By now you have come up with several product ideas.  Hopefully, you started with a market and discovered their needs – checkout my article on Choosing a Market First if you missed it. 

There are three main components to understanding the potential success of a product or product line. 

1. Market Demand – Are They Looking for It?

The first step in determining the potential success of your idea is to identify how much demand there is for the product. 

The easiest way to research market demand is through keyword research.  Looking at whether potential customers are searching for what you are “selling”.  There are several free tools you can use to gather this information plus some paid tools that do a very good job of consolidating the results.  My favorite (because it’s free) is actually Google’s Keyword Tool.  Another one that I like to use is NicheBot.  It is less expensive that most of the others, but still uses the same information.  I find Wordtracker to be the easiest to use and the most comprehensive in terms of the data that is returned.  However, it is also the most expensive. 

The first step is to brainstorm words and phrases that you think a customer might type into a search engine to find the product.  For example, in my case, I would use “rc cars” as my search term.  Then I might type in some of the specific manufacturers or products that I am interested in selling.  When you get back the results from these research tools, take a look at the number of searches to determine how many people are looking for this item.  Each of the tools I listed above provides even more detail on the best way to analyze keyword data.

2. Competition – Are There Others Already Selling it?

Competition is a good thing.  It means that there are others already successful at selling this line of products.  But you do need to analyze the competition carefully to determine if there is “room for one more”.  Now some would advise that there is always room for one more.  I don’t disagree with that concept – my point is only that you don’t necessary want your first online biz to be an uphill battle against Walmart

The best place to start is to perform a Google search on the top keywords you found in the previous step.  The top 10 organic listings are those you want to focus on.  Take note of the AdWords competitors too – but you want to know how hard it will be to break into the top 10 organic spots. 

The data you want to check with each competitor is pricing & competitor quality.  Go to the competitor sites.  See what the quality of their site is.  Is it professional?  Would you be comfortable buying from this seller?  What are their product prices like? Record some of these to use in the next step.  Are the top 10 competitors similar in price?

When you get to the point where you understand the best practices involved in SEO, you should also check whether they have strong SEO skills.  This will give you a much better idea as to whether you can break into the top 10.

3. Product Sourcing – Can You Get it at a Good Price?

This last step is one that I rarely hear people talk about (except in the book I recommended in my last post.)  But is is SO IMPORTANT!  Don’t skip this one.  You can find out that your product idea has a ton of market interest and the competition is beatable – but if you can’t find a distributor, a dropshipper or a manufacturer that will sell it to you at a margin worth working for, you have a “loser”. 

This is by far the hardest step because it is going to require . . . . phone calls.  I know, I just heard a huge number of you gasp.  If you have a fear of talking to people and if you are getting into this business so that you can hide behind the computer, I have one reality check for you to grasp right now: If you want to own and run your own business, you will need treat it like a business.  That includes dealing with setting up the proper business entities (business license, bank account, etc.) and creating relationships with suppliers. 

I will tell you that this was my biggest hurdle in the beginning – but when I finally got over the hump, I was flying down a rollercoaster at full speed and it was a blast!! 

One place that many folks are finding their suppliers is through the folks at WorldWide Brands and their product OneSource.  Depending on the product you have chosen to research, you may find wholesalers or dropshippers in their database to contact.  The great thing about contacting suppliers through OneSource is that they have already shown interest in working with smaller, online businesses.  Which is one hurdle you can skip. Isn’t that Nice?

Take Action

All of these steps may seem intimidating at first. 

But just Get Started. 

Take Action. 

Commit to completing all of these steps on at least one product line. 

Once you’ve completed this research, you will feel empowered to keep doing it again and again until you’ve found your “Winner”.

Several of the tools and resources that I recommend can be found on my Online Business Tools and Resources page.

What Products Should I Sell?

There is an ongoing debate in many of the internet marketing circles about where to focus your attention when deciding what to sell.  Some feel that you should focus your attention on products that you are passionate about.  What do you love to do in your spare time? What gets you really excited?

Others feel that you should forget about your personal passions and just focus on what makes money.  What are the profitable markets? Where are other people spending their money?

Passion is Motivating

There are many advantages to going with your passion.  First, and probably the most important, is motivation! Selling something you are passionate about can be very motivating.  And as you know, motivation can be a very large problem for the work-at-home entrepreneur. 

I took this concept a step further and chose a market that my husband is passionate about.  For all of you that have fought tooth and nail with your spouse about starting a home business – chew on this angle for a moment.  You are building a business around and selling something that they are excited and passionate about – there is no better way to get the ultimate “buy-in” from your second-in-command!  It has worked wonders for us and made it into a true family business that we both get excited about – for different reasons.

Second, you will have a vast knowledge about your products and your market. You are your market – what better way to understand them?  Both writing and marketing become a lot easier when you are submerged in your passion instead of trying to study your market. 

Hobby or Business?

If it isn’t profitable, it’s a hobby.  Yes, it can take some time, but in the big picture, you are doing this to build an income.  In researching your target product and your market, you should always focus on profits – passion or not.  If this business is something you want to pay your bills with and build your retirement on, you need to be serious about the numbers.

You need to conduct the proper market research up front (more on this in coming posts) to understand whether the long term potential exists.

Without profits, all of your hard work and passion won’t mean a thing.  There are many products and markets out there that sound great at first, but once you dig into them, you realize that the margins are so tight, you couldn’t possibly squeak out the profits you are looking for. 

Don’t disregard different ideas just because they don’t match your personal desires.  You may find new hobbies or markets to get excited about that you never even knew existed.

Sell What Sells

So the moral of the story here is that I want you to be sure to research, research and then research some more before you put your heart and soul into this business. You certainly can start with your passions and see where they lead, but in the end, make the decision based on the numbers.

I think I can actually hear you all asking “But, How?” and that’s the plan – We’ll talk more about how to go about that research in the next few posts.