What's the perfect product?
Finding the right product to sell can always be a daunting endeavor. Picking the wrong product, while not necessarily detrimental to your business, always comes as a bit of a downer, and can affect the future of how you run your business.
On the other hand, a successful product choice will not only earn you profits, but will also have a wonderful effect on your business ego. Happy and confident business owners are typically better at what they do.
The #1 piece of advice you can get is to sell what you know. However, sometimes what you know falls into a niche that is either over-saturated with other retailers, or is a product that people simply aren’t interested in. The trick is to know what types of products are hot sellers.
Take a look at this info graphic from MemorizeMethods that shows current buying trends here in the U.S.
Look hard, think twice
So how do you interpret this data and (more importantly) what do you do with it? According to the U.S. census, electronics have the highest percent of e-commerce sales, followed closely by music/video.
At first glance, you may think, “That’s what I should be selling,” and looking at the numbers, you would think that’s a no-brainer. Unfortunately, many new startups have met a quick end by trying to jump into the electronics market.
There are so many retailers selling electronics that it’s hard to compete. One of the few ways you have to stay ahead of the competition is to lower your prices. With profit margins so low for electronics (5%-10%), you’ll quickly be lowballing your product and start losing money.
The better option
If you take another look at that infographic, you’ll notice that while electronics and music/video have the highest percentage of sales, they’re not making the most money. Clothing has snagged first place for most dollar amount spent.
Clothing, cosmetics, and home/garden supplies are extremely good markets for you to sell in. The Bureau of Economic Analysis shows that the average household spends $331 a month on these types of products.
So how do you work with that? This isn’t secret information by any means. Many e-commerce retailers are selling--and profiting--with products that fall into these categories. What can you do to get and stay ahead of the competition? Read on!
This is where you get to know your product. The type and quality of research you do in this phase will determine how successful you are when it comes to selling your product.
Clothing is a hot seller, and for good reason. Everyone needs clothing. Families with children will be buying a lot of clothes--even yearly--to keep up with their growing kids. Keep in mind that retailers typically sell their clothing for twice as much as they paid for it. This gives you a lot of freedom to play around with price without having to worry about hurting your profits.
Another category that sees a lot of success is accessories. Hats, gloves, sunglasses, and other seasonal gear are always in demand. What’s more--styles are always changing. With drop shipping, you’ll always have the upper hand because you’ll always have access to the newest products without ever having to worry about overstocking. Many brick-and-mortar stores get hit hard when a quick style change catches them by surprise. They’re left with inventory that nobody wants. For you, changing your inventory is as easy as updating your website.
Furniture. Yup. You heard that right. Furniture sells extremely well. The biggest reason being shipping costs. Since the furniture is coming straight from the wholesaler, customers avoid marked up shipping costs that are usually tacked on by the retailer. Ergonomic office chairs, beds, and outdoor furniture (seasonal) all sell extremely well.
Know what you sell
This sounds a bit redundant, doesn’t it? That’s because it’s one of the most important parts of selling your product. Now, while what you initially know may not sell (as was stated at the start of this article), that doesn’t mean you can’t get to know new products. Do research. Spend time getting to know what people want to buy. When you find a niche group, invest effort into becoming an expert on it. The truth is, you can sell just about anything with drop shipping so long as you do sufficient research. Take these ideas into consideration as you find a product that works best for you and your customers.