Where does your product fit in?
In the previous blog, we gathered our research. Using your research, you now need to make a mind map of the benefits and the keywords people searched for when they looked for the product/s or a product/s similar to yours.
Note: If you want more information for your mind map, another way of finding out how people use/could use the product is by researching hashtags. Hashtags can be researched on Instagram, Twitter, Facebook and other social media networks. The search results of hashtag phrases related to your product or of your product can help you see what people are saying about the product, their satisfaction, their dissatisfaction, what it might be missing and their uses of the product. Hashtags normally contain Photos that can help you as well.
Note: How do you research hashtags? On the above social media platforms you can enter your product name with a # (hashtag) in front of the word (with no spaces between words) like in the examples below:
When drawing your mind map of your product and its uses, you will see what the benefits of your product are. Here is where you need to find a few potential selling points of your product, i.e. how can it be used and in what way it will benefit a consumer. This will help you create your target market and potential buyers, i.e. establishing if there is a market for the product.
Let’s go through the following questions:
Where does your product fit in?
Does it solve a passion or a problem? (Compare the identified benefits listed on your mind map) What will your selling point be?
Who will your suppliers be? Where will you be able to obtain your product or the raw materials to produce the product? Find a place that can supply your product for you if you are not planning on making it yourself. When finding a place to supply your product make sure of its credibility and whether they can provide you with a quality product. The biggest online store representing wholesalers across the world is Alibaba. Look for similar wholesalers where you can buy your product for a reasonable price.
Once you have found a couple of places where you can get your product from, you will need to ask the following questions:
Must it be imported or can it be obtained locally? How much will the process/ transport cost be to get the product to the client (how much will it cost you to obtain the product and then keep it in a store or, when selling online, to deliver it to a customer?). If the product is to be shipped: is it fragile or can it easily be shipped? Fragile products are difficult to ship and shipping can cost more.
When figuring out how much it will cost to get your product to the consumer, establish more or less what potential profit you could make. When settling on a potential asking price, you need to decide whether your selling price will be affordable for consumers. Affordability and willingness to buy for that price goes hand in hand when assessing whether a consumer will buy the product. Research what your competition is doing.
When you determine what the product’s cost price will be, make sure that you explore all costs involved e.g. tax, packaging, wrapping, shipping, custom duties, credit rates, etc.
Do research on the price that other companies are selling the product for. This you can find out by phoning or emailing companies that sell the same product, visiting their online shop or going to their local store. This will help you determine if it is worth selling the product or not.
To find places that sell your product, you have to refine your search on Google by using more keywords to define your product and location for example Google: buying coconut oil centurion/South Africa (location will depend on the market you want to reach).
This is also a great way to find out if your product is locally available or where it is available in your country. This information will help you determine if there is an opportunity to sell your product in your local market or not. Remember not to stop at the first page’s search results; you need to search further on the rest of the search results pages.
What is the product’s market size? This is hard to determine, but you can use Google Trends and Google Adwords Keyword planner tool to establish the demand in the area you want to target. Here you need to explore how narrow or how broad you can make your market niche, e.g. women between the ages of 20-45 with long hair, or, even narrower, women between the ages of 20-25 dry long hair.
At this point you just need to explore the possible consumer market you want to enter (your niche market).
What will your product turnover be? How many products do you need to sell to cover your costs? Does your product have an expiry date? How often will you need to replace stock that has expired and has not been sold? This will have a big impact if the product does not sell, and you will have to establish what your potential loss will be.
Is the product compatible with the country’s restrictions and regulations?
You should research whether your product might have any restrictions or regulations. When importing a product, make sure that the product has no restrictions or regulations in the country you are importing it to or the country you are distributing it to. You can find this information by phoning the customs and border control services of the country you want to import from or distribute to. This can be a big issue for any product, especially food, liquids, chemicals or animal products.
Now you can narrow down your potential product list. Choose the products that are the most likely to sell and easiest to distribute when you start out. In our next blog I will help you to take the process further…