There are many things to consider before deciding on which products you are eventually going to sell Online. Can you make money off the products? How much do I need to sell to reach profit goals? Can they be easily sold Online? Are they legal to sell Online? Do I have interest in the products? These are all things that should be considered before you actually invest time, effort and money into a product or niche industry to sell in.

It is important, especially for new merchants, to start off slowly and really plan things out well when determining your product or niche market. Typically, finding your product niche begins with determining whether or not the product is a good fit for you personally. You may initially get into selling something solely for the profit that can potentially be made, but eventually you will need to know about the products inside and out. If they are not products that personally interest you it may cause issues later on during customer service and marketing processes. It is best to find a product that genuinely interest you or that you have passion for, that way you won’t have any issues spending the time it will take learning everything there is to know about what you sell, who you sell to and who is competing with you. The product should fit well with you, but at the same time you should fit well with the product or niche industry.

Some basic questions to ask yourself and consider when attempting to find products to sell…

• Do you posses skills surrounding any personal interests or hobbies that can easily be applied to an Online business idea?
• How much do you know about the personal interests or hobbies you are thinking of turning into a business idea?
• Are you a good researcher, capable of spending quality time and effort to adequately educate yourself about prospective products or industries?
• Is there anything about your current job or employer that might give you insights into certain products you may wish to sell?
• Do you already posses special knowledge about acquiring or sourcing a particular product that might help you to remain competitive in a niche market?
• What is the potential lifespan of the product or industry idea you are exploring (is it a trend or fad, will it be sell-able for months, years, decades, etc.)?
• Is the potential product or industry idea you are exploring seasonal, or will it be able to sell throughout the entire year?
• Can the potential products be dropshipped, stocked, handled, packaged and shipped easily, with as little extra hassle or extra expense as possible?
• What is the potential profit margin expected for the product ideas you are exploring and is there any room for future price negotiations?
• Who is your target consumer market and what are some of the different types of people that are most likely to buy the products you will potentially sell?
• How competitive is the potential product market or industry, is there already many people selling the same products or to the same consumer types?
• Are there unique and innovative ways to market the potential products or within the product industry, are there ways to market them that are different than current competitors?
• Is the potential product or industry something you truly feel passionate about, do you have a genuine interest in the products, market or consumers you are targeting?

Many of the earliest Online retailers found success in selling products that aren’t too much to ship (heavy, bulky, etc), such as CD’s, DVD’s, t-shirts, shoes, jewelry and other small, high-profit, easy to ship items. Although many of the most popular items with a high cost-to-shipping ratio are within saturated markets, there still are some very good product niches with great cost-to-shipping ratios.

Although there are markets for items such as large screen televisions, office equipment and furniture, they are bulky and cost more to ship, meaning there will be issues to overcome in these markets. Online retailers that sell items with low cost-to-shipping ratios have to overcome more than a merchant who doesn’t have to take as many planning steps or measures to get their products out to consumers. Either way, think about possible kinks before jumping into a niche head first, in the end, it’s going to be you who has to work out the issues in whatever product you decide to sell.

Some basic steps you’ll need to take when trying to find products to sell Online…

Learning About Products:

There are three main aspects to learning about the products you are going to sell. The first is knowledge you already posses surrounding the products, the second is knowledge you gain upon deciding what to sell and the last aspect involves continuing to learn more about what you sell. As a matter of credibility and in order to bring your business to it’s full success potential, it’s important to know your products inside and out. it will help you when dealing with customers and any vendors or distributors you may have to negotiate or network with (so you don’t get cheated on quality or talked into higher prices due to lack of product knowledge). Other than helping with customer relations and vendor negotiations, product knowledge should also help you to maintain your edge over competitors (once you establish an edge of course). That’s one reason why ongoing or continuing your education as your business grows is so important.

Use the Web as an information resource, read books, trade journals and print publications or white papers, learn as much as you can about your product and your market. There are also more traditional ways to increase product knowledge. You can attend school (college, university, online), take correspondence courses. You can use social networks and communities or blog and forums. The methods you use to acquire more product knowledge are up to you and depend on your personal time limitations or budget. It really doesn’t matter how you get your knowledge, just keep improving on what you learn and be sure that the sources you use are credible and can be trusted as a source for good information.

Determining Product Demand & Availability:

It is important to know whether or not your products are in demand and that you will be able to find sources for the products you intend on selling. Knowing about your intended products consumer demand and source availability can save you time, hassle and potentially keeps you from jumping into an industry that may end up failing due to source limitations or lack of consumer demand. Try to learn and understand anything you possibly can about who your intended consumer audience is and brainstorm possible sources for your product. In other words, think about who your target audience is and ways in which you can acquire the products you hope to sell. Knowing and understanding these two things can make the difference between success and failure, and will generally save time and money in the process.

If the intended products are something that is already manufactured, it may be easier to find sources and generally are in high demand, especially if they are products that have been made and sold for a longer period of time. If the product you hope to sell is an original idea or invention, you will still have to find sources for parts or other necessary goods required to make the products. You may possibly even wish to become your own manufacturer or establish a relationship overseas (both require more knowledge, budget and time).

The sources you research for products that already exist should offer the items at a price which will enable you to remain competitive with others who may sell the same or similar products. Find the best possible prices from as many different sources as possible and narrow you choices from there based on time in business, track record, customer service, shipping time, bulk discounts, etc.

You will also need to know information surrounding the consumers who may possibly be interest in the products you hope to sell. Generally, if you sell products that very few others are selling, you are limiting your competition, however there may be a much smaller demand for the items. This is why it’s so important to find out everything you can about your target audience and consumer demographic. Knowing your potential customers not only helps when finding products to sell, it also helps during site design processes and customer service interactions.

Once you have learned more about the products demand and availability it will allow you to dig deeper into the process in which your products are manufactured, distributed and sold to retailers like you. You should research your industry suppliers to find out who they regularly sell to and how the process works. Generally there is a chain starting from the manufacturer or distributor. They then sell the product to other wholesale suppliers or retailers. It is OK to buy from suppliers or wholesalers, especially at first and until you get a little time under your belt in eCommerce, but you should make it your goal to find out who the suppliers are buying from so you can purchase directly from the source. As mentioned, at first you may bot be able to get the prices you originally had hoped for, but you will establish certain relationships with vendors higher up the chain. Having these relationships is a great start to cutting out middle men and developing your own supplier relationships or lead sources.

Finding Product Sources:

One method for sourcing products is by using drop shippers. A drop ship relationship occurs when a merchant receives an order and then directs it to a wholesaler or distributor who then ships the item directly to the customer. By drop shipping products you can potentially avoid the hassle of handling, packaging and shipping the products yourself, however it may be more difficult to establish a niche using the drop shipper method. We have covered more on getting product drop shippers in a future article within this series.

Another method for product sourcing is by establishing manufacturer direct relationships. Relationships with manufacturers occur when a merchant has contacted and negotiated prices for items made by the manufacturer. Some manufacturers will drop ship, others require you to purchase and inventory the products yourself. It can be an extra hassle finding the warehouse space and getting the handling or shipping process down, but dealing with manufacturers does make it easier to establish an Online selling niche. We will discuss more about manufacturer relationships in a future article within this series.

Lastly, you can source products by manufacturing items yourself. This requires the most work, planning and knowledge to setup properly. Using a manufacturer of your own or becoming your own manufacturer occurs when you establish a manufacturing relationship overseas, within your country of origin or rent your own space and manufacturing plant. Manufacturing overseas can require you to overcome language barriers, setting up your own shop can require pre-existing capital or funding. We will discuss more about becoming a manufacturer or outsourcing it overseas in a future article within this series.

Trying to choose the right product can get tricky, but the bottom line is to choose a product that is the right fit for you personally and fits well within your business goals. Choose a product that is affordable and accessible to you. Keep in mind, you’ll have to create the market demand and niche for whatever products you end up choosing.

This article is one of several within our Start to Finish eCommerce Guides.