How to choose a great product or service to sell: An essential guide
Launching a business isn't easy. A heavily saturated market, fierce competition, and increasing expectations for customer satisfaction are just some of the challenges a start-up company can face.
But the biggest test for an aspiring business owner is to find a product to sell and base their business on. Without the right offering, how can they expect to attract customers and turn over a profit?
To help you find that gap in the market, our handy guide to choosing a great product or service to sell will walk you through everything you need to know to prepare your business for success.
What does it mean to sell a product?
Put simply, selling is the exchange of money in return for a product or service. Selling can also include the process of negotiation: where a seller persuades a potential buyer to buy their product by showcasing its benefits.
This sales negotiation step is part of the marketing process. For larger businesses with established audiences, selling can be a lot easier as potential buyers already have the information they need about a product or brand, and an established level of trust so they don’t need to be convinced to buy.
Small businesses or start-up businesses might need to successfully market their offering to convince people to purchase. For more help on how to promote your business, take a look at our guides to search engine marketing and advertising.
What are the types of products you can sell?
Whether you’re looking for a physical product or a service to sell, your offering can be split into two categories.
The types of products that you can sell are:
Commoditised products are everyday, popular items that are consistently in high demand. They can be physical — like food, clothing, toys, etc — or intangible, like insurance.
Commoditised products make up a large percentage of overall sales as they tend to cover essential things that everyone needs.
Niche products are things that are targeted towards a specific audience and aren’t relevant to everybody. These can include unique or handmade products like handcrafted jewellery, personalised phone cases, and custom-made wellbeing products.
Niche products are often made in small quantities or on-demand, as opposed to commoditised products which are usually mass-produced. As there is a smaller amount of niche products, their demand can be greater than supply — causing their value to be higher than some commoditised products.
How can you choose what products to sell?
If you don’t already have a product in mind, choosing one that’s not already popular or competitive can be difficult. Here are some steps you can take to find that star item with lots of potential.
1. Identify or create a product that solves a problem
All good business products should aim to solve a customer’s problem. This is an effective way of ensuring that people will want whatever you choose to sell.
As a company, you should research what issues an audience group is facing so you can develop a solution for that problem and market it to those who will find it useful.
The key to identifying these problems is to understand what common troubles customers are facing with an existing line of products. For example, if people are struggling to find a vegan alternative for a specific type of food or a lip product that complements certain skin tones.
This knowledge puts you at an advantage as you can then create that product that’s missing from the market and satisfy customers.
2. Bounce off a product that you’re passionate about
Sometimes the best products are a labour of love. The road to setting up your business can be incredibly tricky, and, at times, overwhelming. But, selling a product that you’re passionate about and have an invested interest in can help to keep you motivated — even through the really difficult times.
On top of that, genuinely believing in your product can speak volumes for your business’s branding. Your passion should shine through all your customer touchpoints, creating a brand ethos that’s meaningful, authentic, and makes people really believe that you want to help them.
3. Find a good product with branding potential
As well as helping to build authenticity, a good product should resonate with customers in a way that makes them feel included.
You should consider how you can build your brand message around your product to make it memorable and stand out from your competitors. Essentially, you want to keep your customers coming back to your business.
- How is your product positioned? — You should make your target audience feel like your product is accessible to them.
- How will you address your audience? — Engage with your audience in places that they frequent, like their favourite social media platforms, and speak to them in a way that’s friendly and welcoming.
- How user-friendly are your channels of communication? — Think about the colours, images, font, and design of your branding and how it’s applied to your website and social media channels. [Text Wrapping Break]
4. Capitalise on trends early
One of the most lucrative ways to establish your business is by taking advantage of emerging markets and trends – but, it can also be very risky.
To turn a trend into a successful business plan, you need to be fully immersed in the market that you want to enter and stay up-to-date with any new launches. Before others can capitalise on them as well, you need to quickly launch your business before they grow too popular.
Jumping on trends takes a lot of industry knowledge and requires an extremely fast pace. It’s also important to recognise that a lot of businesses based on trends don’t last as long since trends have a tendency to fall in and out of popularity. So, make sure you think every choice through fully before you commit.
What is a product opportunity gap?
A product opportunity gap is when there’s space in the market for a product that solves a consumer’s problem, but the product doesn’t exist yet. It might also be the case that the product exists, but the business isn’t able to push it out to the wider market. This is when your business can step in to fill the gap.
Let’s take a look at Dollar Shave Club for an example of how a business spotted a product opportunity gap and made it work for them
In 2011, Dollar Shave Club launched as a subscription-based razor retailer with the aim of making men’s grooming products accessible and affordable to all. The CEO created a business model that operated on a subscription basis, easily solving common problems that men face when purchasing razors: receiving a fresh, new razor that they could rely on on a regular basis. This was back before subscription boxes had exploded in popularity and the idea of getting a replacement razor delivered straight to your doorstep was truly innovative.
Now, Dollar Shave Club is a brand recognised globally and is worth over $1 billion.
How do you find the market potential of a product?
Once you have a product or service in mind that you’re interested in selling, you need to work out its market potential.
Essentially, the market potential is the total demand for a product in a specific market at a specific time, and it’s often measured by sales volume or value. It represents the total amount of interest that there could be for a product. For example, the market potential for a brand new pet toy could be worth £500,000 in sales each year. In terms of sales volume, this same product might be worth 50,000 units per year.
The market potential is affected by various factors like:
- Market size
- Market growth
These can change constantly, meaning that the market potential of your product will also change.
How do I sell online?
Launching a new product online can seem daunting, but to make it a smooth and successful process, here are some pointers to help you along the way.
1. Do market research
There are three main benefits to market research:
- Learning more about your target audience – Getting to know who you’re going to be selling to is crucial when you start to develop your messaging and marketing strategy.
- Understanding their behaviours – Finding out how they interact with brands and using this data to influence your customer journey can help to increase conversions.
- Finding new business opportunities – Your market research might uncover that you’re missing an opportunity to help increase sales. These could be things like introducing new product offerings or implementing subscription models.
2. Identify your customer base
If you’re serious about selling your product, knowing who you plan to sell to is key. This group is also known as a customer base or target market.
Identifying your target market means you can work out buyer demographics and use these to your advantage.
For example, if you know that your customer base is predominantly female, under the age of 40, and lives in Europe, your marketing can be much more targeted – and therefore, likely to convert into sales.
3. Finalise a product
You can’t run a business if you don’t have a solid product or service to sell, so make sure that you’ve put in the work to make it ready to bring to market. This process is also known as product development and involves:
- Brainstorming ideas for a potential product
- Conducting research to validate demand for your product
- Sketching out what your product will look like
- Creating a prototype of your product to use as a sample
- Sourcing materials and a means of mass-producing your product
- Working out the total manufacturing cost of your product to determine a retail price and profit margin[Text Wrapping Break]
- Research which eCommerce platform would be best for you
As a business owner in the current economic climate, setting up an online store to house your business is imperative for making your offering accessible to a wider audience.
Businesses can use an eCommerce platform to:
- Run their website
- Sell products online
- Manage orders
- Deliver targeted marketing
It’s also a useful way to accurately track sales, which you can use the learnings from to optimise your marketing strategy later down the road.
There are many different eCommerce platforms to choose from to host your website; they each have their benefits and limitations, so it’s recommended to take the time to research each platform and learn which features will be useful for your business.
To learn more about finding an eCommerce platform that’s right for your business, take a look at our handy guide.
4. Create high-quality product content
Once you’ve laid the foundations for your online store, it’s time to look at the finer details. Your website should be easy to navigate so potential customers can quickly find what they’re looking for.
And after they’ve found a product, they need to be able to learn everything they want to know about it in order to make an informed decision. In other words, your website should arm them with the relevant information that encourages them to buy.
To do this, you need high-quality images that accurately represent your product and detailed product descriptions that answers all of their questions.
5. Create a strategy to put in place
When your product and online store are up and running, you can start to spread the word about your brand to attract potential customers to your website.
For this, having a precise and targeted marketing strategy will make all the difference.
Think about how you want to raise awareness for your product, what incentives you can offer first-time customers, and how to make your brand stand out from the competition.
What is competitor analysis?
Unless you’ve developed a one-of-a-kind product, you’re going to have to compete with other brands that are selling products similar to yours.
The downside to this is obviously that you’re going to have to share the same customers and vie for their attention. But, the upside is that your competitors will already have sales data and marketing strategies in place that you can learn from.
This is called competitor analysis and it’s an extremely useful strategy for assessing the strengths and weaknesses of your competitors. It uses other businesses' learnings to spot which tactics are likely to work for you and saves you time by avoiding pitfalls that others have encountered.
What tools can I use to gather competitor data?
Effective competitor analysis is carried out using data to support your findings. Here are some tools to help you gain product data from your rivals’ websites:
- Ahrefs – Ahrefs is an all-in-one toolset that offers an in-depth analysis of your competitors’ websites. It can show you the most popular products and pages on their websites.
- AdPlexity – A research tool for eCommerce websites that tracks other brands’ most profitable campaigns and sources of traffic.
- AmazeOwl – AmazeOwl is a product research tool specifically designed for finding product opportunity gaps on Amazon. It lets you scour through millions of items to help you identify promising potential products.
What products are in high demand?
If you’re an aspiring entrepreneur looking for a product to base your business plan on, capitalising on trends can be a lucrative strategy. However, trends move fast and the economic landscape and consumer demands are always changing.
That’s why selecting a commoditised product and identifying ways that you can execute it better or more efficiently than current brands, can be the way to go.
Here are some products that are consistently in high demand:
Apparel is a wide-reaching industry with lots of niches, from activewear to occasionwear, meaning that there are a lot of potential sectors to choose from to specialise in.
With popularity comes competition, and the clothing industry is notorious for being a fiercely saturated market. Finding a unique niche within the apparel industry and having previous clothing eCommerce experience is strongly desired if you’re looking to launch a new product in this sector.
2. Eco-friendly or sustainable products
Sustainability has been posed as a trend in recent years, but unlike other trends, it’s set to stay popular for the foreseeable future. This makes it a solid choice for potential new businesses.
Authenticity is crucial, however, and any business looking to infiltrate this industry must be able to prove that sustainability is a genuine ethos and passion for their brand. Touting the eco-friendly message for ‘trendy’ purposes is easy to spot and instantly paints brands as disingenuous.
3. Beauty and wellbeing
The cosmetic and wellbeing industry has shifted over the years to focus on natural ingredients and sustainable practices, which aligns with the rise in eco-friendly products.
And like before, authenticity and a genuine dedication to supporting sustainability is a must.
4. Home furniture
Furniture sets itself apart from other high-demand products in that these items tend to see less overall sales but their higher price point can make their profit margins much bigger.
The biggest issue you might face if you’re looking to enter this industry is finding a vendor or manufacturer. Competitive pricing will always be a big factor to consider, but the quality is vital when customers are purchasing at a greater price point.
How to successfully choose a product to sell online
Finding that gap in the market and the right product for your brand is instrumental to your business’s success. What you choose to sell will determine a lot about your company, from how you conduct marketing to who you need to be marketing to. Having a proper plan in place to find that missing opportunity gives you the best start to launching a successful marketplace.
Get in touch with the Bionic team to learn how we can help you save time when sorting your business essentials, meaning you'll have more time to build your business. And you can learn more about business finance here.