Choosing the right product for your Internet business

Many new entrepreneurs start up with a lot of energy. Establishing a web site store front, and then starts looking for wholesale partners and products to sell. And many end up frustrated about the sudden loss of momentum, when they get to the stage of running the business.

DO NOT REPEAT THEIRE MISTAKES!

They did not fail because they did not have the spirit – no – they failed because they did it all backwards! Do never start anything before you know what it is you are starting up. This might sound banal. But as you will see, it is not always that obvious. Before anything else, you need to decide on a product or a product line. If you do not do this as the first step, you will have an impossible time, trying to integrate a product into you business later. The problem is that not getting the product in place from the very beginning, in effect means that you do not know where you are going. It is not enough to say 'I want to build a business'. You business have to build and form itself around a product line – this is essential for any healthy business.

Deciding on a product or product line

I cannot tell you what to sell but I can advise you on whom to make a sensible choice. You need to make clear what you are interested in, what you know about. The golden rule is to sell something you have an in-dept knowledge about, which is not too popular amongst online sellers. So basically:
  a. Know your product.
  b. Find a niche.

Know your product

We all have special interest and insights. In building an online business it is all about utilizing these interests and insights into focused business strategies. The special interest or knowledge can be obtained form hobbies, jobs, schooling etc. The main point is that you probably know about something, that the average person does not. This you can use to your advantage.

If you love fitness you might want to sell fitness related products, ranging from equipment over clothes to food supplements, or something along those lines.

A good idea is to think of the special area you know about, and then do a brainstorm drawing up a mind map. In the center you have the special subject, and you will soon find that it is interconnected with a lot more then you had imagined before. Now look at the mind map. You have to focus on those things which can materialize into products and which you would like to sell.

If you are unsure if you can go through with the product you ended up with, go back to the mind map, elaborate on it, or simply start a completely new one, with a new area of interest. This will give you a broad option of products to choose from. Again I cannot tell you what is the best, but I can tell you which you should look out for. If some of the products are very hot and trendy, you probably should avoid it. The reason is that trendy products have a lot of sellers, and the competition will be tough. Also trends change, and when they end people generally turn their backs completely on them, making the products very hard to sell. This combined with the fact that a lot of sellers will have a lot of these no longer trendy items in stock. It is pretty clear what I am getting at.

It should be clear by now, that I am advocating for you to stay clear of any product you do not have any knowledge off. It will bring you into trouble, trying to sell such a product. Customers want answers, and if you are not able to give them that, you will loose them!

Finding your niche

It is never a good idea to sell products that you can get form your local store. The chances of you being able to get them cheaper then the store are slim, and you will have to be able to give cheaper products then a local store. This I how you make up for the customer not being able to try it out and get it right away.

This is why you have to find a niche in the market. This could be a special designer product, cheap but 'odd' products and so on. By knowing your stuff about the products in a certain branch of a market, you will be able to point out areas which can make up for a niche. Utilize your knowledge! Go back to the mind map and try to develop it further, become more creative and activate all that insight into the field and market you are focusing on. Now you just have to figure out if there is any sale in the niche you end up choosing.

Analyzing market potentials

Instead of going down to the library and researching the old fashion way, the Internet has produced new ways to get around this problem. It is now easier then ever to make a marked analysis! You do not even have to have a great insight into how this is done; new software programs basically do it for you.

The information you gather will show you whether or not you can compete with other sellers of that product on the Internet. It will help you understand what kind of demand there is for that product, as well as its advertising and marketing potential. Since your market is online, the majority of your research is performed online as well. With market research, your ultimate goal is to find out whether or not your product is a good idea to sell, or whether it's a product you want to avoid.

Most people realize they need to research, but they don't know how to research. Before you can start, you have to understand the basic elements involved:
  Keywords, Demand and Competition.

Keywords

Let's use eBay as an example for a moment; imagine what a mess it would be if there were no search fields on eBay. Sellers would just throw their products into one big pile, and it would be up to the customer to shift through and find what they were looking for. What a nightmare! Fortunately, that's not the case because in the online world just about everything gets sorted by keywords.

Search engines, search fields and just about any search function online uses keywords to qualify what results are returned. When you perform a search online, whether you realize it or not, you're typing in keywords. For example, if you wanted to find picture frames, you'd likely type the keywords "picture frames."

Bottom line: Keywords are just words we use everyday when we type. Easy enough, right? Well, from a research perspective, they tell us an enormous amount of information, so learn to love keywords. They are our friends.

Demand

Simple Definition of Demand: how many shoppers are looking for a product.

A big difference between an online business and a physical store is that the Internet offers you the potential of a lot more customers. You're not bound by location; your customers don't have to be within driving distance.

Because the Internet is so massive, finding out how many people are looking for one particular product seems like an impossible task. However, when people search for products online, remember that they're typing keywords into their search engine browsers.

There are tools available that track the number of unique searches performed on various search engines for any keyword combination. These Keyword Counting tools let you type in keywords, and then tell you how many people searched for them, over a certain period of time on major search engines.

Competition

Simple Definition of Competition: retailers who are currently selling the products you're considering selling.

There will ALWAYS be competitors selling what you're selling (unless you make a completely unique product and manufacture it yourself.but that's another article) We've often heard people say they want to sell something no one else is selling. The problem with that idea is if there were only one retailer selling a Manufacturers' products that manufacturer wouldn't be in business very long. Just like you wouldn't be in business for long if there were only one customer buying from you. So don't get turned off by competition. It can be measured, and it can provide you with very useful information during your research.

This all means that you need to think hard on which product to chose, and make research on how profitable the product is. It is all about supply and demand, just like any other non-online based business.