Module Three
Product Selection – Ultimate Guide For You To Know
Do you know the most important aspect of the success of any business? Especially when you are building your online presence, what according to you plays the most important role? Well, product selection is the primary and most crucial aspect that plays a significant role in ensuring your business’ success.
For example, imagine a scenario where you have completely set up your online business. You have enough supplies, warehousing, fulfillment, and whatnot. Moreover, you have also done extensive marketing of your products. But then you realize that sales are not coming. What can be a reason for this?
Well, maybe the primary reason for this is that you do not have selected the right product. Yes. It can be a significant possibility. But well, that cannot stop you from building your brand. Can it?
As famously said by Maimonides, “The risk of a wrong decision is preferable to the terror of indecision.” Hence, we have curated this chapter for you. In this chapter, we will be telling you some important aspects of product selection. By the end of this chapter, you will be able to understand:
- Trend analysis and niche selection
- Identification of profitable products
So, let us proceed with the chapter and understand each aspect of product selection in detail. Using the information present in this chapter, you will get an advantage in choosing the right product that sells for your e-commerce business.
Trend Analysis and Niche Selection
Before we move forward to trend analysis and niche selection, there must be one question that might be coming to your mind. Why not sell the product of your choice that you are passionate about? Right? Well, yes, you can do that too.
There are so many examples of people who sell the product they are passionate about themselves. Be it clothes, mobile accessories, and more. This comes with a lot of advantages such as:
- You have an understanding of the product that you are selling. This ensures that you know the ins and outs of the product. When it comes to the quality, you can tell if the audience is going to like it or not.
- Another advantage of this is you are never bored of it. You have a constant interest in the product and you are not bored dealing with it. Rather, it gives you immense satisfaction and pleasure to send good quality products for enthusiasts the same as yourself.
But, what about people who are interested in e-commerce business but do not have much interest or knowledge in any specific niche or product? What should they do? Well, we have a solution for you too. Let’s explore.
Analyzing the Trend
So, if you do not know what you should sell, look for what people are buying. Keep observing the trend thoroughly. Once you are aware of what people are interested in purchasing, you can include the same in your listings.
Technically speaking, trend analysis refers to the process of finding out and analyzing current patterns of demand for a product or service over a specific period. With the trend, we see historical data, and current popularity, and then forecast how things will be in the future.
As an e-commerce business, this gives you a lot of leverage, especially in finding products that work. Let us take an example to understand this better.
Imagine that you are thinking of selling decorative items. Now, what kind of trend analysis can you perform? Well, here, the first thing that you need to identify is what kind of decorative items people are purchasing more. Are they going for handmade items? Are people more fond of products built in their own country or imported?
Asking these types of questions and then understanding the answers, facts, figures, and results in detail will help you. Hence, in this manner, performing trend analysis can provide the right direction for your business.
Niche Selection
Do you know that the conversion rate for niche e-commerce websites is 29% more than broader marketplaces? The importance of niche selection cannot be overlooked, especially when building an e-commerce business. But what is niche selection and how to do it? Let us help you understand it here in detail.
A niche refers to a particular segment of a broader marketplace, identifying which is way more convenient through particular characteristics it has. We look forward to niche when we are targeting customers and audiences specifically of a segment.
Why is niche identification important? It is one of the prominent questions that people ask and you also must be doubtful about. Well, let’s answer this for you.
Why Should You Identify Your Niche?
Like Bruce Lee once said, “I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times.” The same analogy can be applied to finding your niche. The following are the advantages that your business will get through identifying and working on a particular niche:
The first advantage your business gets is increased trust and loyalty towards the brand. When people know about your expertise and extensive research on a particular niche, they are more likely to trust you. It builds a sense of loyalty towards your e-commerce business and thus builds potential customers. Moreover, it showcases your expertise and even increases your overall profits.
Another aspect of how your e-commerce business will get an advantage is by reducing marketing costs. When you already have selected a specific segment from the whole market, you only need to target them.
Let us take an example of the importance of niche finding and building. For instance, you are selling world-class cricket equipment in your store. You are profitable and people come to buy from you. But, one day you decided to expand your business and you also started selling other sports equipment.
Now think of it. An individual is looking for a shop, specific to cricket equipment. Will they come to you or go to someone who is selling specific products? The second option, right? So, depending on the size and the scope of the market, a niche is defined and the marketing is done accordingly.
Identifying Profitable Products
Now, we have come to the last section of this blog. Identifying profitable products in a business can help your business scale and reach better heights. But the most important aspect is how. Well, follow the following points to identify the most profitable products in your niche for the market:
- The first step that you can take in this direction is to research products on famous online marketplaces. Identify which products are being sold in those marketplaces and are in high demand.
- In addition, you should research products that have high profitability margins.
- Think of it practically. Which one is better for profitability? Products with high competition or products having low competition? The products with low competition are the ones where you have high margins of profitability.
- Perform enough market research before you finalize the product. In our previous
module, we saw in detail the aspects of market research. Hence, put some effort into detailed market research and find out the products in demand.
- What is it that customers want? What is one product that can meet the current demands of the audience?
Answering these questions and pondering about these points can help you find a profitable product for your e-commerce business.
So, as we proceed to the chapters ahead, we will learn many more concepts about product selection, listing, and more that will help you build a profitable e-commerce business. So, be prepared, as we are on our journey to build a profitable e-commerce business.
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Crucial Takeaways from this Chapter
- Selecting the right product is essential for business success.
- Analyzing market trends helps identify in-demand products.
- Focusing on a niche builds customer trust and reduces marketing costs.
- Prioritize products with high demand and low competition for profitability.
- Thorough market research is crucial to understanding customer needs and finding profitable products.