filter
You have to think about your marketing strategy before you even launch your store. You may change it, but you must have a plan to begin with.
To put it simply, different marketing channels are great for different products. Once you pick the product, you have to figure out which marketing channel will be best for it.
Advertising an $800 hoverboard on Facebook might not be the best idea, but you might succeed in advertising it on Google Adwords. A hoverboard is not a spontaneous purchase, in most cases people will Google it to learn more about it and find which stores sell it.
I spent many hours looking at how other people pick their marketing strategies and didn’t find anything that would meet my needs.
I liked Rand from Moz’s tables representing the ROI, effort and cost of each marketing channel, but it seems to be outdated (published in 2009). There are also a lot of explicit guides and lists of all marketing channels, but none of them position marketing from an inventory standpoint.
So I decided to do a product evaluation / marketing table myself. Its design is similar the one from Moz’s blog but based totally on personal experience and random thoughts from the internet.
There are dozens of other marketing channels out there, but I doubt that PR stunts, co-branding opportunities, or video marketing will be the right channel for anyone just starting their business. However, you might want to consider affiliate marketing in the future, so it is something to keep in mind.
Think about your resources (time, money, knowledge), select one or two marketing channels, and cross out all ideas that don’t suit those channels.
This is a must if you’re going to use Google Adwords or if you’re trying to grow your organic traffic. I recommend using these even if you’re going to use another marketing channel. It helps to see what products are trending and also to check the demand of your product ideas.
Go through your product ideas and enter each product name and variations into the Google Keywords Analysis tool.
Select Keywords Ideas method and look at how many searches each Low Competition Keyword receives.
Let’s say you could get all of that traffic and 2% of them would buy at your store. Would this demand be enough?
Go to trends.google.com and do the same. Enter each of your product ideas into the search and look what the trend is. Is the trend increasing or decreasing? Are there any patterns? Do you see any spikes?
What Does It All Mean?
In general, you should avoid product categories that have little or no search traffic (less than 500 monthly searches). If you are planning to do a lot of search campaigns or grow organically through SEO, you should further dismiss all product ideas that have high competition according to the Google Keyword Analysis Tool.
Avoid seasonal products like Christmas decorations, Easter baskets, and even children’s toys. You can check product seasonality trends at Google Trends.
By focusing on seasonal items, you are reducing your sales cycle. Most Christmas decoration sales do not take place in the spring or summer, and Easter basket sales are not high in the fall or winter. You want to put products in your store that will be attractive for buyers for the entire year.
Dismiss all branded products — it is not easy to find suppliers. If you dropship them from little-known suppliers, chances are you’ll be selling fake products. Build your own shop brand, and avoid Western brands.
By crossing out broad categories, you protected yourself from giant retailer competition, but don’t think there are only a few shops out there who sell niche products.
Evaluating your competition may be an endless task, but you need to check whether the product you’re about to start advertising is already widespread among other websites.
Here’s a simple trick:
Google a product and try doing a product image search. Look at how many shops have similar products.
If you’re dropshipping, most store owners will likely have the same images.
Find your competitors, check their pricing strategy, popularity/traffic (on sites like Alexa.org or SpyFu.com), and what marketing channels they are using. Cross out all products ideas that already have huge competition.
I believe that you must have clear product selection processes in place in order to get the best results. People often pick ideas on a whim, with little consideration, and end up wasting a lot of time and effort for no results.
After going through this process, I ended up picking Fitness Leggings and decided to use Facebook and Google Ads.
Even though I’m not going to start the business, I’m pretty sure that it’s a great product idea worth trying.
What product idea did you pick?
This article was originally published on the Oberlo blog.