Market size can define the number of potential customers you can sell your product to. At the product research stage, you can probably get a good idea of market size with educated guesswork and research.
If there are many competitors in the market, that’s a sign the market has been validated. Next, however, you will have to determine how to differentiate your brand and products from the sea of competitors to carve out your own spot.
Riding a fad can be dangerous. A trend can be lucrative. Stable markets are safe, and growing markets are ideal. Understanding where your product and niche lie can significantly affect your success or failure.
You may develop a blind spot for insights from consumer behavior offline. Hence, it becomes necessary to call attention to assessing your product's competitive landscape outside the internet universe.
You don’t need to go into great detail defining your exact customer persona at this point. Still, you should know the type of customer you would likely be selling to and their online purchasing capabilities and behaviors.
When you begin selling online, you’ll quickly find that lots of small fees eat into your margins. A solid initial markup will provide you with the necessary cushion to absorb these costs.
Product size and weight can significantly impact your sales and bottom line. These days, many customers expect free shipping, and just rolling the shipping cost into your prices doesn’t always work.
Fragile products can be an invitation to trouble. These, too, will eat away at your margins, and you may need to mark up your selling price higher to absorb any losses that may occur.
Businesses with seasonal demand can suffer from inconsistent cash flow. Some seasonality can be absorbed, however, an ideal product will have consistent cash flow almost all round the year.
Consumers actively seek solutions online, which means that a market is readily available if your product directly addresses such needs. This consumer behavior also applies to the pursuit of passions.
Having products that constantly need to be changed or refreshed can be risky. These types of products run the risk of not selling before turnover. So before jumping in headfirst and selling a product with regular turnover, it’s vital to know your turnover schedule and plan accordingly.
Having consumable or disposable products makes selling to the same customer over and over again more natural by essentially putting a time limit on the product’s life and giving the customer a reason to come back to you for replenishment.
Perishable products are risky for any business, not just an online business. Moreover, since highly perishable products require speedy delivery, shipping can be costly.
Restrictions and regulations on your product and niche choice are annoying at best and crippling at worst. So before you move forward with your product idea, you’ll want to ensure there are no regulations or restrictions on your product selection.
Thinking about the future and growing your business is challenging when you’re still in the launch phase. However, scalability should be considered and built into the business model immediately.