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35 key points for new product niche evaluation
How to pick the perfect product
philbish




msg:4381000
 6:45 am on Oct 29, 2011 (gmt 0)

Picking a niche physical product for online sales? Here's some key points to evaluate.

  1. Small and light = easy shipping, low warehouse space.
  2. Or at least preference for low weight:value ratio = worthwhile to ship.
  3. Low risk in shipment. Damage, theft, special conditions (flammable etc).
  4. Attached to growing component/auxiliary growth = diminishing cost.
  5. Growing market = demand.
  6. Non-fragile = lower supplementary shipping costs, low defect rate.
  7. Declared product import type = aim for low customs duty.
  8. Multi use cases. Scope to resinate with subcultures, hobbyists etc.
  9. Applications in larger scale/commercial uses.
  10. Target consumer groups are high net worth.
  11. Products likely to strike price with consumers = word of mouth.
  12. Low negative perception on foreign production. Low patriotism.
  13. Good prospects to gain SEO on core product keywords and use cases.
  14. Core keywords have limited issues of clarity or broad keyword competition.
  15. Low cost PPC and advertising opportunities.
  16. Capacity to add value through servicing and brand.
  17. Perceived complexity = barrier to entry, added value to consumer.
  18. Ability to use standardized packing.
  19. Future scope for further vertical integration.
  20. Seeming impossibility for consumer to reach manufacturer directly.
  21. Products evolve over time.
  22. Product design is difficult (or at least perceived to be) but feasible.
  23. Ability to infiltrate social media = create awareness.
  24. Utilizes existing injection moulds/manufacturing equipment.
  25. Low cost/time to tweak manufacturing equipment for customization/product extension.
  26. Low bulk resale value = lower risk of warehouse theft.
  27. Low dominance of existing competitors.
  28. Demand exists for customized larger orders.
  29. Minimal incremental costs (fixed/variable) to facilitate custom order production.
  30. Complimentary product set that can be sold as kit (‘batteries required’).
  31. Manageable defect rate.
  32. Ease to test/eliminate most defects pre-customer delivery.
  33. Product does not perish. Or become obsolete in short term.
  34. Ideally a consumable in the long-term = necessary to reorder.
  35. Suitability for e-commerce. Less suitable for offline/retail (space, niche).


You got any more to add?

 

coopster




msg:4381074
 1:11 pm on Oct 29, 2011 (gmt 0)

Before reading the list bullets I read the first sentence and last sentence. I found the first ten things that came to my mind in your list. I am sitting here pretending like I might compliment the list by offering something you missed and I'm coming up short. I will have to actually step back and brainstorm. Which I find quite nice, actually. Thanks for sharing your research!

HRoth




msg:4381105
 2:49 pm on Oct 29, 2011 (gmt 0)

One of the groups of products I sell fits all of these exactly except "low dominance of existing competitors." The way I have gotten around that is to find/create a subniche. This group of products is what I expect to keep on selling indefinitely. They are all those things on your great list and for me, fun and interesting too.

One thing I think is ideal is the capacity to produce the widget yourself with little investment of materials or property, mostly just skill. Skill makes it difficult for others to make, and you don't have to worry much about the supply route or variations in currency when you make it yourself.

I think the idea of it being small and light is excellent and key for the future of increasing energy costs. Cool list!

dpd1




msg:4381164
 5:56 pm on Oct 29, 2011 (gmt 0)

Yeah, the 'small and light' part is where I blew it... Most of my stuff averages 60". Giant pain in the a**. But then, ten years ago I had no idea I'd be doing this full-time.

I would love to focus on just one segment of what I do, which is stuff that is much smaller and easier to make. But the profits are way lower. I'd have to sell 6 times the volume to be able to cut out the big stuff.

lorax




msg:4381340
 1:19 pm on Oct 30, 2011 (gmt 0)

Nice list.

Luxoria




msg:4381943
 6:46 am on Nov 1, 2011 (gmt 0)

"Future scope for further vertical integration."

Could someone explain this without using jargon, please.

philbish




msg:4381990
 10:05 am on Nov 1, 2011 (gmt 0)

Vertical integration means going further down/up the supply chain. So maybe you start by drop shipping, then you start buying direct from the factory, then you build your own factory. Or you sell to other retailers, who then sell to the consumer. Eventually you cut out other retailers, and become the end retailer yourself.

incrediBILL




msg:4384819
 11:37 am on Nov 8, 2011 (gmt 0)

Vertical integration means going further down/up the supply chain.


To put it in simple terms: cut out some middle-men in the supply chain

vik_c




msg:4384927
 4:21 pm on Nov 8, 2011 (gmt 0)

Very insightful post! A similar post for intangibles, anyone?

Planet13




msg:4385261
 2:37 pm on Nov 9, 2011 (gmt 0)

I once heard David Lee, professor if International Business Strategy at SMU and author of numerous text books on strategy and competitive advantage summarize it this way:

"Sell stuff that people want to buy that no one else is selling."

Anyway, it's also good to remember that "stuff" can be an experience. Take Apple's products:

There were MP3 players before the iPod; there were smartphones before the iPhone (I still have a Palm Treo in one of my drawers around here somewhere); weren't there tablets before the first iPad?

danwhitehouse




msg:4385280
 3:35 pm on Nov 9, 2011 (gmt 0)

Fantastic list. In fact, exactly what I was looking for right at the top!

votrechien




msg:4385389
 11:25 pm on Nov 9, 2011 (gmt 0)

Now all someone needs to do is find a light weight, high priced, non-fragile yet complex, high growth industry yet little risk of obseletion, product :P

Really, great list though. If a niche has many of those things (not necessarily all) it's probably going to do well.

Dinkar




msg:4385456
 2:29 am on Nov 10, 2011 (gmt 0)

Nice list.

How about making a list of niches/verticals that has many of the things from the above list?

Here is one: Web Hosting

PS: Note: it's not physical product :-)

vik_c




msg:4385460
 3:01 am on Nov 10, 2011 (gmt 0)

Here is one: Web Hosting

Web hosting is an extremely competitive service and suffers from a very high risk of obsolescence as more powerful servers, speed and technology come in apart from new versions of operating systems and cheaper bandwidth.

Dinkar




msg:4385474
 4:42 am on Nov 10, 2011 (gmt 0)

Yes, web hosting is an extremely competitive service; but only if you want to compete. Else you can do hosting business as there is NO competition at all.

tangor




msg:4385487
 6:37 am on Nov 10, 2011 (gmt 0)

This bit of humor will likely get nuked... then again, perhaps not: as described list above screams razor blades or condoms... small, light, durable, easy to produce and ship, with a long shelf life. I've been looking for products like that for years!

Biggest problem is finding NEW PRODUCTS (there aren't any), which are not sad versions of what already exist, or do not have a higher cost/expense than existing inventories... said cost which kills potential profits.

HuskyPup




msg:4385527
 11:04 am on Nov 10, 2011 (gmt 0)

No wonder I'm an online failure, I can only answer yes to a couple of those:-(


9. Applications in larger scale/commercial uses.
10. Target consumer groups are high net worth.


Saying that though it's a good list for those who don't actually want to do any work other than play about with computers all day long.

Digmen1




msg:4385647
 7:21 pm on Nov 10, 2011 (gmt 0)

A great list

I have designed and manufactured a physical product.
I saw a similar list a few years ago.
We scored 9 out of 10 for it.
But it has been very hard to generate good sales.

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