You’ve found your product, GREAT! But careful, don’t get over excited about a product that you just found or had an idea for. You need to evaluate first if your product fits the market and its consumers.
We call this “product-to-market-fit,” meaning you have something that the market really needs.
To evaluate your product you should go through the following steps:
- Cost of manufacturing
- Cost of transport.
- This can be crucial to your margin if the transport cost is very high.
- Cost of duties and taxes
- Possible profit before tax
- Make sure no one or not many people carry your product.
- Analyse the market, do your research. Look at social media hash tags: http://topsy.com/ (enter your product’s name or category, e.g., LED bulb)
- Test the idea with a few forums (but don’t give away too much information) – Research trends on blog sites (such as Shopify.com)
More great tips available on Shopify:
For Example, look at the picture of this post. Its a Projector that can stream movies, music, documents via WiFi / USB and more. I don’t remember exactly but when I saw it at the Exhibition I was really excited. I was eagerly waiting for the price from the supplier. Once I got it I was really disappointed as the price was so high I could never sell it to any of my Customers. Not even if I would have done a lot of Marketing etc.
So what went wrong? First the supplier probably hasn’t done enough research on the market if his product can actually sell and if there is a niche. Second, I was super excited and sent pictures to my Customers already and they were all giving great feedback asking for the price. So when I finally got the price and (embarrassed as I was) sent them the price I made a fool out of myself. Not one Customer was interested in such a high price item.
Remember, do your research and make sure you have a “product-to-market-fit”.