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Writer's pictureSkyler Talley

Comprehensive Guide to Selecting a Product for Your Ecommerce Business

Updated: Oct 30


product selection

Choosing the Right Product for Your E-commerce Business: A Masterclass in Not Screwing Up

Let’s be real. Picking the right product to sell online isn’t a game of darts. If you’re just throwing random ideas at the wall and hoping one sticks, you’re setting yourself up for failure. The difference between a runaway success and a dud often comes down to having a solid plan and knowing what the hell you’re doing. So, let’s walk through each step in choosing the perfect product for your e-commerce venture, from the basics of market research to the final decision-making process. Because trust me, winging it isn’t a strategy.


Step 1: Market Research and Niche Identification (a.k.a. Stop Wasting Time on Bad Ideas)

Before you go all in on your product idea, you need to know if there’s even a demand for it. This isn’t a gut-feeling kind of thing. You need cold, hard data. And thankfully, we live in an age where that information is at your fingertips.

Start with Google Trends to track how interest in your product idea has changed over time. If you’re considering selling eco-friendly products, for example, plug it into Google Trends to see if interest is growing or if it peaked in 2017 and then fell off a cliff. Next, head over to Amazon and browse through their best-seller lists in relevant categories. Amazon is a goldmine for figuring out what’s actually selling in real time. Don’t forget to dig into keyword research with tools like Ahrefs or SEMrush. If you find high search volumes with moderate competition, congratulations—you’ve probably found a viable product idea.

Once you’ve established that people want your product, it’s time to see who else is in the game. Identify your direct competitors—the businesses selling similar products—and don’t stop there. Look at indirect competitors too. If you’re selling weighted blankets, remember that sleep aids or luxury bedding companies are also trying to get a piece of the sleep pie. Use tools like SpyFu to analyze your competitors’ keyword strategies or SimilarWeb to understand their traffic sources and demographics. Know who you’re up against and figure out their strengths and weaknesses. If you can’t find gaps or areas to differentiate, you’re probably in a market that’s too crowded.


Step 2: Evaluate Product Viability (Because if You Don’t Make Money, What’s the Point?)

Now that you’ve identified a potential product, it’s time to crunch some numbers. Start by calculating your potential profit margins. This isn’t just about the cost to manufacture the product. Include shipping, packaging, and any other expenses to determine your true Cost of Goods Sold (COGS). Compare this to your selling price to figure out your gross margin. If you’re not hitting at least 30% profit margins, you’re setting yourself up for a world of financial pain.

Don’t just stop there. Supplier reliability can make or break your business. Read reviews, check ratings, and order samples to ensure your suppliers are dependable. Unreliable suppliers don’t just give you late shipments—they ruin your reputation with customers.

You’ve got your product idea and a reliable supplier. Now, you need to make sure your product stands out. This is where your unique selling proposition (USP) comes into play. Look at the features you’re offering and your branding. If your competitors are all playing it safe, take a bold stance with your branding. Give people a reason to choose you over the dozens of other options on the market.


Step 3: Validate Your Product Idea (a.k.a. Make Sure People Actually Want to Buy It)

You’ve done your research and calculated your numbers. But even the best ideas can flop if they don’t resonate with customers. That’s why you need to validate your product before you pour all your time and money into it.

Crowdfunding platforms like Kickstarter and Indiegogo are fantastic for gauging interest. Present your product idea and see if people are willing to open their wallets to back it. If nobody wants to invest even $10, that’s a pretty clear signal that you’ve got some rethinking to do. Another way to validate your idea is through pre-orders on your website. Create a landing page with all the key product details and offer a pre-order discount. Promote the page through social media campaigns or email marketing and see if anyone bites.

Surveys and focus groups are another underrated method. Sometimes, a little direct feedback is worth more than months of analytics. Use SurveyMonkey or Typeform to send out questionnaires to potential customers, or conduct focus groups to get in-depth feedback. Just remember, people lie in surveys, so take it with a grain of salt.


Step 4: Make the Final Decision (If You Don’t Know by Now, It’s Time to Rethink Everything)

By now, you’ve done more research than a grad student working on their thesis, but the final decision still needs a few more considerations. Assess the risks, starting with market saturation. If the market is already packed with established brands, you’ll need to have a damn good reason for people to choose you. Supply chain issues are another risk to keep in mind. If your product relies on overseas manufacturing, political instability, pandemics, or shipping delays could wreak havoc on your business.

If you’re feeling confident, it’s time to develop a business plan. Start by defining your business model and revenue streams. Are you dropshipping? Manufacturing? Wholesaling? Each model has its pros and cons. Then, outline your marketing plan to reach your target audience. This is not the time for vague ideas. Get specific with channels, budgets, and messaging. Don’t forget to make realistic financial projections. Know your costs, potential revenues, and margins so you can plan for growth.


product selection

Test the Market (Because Nothing Survives First Contact with Reality)

You’re almost there, but you can’t go all in without a pilot launch. Release a small quantity of your product to test market response and see if all your research holds up. This pilot phase lets you track metrics like sales, customer feedback, and return rates. If people are loving it and your return rates are low, it’s time to scale up. If things go south, take it as an opportunity to refine and iterate rather than a sign to give up.


The Bottom Line: Don’t Wing It, Be Strategic

Choosing the right product isn’t about getting lucky. It’s about being methodical, strategic, and knowing when to pivot. From market research and product viability to validation and execution, each step matters. If you cut corners, you’re only hurting yourself. So, put in the work, make data-driven decisions, and set yourself up for e-commerce success. Your future self will thank you.

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