How to do product research？
1. Evaluate the market size
Market size can be difficult to determine but with some educated guessing, you can probably get a good idea. For example, a product that caters to pregnant females between 25 and 40 years old probably has a sufficient market. But a product that caters to pregnant females between 25 and 40 years old who like punk rock music will likely be too narrow.
Example: Daneson sells high-end, luxury toothpicks. You can imagine that it takes a pretty discerning and dapper man to purchase exquisite toothpicks.
A product like this likely has a very narrow market size. This narrow market size limits the revenue potential for this business. But, a narrow exact market size potentially can be easier to market. Allowing a company like Daneson to penetrate its market and capture it more cost-effectively.
Determining exact market sizes is usually impossible for most businesses. But there are some ways to understand market size in a more general way. Google Trends is a good starting point. Not to determine market size, but rather to determine market demand trajectory.
From there you can also look for your particular product idea being sold elsewhere. And look at the number and quality of customer reviews. Are there no reviews, just a few, or hundreds?
This can give you an idea of how many people are searching for your keyword terms. And in return, can also give you a better sense of the market size. Combine all these methods with some realistic judgment. And you should start to get a good sense of the potential market size of your product idea.
2. Analyze the competitive landscape
What does the competition look like for your selected product and niche? Are you first to market? Are there already a few competitors? Is the market saturated with people selling the same product or targeting the same niche?
If you’re first to market, you’ll want to do a lot of market research to determine that there is in fact a market interested in your product.
If there are many competitors in the market, that’s a sign the market has been validated. But, you’ll likely have to determine how you can differentiate your brand and products from the sea of competitors in order to carve out your own spot.
Google searches and SimilarWeb will help you uncover current market players. And an SEO tool like Ahrefs can tell you approximate search volumes for your chosen keywords.
It will also tell you how competitive they are.
3. Determine product category outlook
Riding a fad can be dangerous. A trend can be lucrative. Stable markets are safe, and growing markets are ideal. Understanding where your product and niche lay can play a huge role in your success or failure.
To better understand the differences between each of these, let’s look at the growth curves. Then at real-world examples of each type:
a) Fad
A fad is something that grows in popularity for a very short period of time and dies out just as quickly. A trend can be lucrative if your entry into the market and exit are timed perfectly. But this can be difficult to predict and usually a recipe for disaster.
A Geiger counter is a personal electronic device about the size of a cellphone. It measures the level of radiation around you. Shortly after Japan suffered an earthquake in 2011, Geiger counters were flying off the shelves. But, as you can see from the Google Trends graph below, interest died as fast as it started.
b) Trend
A trend is a longer-term direction that the market for a product appears to be taking. It doesn’t grow as quickly as a fad, it lasts longer, and generally, it doesn’t decline nearly as quickly. Trending products can sometimes also develop into long-term growth markets. Although this can be difficult to predict.
c) Stable
A stable market is one that generally is immune to shocks and bumps. It is neither declining nor growing but maintains itself over long periods of time.
A kitchen sink is a perfect example of a product with a market. It has generally remained constant and flat for decades. There’s likely not going to be any huge spikes or dips in the interest and buy behavior of kitchen sinks.
d) Growing
A growing market is one that has seen consistent growth. And shows signs of a long-term or permanent market shift.
Yoga has been around for a long time. But over the last ten years or so has become a mainstream health and fitness activity. The benefits of yoga are well established, making this niche a solid growing market.
Google Trends will help give you the big picture about whether something is a fad, trend, growing, or stable market. If you see unexplainable spikes, try doing some further searching to see what the possible cause was.
4. Is your product available locally?
A product that’s readily available locally means there’s one less reason for consumers to seek your product out online. But, a unique or hard-to-find product that isn’t available locally. It means there’s an increased chance of someone looking for it online. And increases their chances of actually purchasing it online.
Doing a search on Google for your product + the name of your city. If you don’t live in a major city, try substituting the name of the major city you’re closest to. It is one of the simplest ways to find out if your selected product is available locally.
5. Determine your target customer
You don’t need to go into great detail defining your exact customer persona at this point. But, you should be aware of the type of customer you would likely be selling to and their online purchasing capabilities.
If you have a product geared to teens, it’s important to keep in mind that most teens don’t have a credit card to make purchases online. If your product is geared toward the aged, they have a lower level of technology adoption and don’t like to buy online.
To find out more about who your target customers are, you can look into your Google Analytics account.
6. Determine the markup
It is important to take markup for a specific product into consideration before diving too far into a product idea. When you begin selling online, you’ll quickly find out there are lots of small fees. It will eat into your margins, so having a strong initial markup will provide you with the necessary cushion to absorb these little costs.
7. Figure out the selling price
Selling an inexpensive product means you’ll need to move many units to make a decent profit. But, selling very expensive products means a longer sales cycle and more discerning customers. Generally, a product price point between $75 and $150 is recommended. As it minimizes the need to find a large number of customers to turn a decent profit. And is still able to give you some cushion for marketing and operation costs.
8.Determine product weight and size
Product size and weight can have a big impact on your sales and bottom line. These days, many customers expect free shipping. And just rolling the shipping cost into your prices doesn’t always work. This means these costs tend to eat into your margins. If you decide to pass the shipping costs onto your customer, you’ll find that the shock of high shipping will likely hurt your conversion rate.
Additionally, if you don’t plan to use the dropshipping model, you’ll need to consider the cost of shipping the products to yourself from your manufacturer, as well as storage fees. If you’re ordering your inventory from overseas, you might be surprised at the costs involved.
Example: There is a popular yoga mat company that sells oversized workout mats. The product itself is a reasonable $99. But, shipping is $40 to Canada and $100 to the rest of the world. For many consumers, it would be hard to justify spending 40% to 100% more for shipping.
9. Is your product durable?
How durable or fragile is your product? Fragile products can be an invitation for trouble. Products that can break easily will cost you more in packaging and you’re bound to have more returns and exchanges.
Sourcing Product Easy company established in 2008, based in Shenzhen city. As a professional China sourcing agent, we buy good products for customers. Over the past 10 years, we have visited more than 1000 factories throughout China. We have huge factories resources and logistic networks. We are good at consumer electronics, shapewear, hardware, etc. . We can provide customized products or print on demand also. We own a fulfillment center in China, provide a one-stop Shopify dropshipping solution.
