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E-commerce platforms have become a popular avenue for entrepreneurs to start their online businesses. However, deciding what products to sell on your Shopify online store can be a daunting task. To help you make an informed decision, here are five main criteria that can assist you in selecting the best products to sell online.
Popularity and Demand
Understanding the popularity and demand for a product is crucial in estimating its revenue potential. The size of your market and the price you earn per sale determine your potential sales revenue. Therefore, it is essential to conduct market research to verify product demand and popularity with specific target audience segments. Utilize resources such as your internal sales data and analytics, customer surveys, market research reports, and Census Bureau data to assess the demand for the product.
Profit Margin
While popularity and demand are important, it is equally essential to consider the profit margin of a product. Revenue potential alone is not sufficient, as you need to cover the costs of producing and selling your goods through your online store. Calculating the profit margin involves evaluating the difference between your sales and costs. Look for products with low production costs relative to the selling price to ensure a good profit margin for your online store.
Seasonality
Another factor to consider when selecting products to sell online is seasonality. Understanding whether a product has any seasonal sales peaks is important in estimating its annual sales potential. Seasonality affects the volume of your annual revenue from that product and determines when cash from sales will be coming in to cover your operational costs. Consider whether your product will be in demand year-round or fluctuate in different seasons. Adjust your marketing strategy accordingly, selling different products at different times of the year to compensate for seasonal cycles.
Competition
Even if a product has high demand, intense competition can make it challenging to make a profit. Evaluating your ability to sell a product in the face of potential competition is crucial. Conduct market research to identify and analyze your existing competitors and gauge how difficult it would be to break into the market. Analyze how your competitors position their products and the features and benefits they emphasize. Consider the uniqueness of your product and whether it brings any differentiating features or benefits.
Your Product Knowledge
To successfully sell a product, you need to have in-depth knowledge about it. Understanding your product well enough to present its benefits to your target market and persuade them it meets their needs is essential. Review your product’s features, applications, and benefits, and align them with your target audience’s wants. Gauge whether you have the knowledge to compete successfully in the space and promote the product through your online store.
In conclusion, selecting the best products to sell on your Shopify online store requires careful consideration of various criteria. Popularity and demand, profit margin, seasonality, competition, and your product knowledge all play a significant role in making an informed decision. By thoroughly evaluating these factors, you can increase your chances of success in the e-commerce industry.
Bold Tag: What Products are Known to sell best on E-commerce Platforms
Source: https://www.scrollreads.com/
