Best Products To Sell Online

By Angus  |  21 Nov 2014 16:00:00

Best Products To Sell Online

As arguably the most important factor in the success of your ecommerce venture, choosing which product/s to sell requires the consideration of many variables.

Whether you know that you want to get into ecommerce but have not yet decided on what to sell, or if you already have a product in mind but want to make sure that it is a good choice before investing, the purpose of this post is to highlight the factors you should be considering.

1. What is the size and competitive landscape of the market?

There is definitely a balance to be achieved here. Whilst many merchants will be attracted to large established markets, normally by the obvious level of demand coupled with high margins on the chosen product, the level of competition here is often too great.

Most of these markets have a handful of “Powersellers” whose market position and ultra-low cost per unit are too entrenched to be able to compete with. There is a caveat here in the form of differentiation which I shall come on to later, but as a rule you should aim for a bigger share of a smaller but consistent market.

Small and niche is good, however depending on your ambitions you will need to be sure that there is a sufficient level of demand to achieve your desired level of sales. Google’s Keyword Tool is useful for getting an idea of the level of interest in a product and will be equally useful when you come to choosing which phrases and words you’ll use to advertise your product.

The real benefits of niche markets though is the relatively low cost of acquiring customers through search engines and the opportunity to become an established market leader through strong branding and differentiation, neither of which of are as expensive to do as you might expect.

2. What is the overall cost of bringing your product to market?

The beauty of ecommerce is the low start-up costs compared to a bricks-and-mortar operation; however it can still be easy to underestimate all the costs involved whilst still at the planning stage.

A great product to sell online will have the characteristics of being small and durable, technically simple and doesn’t require you to hold a large range of varied stock.

Small and durable are obvious. Larger products will cost you substantially more to import and store, and the shipping costs as a proportion of the overall cost to your customers are likely to be off putting. Pick a product that is too fragile and you’ll potentially be writing off half your stock before you even start selling.

A product that is technically simple just means there’s less risk of things going wrong. This will reduce the time and money you spend on warranties, refunds and support and should also leave you with more satisfied customers.

Finally, focussing on a small range, if not just one, profitable product to begin with will keep your sunk costs down and allow you to spend your money on making what you are selling as attractive as possible through quality and differentiation.  

3.    For how much can you realistically sell it for and is this an acceptable profit margin?

The answer to this question will depend on both your competitors and your target customers.

Remember that your competitors may be offline as well as online, in which case for people to buy from your website you will need to undercut the high-street including shipping costs. Online you will be able to get a good idea of the price you will be able to charge by having a look at what similar products are going for on EBay etc.

Ideally your product will have a unique selling point which appeals to your target customer so that you don’t have to compete solely on price. As a small business, by demonstrating a superior understanding of your target audience’s preferences than your competitors you should be able to sustain a healthy profit margin, as well of course as earning fans and advocates for your brand.  

With regards to what is an acceptable profit margin, this is obviously a personal question to some extent, however it is generally recommended to go for products that you can sell with a 100% mark up from the unit cost.

You also want to be selling a product with a reasonable list price so that you are not relying on a huge number of sales to make a decent profit, but at the same time products which are very costly will generally sell slower and require a greater level of support from the merchant to reassure the purchaser. Whilst it’s up for debate, over £5 and under £100 has been suggested and seems reasonable.