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How To Research Your Product Idea

Posted on September 23rd, 2009 in the Market Research Category

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.

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