Product research is the process of exploring diverse products or niches and analyzing multiple data metrics to predict the potential success of a product. Solely picking a product based on personal preference neglects the advantages of a well-thought-out strategy, risking potential costs and setbacks for your business.

To avoid a downturn in your product’s performance, it’s crucial to assess demand, evaluate competitors, develop a distinctive, top-tier product, and produce it at a profitable price point.

Now that you know what product research is and why it is essential, let’s discuss discovering profitable products for online sales. Before exploring product research, give some time to define the specific criteria that suit your business needs. Adhering to these criteria will aid in making informed choices and refining your product exploration.

1.     Selling Price

What price are you aiming to set for your product? Setting a low price might not leave a sufficient profit margin after covering costs. A higher selling price could increase manufacturing expenses, demanding larger budgets to sustain your product.

We recommend aiming for a price range between $20 and $50. This range allows for post-selling profitability and advertising fees, maintains manageable manufacturing costs, and positions your product within the “impulse purchase” bracket. This strategy positions your product favorably — customers might hesitate to buy higher-priced items from unfamiliar brands.

Remember that the market in this price range may be more saturated because products are inexpensive to source, and competition is high.

2.   Product size and weight

We recommend initiating sales with small, lightweight products for new or inexperienced sellers. This approach helps minimize shipping expenses and simplifies inventory storage management. For example, it would be much easier and cheaper to source a small product, such as a necklace, versus a couch. Couches may be in high demand, but can you handle the logistics of selling large-scale furniture?

Consider the differences in storage space and shipping costs between these two items. If you have the knowledge and capabilities to sell bigger and heavier products, go for it!

3.   Product Simplicity

Does the product you want to sell contain numerous moving parts or components prone to breakage? For instance, if you opt for the electronics category, ensure your supplier can manufacture high-quality products with minimal potential issues.

Selling defective products can lead to multiple difficulties, including negative reviews, increased return rates, and a drop in sales. For newer e-commerce sellers, consider focusing on straightforward, low-maintenance items less prone to potential drawbacks.

4.   Perishable or consumable products

Are you considering a product within the grocery or health categories? These can yield profits as they often substitute a loyal customer base due to repeated purchases of household essentials. However, there are certain aspects to be mindful of.

These products commonly come with expiration dates, so consider this factor when determining your inventory levels. Overestimating the demand could result in excess inventory that reaches its expiration date.

Regarding food or supplements, follow relevant local and federal regulations regarding the product you choose to sell. Research and understand this information before selling in one of these categories. 

Using the mentioned criteria will assist in narrowing your product exploration rather than selecting through a wide array of products. Consider additional criteria as your research progresses and leads you to particular items. However, if you’re starting without a specific niche or market in mind, this is an excellent starting point.

After figuring out some general criteria to evaluate potential products, we can now come up with some solid ideas. Here are some steps to find an excellent product to sell online.

•     Start with hobbies or interests

This is an excellent place to start because selling a product you’re interested in would be much more enjoyable. Just because you like a particular product doesn’t mean others will. You will still need to evaluate your ideas, but list some products that interest you. 

 For example, consider selling a golf set with clubs, balls, and a sturdy club bag if you like to play golf.

When jotting down ideas, think about how you’d like your products to be better than what’s currently available. You love to play golf but have yet to find the “perfect golf club.” How can you outdo clubs in the market so that they can solve customers’ problems and needs?

•     Figure out what is currently trending

Capitalizing on growing trends is an intelligent way to make money selling products online, especially if you catch one at its onset. 

If you’re active on social media, especially on apps like TikTok or 小紅書, you can get a good gist of what products people are talking about. What categories do people love? What new items are consumers raving about? This is a helpful way to harvest ideas, but be wary of “fads” instead of trends. 

Another way to view current trends is to visit “Google Trends.” The free tool will show you the popularity of any topic over time to determine if something is trending or declining.

You can also use Google Trends to find out what people are searching for the most in a particular country. This could give you more viable ideas for products.

•     Search on Amazon

An excellent method for finding promising product ideas is to explore the primary source — where people purchase them! Amazon offers various “best sellers” lists to explore and discover potential ideas. Here’s how to navigate through this search:

First, go to Amazon’s Best Seller page. You can find that in the main menu on the Amazon homepage.

This page will find the best-selling products for each Amazon category. While these products listed are selling very well, new sellers will likely be able to compete with them as they have thousands of reviews and an established market share. 

Instead, you’ll want to look at Amazon’s other lists, such as New Releases, Movers & Shakers, Most Wished For, and Gift Ideas. The products listed here will be popular and sell, but it will be easier to compete with over the top 100 best sellers.

Now, you can dig through these lists to discover new products you may have never considered selling!

•     Attend wholesale trade shows

Trade shows offer an excellent opportunity to connect with suppliers and manufacturers personally. They also provide a hands-on experience with various products and offer insights into new market innovations.

Meeting suppliers in person gives you a huge advantage over the competition. You can build real-life relationships and usually get the best pricing when negotiating in person.

In the Amazon selling world, this is called the wholesale business model. Trade shows benefit sellers who prefer not to establish their brand but aim to resell successful products and brands in their stores.

After discovering some products you would be interested in selling, how do you know if they’re good markets to sell in? This section will show you how to evaluate your product ideas and analyze your potential competitors.

Here are some key factors you should consider when choosing a product to sell online:

1.    Product Demand

 Are customers searching for and purchasing the product you want to sell? It would be best if you made sure that there is enough demand for you to enter the market.

Check Amazon Best Seller Rank 

Even if you’re not selling your product on Amazon, you can still use Amazon’s data to determine the demand for your product. If a product sells well on Amazon, it usually sells well in other marketplaces.

At Real Digital, we suggest you aim for at least 10 Sales per day or 300 Sales per month. If you look at the top 10 or so products on an Amazon search results page, you want the total monthly sales of all those top-selling products to be around 3,000.

This shows us that there is decent demand in the market to make some sales and compete with other brands.

How do you find the Best Seller’s Rank, and what do the numbers tell you? Go to a random Amazon product page and scroll until you find the “product details” section. 

For this example, the BSR (Best Seller Rank) is 106,132 in Sports & Outdoors. If you’re unfamiliar with selling on Amazon, this number may have little significance, but some essential information can be gleaned from it. The higher the BSR, the worse the sales are for that product. This high BSR means low sales.

Check product reviews

Reviewing product feedback, mainly the review dates and their quality, provides insights into the frequency of purchases for that product type. It also highlights consumers’ preferences and criticisms regarding the product. Analyzing your competitors’ reviews allows you to identify potential enhancements for your product.

Next, let’s explore the process of analyzing reviews from competitors. This analysis enables you to identify recurring positive and negative aspects, helping you understand what customers appreciate and what they find lacking in that particular product.

2. Competition

While there might be a demand for your product, evaluating the market’s competitiveness is crucial. A crowded market with numerous competitors can make differentiating your product or e-commerce store challenging.

Google Keyword Planner

Use this tool to see how competitive a particular keyword is for Google Ads. Google Keyword Planner will indicate the level of competition you’re up against, along with the estimated keyword bid.

3. Seasonality

Selling an evergreen product is ideal because it is in demand all year round, and selling a seasonal product can also be quite profitable. You only need to be wary of how much inventory you should order for the season and when to do it on time.

Google Trends

To identify seasonality, revisit Google Trends to observe when people actively search for a specific product or keyword during the year.

The product should consistently sell across all four seasons if the data indicates a steady search interest throughout the year. Conversely, if there is a substantial spike during a specific time followed by a flat line for the rest of the year, it signifies seasonality or implies that it was a temporary trend that had its peak and declined.

Here’s an easy example: if you search for “Christmas lights” you can see that it spikes in December and quickly declines afterward.

4. Profitability

Once you’ve assessed a product’s demand, competition, and seasonality, ensuring the product you intend to sell will yield profit is crucial. This encompasses sourcing the product at a feasible cost and setting an appropriate price.

If you find a product that sells well at $25 but can only source it for $19, it won’t be a good opportunity for you. After shipping and potential selling fees, you will lose money on each sale.

Depending on the platform or marketplace you will be selling on, you must factor in various fees such as subscription, selling, advertising, storage, and shipping fees. 

1. First, determine the average price your competitors charge for their products. 
2. Then, figure out which platform(s) you want to sell your products on, as each has different fees for their respective sellers. If you’re going to sell on Amazon, make sure you read about and understand all of Amazon’s Fees. 
3. Next, go to a site such as Alibaba, search for your product, and start contacting suppliers for pricing. After getting a price and shipping quote, calculate your profit after All costs are involved.

There is no particular profit margin you should aim for as it is different for every business, but we recommend around at least a 30-40% gross margin. This will leave you with some room for a marketing budget since you will likely need to advertise your products to stand out and attract sales.

5. Marketability

This aspect holds equal significance alongside the previously mentioned factors. How do you plan to market your product in comparison to your competitors? What enhancements can you make to the product itself, the product images, and the listing description?

You should also consider a social media strategy for your product and determine if it can help grow your business. Search social media sites such as Facebook, Instagram, and TikTok to see what other brands in your niche are doing to market their products.

Even if your product is top-notch within its category, effective marketing is essential for customers to become aware of it.

We hope that this guide assists you in recognizing the significance of thorough product research for your online business. Apply the provided tips and strategies to set yourself on the path to a successful product launch.

Selecting a lucrative product to sell on Amazon involves assessing various factors. Firstly, analyze market demand through research tools like Amazon Best Sellers and Google Trends to identify products with consistent interest. Aim for niches with manageable competition to enhance your chances of visibility and success. Evaluate potential profit margins by considering manufacturing costs, Amazon fees, and other expenses. Opt for lightweight and compact products to streamline logistics and minimize fulfillment costs. Prioritize quality and reliability to build a positive reputation and encourage customer loyalty. Additionally, consider factors like brand-ability, seasonality, legality, scalability, and personal passion to ensure long-term viability and satisfaction with your chosen product. By carefully weighing these criteria, you can increase the likelihood of finding a profitable and sustainable product to sell on Amazon.

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