One of the hardest parts of building a successful eCommerce store is finding the right products to sell.
When I started selling the lumbar back-stretchers, I simply found a product that looked cool and started to sell it.
I created an entire store around it and, little did I know, it was a really strong product.
Had I followed through with the plan, it could have been successful.
Back then, when I had just started, I didn't do any product research or anything like that.
I simply saw a product, saw that there were few competitors, then I decided to start selling the product.
I just followed my gut.
They say you shouldn't live in regret, but I believe that had I played my cards right, I would still own that eCommerce store to this day - making a minimum of 7-figures from it.
Nonetheless, opportunities are abundant and there is always a better opportunity waiting around the corner.
Over the past few months, as I've eased back into eCommerce, I have come to learn of some fundamental factors that make up a winning eCommerce product.
The truth is, anything sells - there will always be demand for a certain type of product on the market.
Here are the criteria for a winning eCommerce product.
This is more of a rule, rather than criteria.
When you start a business, in any industry or market, it's crucial to start something that has demand.
When your product has a good track record or is known to be wanted by the market, your chances of success are 10X higher.
However, when you're unsure whether or not your product will sell, then your chances of success are much lower.
As a business owner, you want to do things that make your life easier, and your business larger.
To do so, keep things simple.
Find products that already have demand - you don't need to reinvent the wheel, to begin with, unless you really want to.
Although making small changes and tweaks to your product can make your product unique compared to the competition, I suggest you do this after having a list of customers.
A list of customers makes it a lot easier to launch new products, learn what the market needs, then build for them.
If you don't have a list, you'll be going off your own self-judgment which will be wrong most of the time.
There are a few ways to make sure that your product has a high demand.
Firstly, who is your target audience?
Who is this product serving, what problem is it solving?
Is that market of people big? Do a simple Google search to find out.
Generally, if your product solves a more mainstream problem, the market will be very big.
Secondly, when you go on Amazon, you can search for the product.
Using an extension to your browser, you can check to see the estimated monthly sales, revenue, and other metrics of the sellers of that product.
The best Chrome extensions I know for this are Helium 10 and Jungle Scout.
The more money a product makes, the more popular it is - that's true almost always.
Next, you'll want to make sure that the product you choose has a low availability - especially in brick and mortar stores.
This means that you shouldn't be able to find your product at your local supermarket or corner shop.
Why is this important?
It makes it a lot easier to brand yourself as the only brand to sell this product.
Imagine trying to sell hydro flasks.
Although the product makes millions and millions per month for some brands, it's extremely saturated.
Every household owns one, and there's too much competition for it.
Wherever you go, physically and digitally, you'll be able to find hydro flasks for sale.
This is usually a lot easier for newer, less mainstream products.
When I was selling the Lumbar back stretchers, you weren't able to find them in stores.
They were fairly new products, in fact, it was the first time I ever saw them and so I got the idea to sell them.
If your product doesn't sell in physical stores (brick and mortar stores) then you should be good to go.
However, to go a step further, you could also ensure that your product doesn't sell a lot in online stores too.
The lower the overall competition, the better.
However, you'll still need some stores making a lot of money from the product to make sure that the demand is there and that it's a profitable product to sell.
From what I remember, there was only 1 other store selling the back stretchers when I was selling them.
I don't remember doing much research about the niche - which was a massive mistake - but I would have seen the competition if there was any.
Facebook's algorithm learns all about your search habits and puts adverts that relate to you in front of you.
There was only one other lumbar back stretcher brand that I could remember.
This is not a necessary criterion, however, it could make your chances of success a little higher.
There are some products that you will sell that have a 'wow factor.'
These products can have higher profit margins than other products because of the 'virality' aspect of the product.
It could be a lot easier to make some products go viral compared to others.
When Blendjet's portable mini-blenders came out, they went viral.
They were a somewhat new product that not many people have seen before.
Blendjet capitalized on this product and is now making almost 9 figures a year from that one product.
These portable blenders had a clear wow factor.
They were small, compact, and cute.
They appealed to a large audience and were somewhat new.
The reason I say that this could increase your profit margins is that the more people that share your product, the less you'll have to spend on advertising.
If the market is doing the marketing for you, then there's no need for you to do it, right?
It's still important to spend money on ads to keep the wheels turning, but you won't have to spend nearly as much.
On top of this, once the market starts to adopt the product, they'll buy gifts for one another, for family, for friends, etc.
This is all free marketing that bumps up your sales and drives down your ad costs.
Be careful though, not every product that has a wow factor fits the rest of the criteria.
There will be many products you find that have a wow factor, but you should stay away from them.
One of the downsides of eCommerce is the somewhat low-profit margins.
The reason I turned away from eCommerce almost 2 years ago was because of the downsides of the business model - primarily the low-profit margins.
I started online businesses such as a marketing agency because the margins are much, much higher.
I then got into SaaS because the margins are even higher (in some cases).
Let's say your business makes £100,000 per year.
A marketing agency will have 85% profit margins when built correctly.
That means you're going to be taking home £85,000.
However, an eCommerce store may only make a 20% profit margin.
That means you're only taking home £20,000.
20% is on the lower end - you want to aim for a much higher margin for your business.
On top of this, as you scale, you can reduce your COGS (cost of goods sold), reduce your marketing spend, and make your business more efficient.
All of this will help you reduce your overall costs and increase profits.
With that said, you want to aim for a minimum of a 30% profit margin.
On the higher end, you want to make around 50% profit.
An eCommerce store with a 50% margin or higher is ideal.
However, it will be very hard to achieve this in the beginning.
Some factors that can increase this are:
- Advertising costs
- Fulfillment costs (delivery, freight, etc)
- Your brand
We already talked about the first two, but what do I mean by 'your brand?'
It's simple - there are normal, everyday brands and then there are luxury/high-end brands.
If you can position your company as a high-end brand, you can easily increase your margins by increasing your pricing.
Once again, this is another criterion that is not mandatory.
There are people who sell products as low as $15, and there are people who sell products that cost $30,000.
Each business is different and requires a different way of marketing.
For example, on Facebook, you can't just run adverts and make sales for something that's $30,000.
You need to generate leads, get on calls, and sell prospects on the item that costs this much.
However, you're not going to be selling products that cost $15 or products that cost $30,000.
The sweet spot would usually be between $50 and $1000.
Depending on who you listen to, this might be $50 to $150.
When you sell a product for $50, you can rest knowing that your product will have a decent profit margin, especially if you can source it for a low price.
On the other hand, if you sell something for $100s of $1000s, then you will have bigger margins, but more expensive costs for each acquisition.
Meaning, when you run adverts, the cost to acquire a customer will be more expensive.
This really depends on what you're selling or what you want from your business.
In general, high-ticket products are better because you can make fewer sales but more money from each one.
Let's say you sell a product that costs $50 and one that costs $500.
You need to make 10 sales of the $50 product to add up to one sale of the $500 product.
I generally think it's easier to sell high-ticket products, especially when they're positioned properly.
If you're a complete beginner, start with cheaper products.
Once you build a store that makes $10K per month or more, you can then start to sell other products in other stores.
However, if you think you want to sell higher-ticket products, by all means, go for it!
This might be one of the most important factors.
Evergreen essentially means "having foliage that remains green and functional through more than one growing season."
In business terms, it's a product that can make and maintain sales throughout the year.
I've seen a lot of people, even friends who are not entrepreneurs, ask me if they can sell things like 'Christmas decorations.'
My answer is always the same.
Yes, you can.
There's a big but in there, though.
You will only be making large amounts of sales in the 4th quarter of the year.
There was a good idea that came up in a conversation not long ago.
Someone asked me, what if I sell products for each quarter of the year?
Meaning in the first quarter, you sell products made for that season.
The next quarter, you sell products for that season, and so on.
It's a good idea, but if we go back to our principle that we spoke about earlier - 'keep it simple.'
If you sell different products for different seasons, you're giving yourself too much work to handle.
You don't need to do that.
All you need to do is pick an evergreen product, and sell it (as long as it fits these criteria).
How do you make sure a product is evergreen?
There are a few ways.
The best way to do so is by using Google trends.
Type in the word or phrase for what you want to sell, choose the location you will sell in, and then make the date the past 5 years.
You want to see a graph full of higher highs, and higher lows.
In forex terms, this is what you call an uptrend.
If the product has continued to increase in popularity over the past 5 years, with no massive dips or inconsistencies, it's a good product.
Take a look at the graph below:
This is what a product you don't want to sell looks like.
Can you guess what it is?
It's the graph for a fidget spinner - a viral product that was trending.
During the peak, you could have made millions - but soon after, your business would have been struggling to breathe.
Next, you can go on Amazon, use the Google extensions we spoke about, and check the graph for the products.
Again, if the product has a consistent, up-trending graph, it's likely to be a good, evergreen product.
When we start eCommerce businesses, we're thinking long-term.
We want to think about the business in 1 year, 5 years, 10 years.
What do you want your business to look like?
What do you want your business to be doing in that time?
How much will your business be making?
A lot of people start eCommerce businesses to sell products for a few months then close the store.
That's not a business, it's just reselling products with a shopfront.
The goal of an eCommerce store is to build it into a reputable brand and eventually turn it into an 8 figure, 9 figure, or billion-dollar market leader.
That's the mindset you need going into eCommerce.
If you're looking to make some fast cash, look into something like arbitrage or affiliate marketing, or whatever else other gurus tell you.
Here, we build real businesses that make a difference in the world.
We don't focus on making fast money or getting rich overnight - it doesn't work like that.
I've been working on building businesses for almost two years and I know, first hand, that nothing comes easy.
That's why I don't promote any 'get-rich-quick' schemes because they don't exist.
If you're a regular reader of my articles, you'll know that everything I write about is ambitious and long-term.
That's the mindset of a winner.
With that said, you don't want to find any product that's trending, got a wow factor, and sell it.
You want to take your time and make sure the product has real potential.
Make sure your product fits these criteria.
When you do, the final thing left is to make sure your product is brandable.
For example, if you sell something like notepads, you can't really brand them properly.
People just buy notepads from anywhere, no matter what the brand is.
Next, you want to make sure that your product has other products that you can sell with it.
So you might start by selling ab trainers, but eventually, you'll add more products like gym mats, dumbells, resistance bands, etc.
There's one person I really like listening to when it comes to eCommerce.
His name is Ryan Daniel Moran (he still hasn't replied to me on Instagram, so I'm a little hurt by that).
Ryan preaches about finding a person and serving them.
Think of someone, for example, an overweight dad looking to lose weight.
What do they need first to begin their journey to losing weight?
They might need diet plans.
Or they might need workout clothes.
Start by creating XL workout clothes.
After that, your next product might be, sweat-absorbing headbands, and so on.
Simply put, you want to choose products that you can brand and increase the value of.
Then you need to make sure your product has a follow-up product to go with it - 3-5 is perfect.
This way, you can upsell people and make sure you build a real brand, not just a store that sells things.
That was the criteria for a winning eCommerce product.
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