Today, it is becoming very popular to use internet as the platform for business, even companies with physical stores try to have an online presence, just because the benifits are so vast. But when it comes to people who want to start a new business online, it can be sometimes confusing to figure out what to sell or which market to target. Here, we give some tips which may help you make up your mind.
Target a Niche
It can be better to be a dominant company in a small market than a tiny competitor in a highly competitive market. Targeting a niche means to carter to a smaller and more refined group of customers with spcialized wants', it can give you the oppertunity to charge better prices and have less competition. As the market segment is well defined, it makes it easy to create sales strategies and handle marketing effectively. So, if you can find a product or service catering to a niche, it can be a profitable area. A good example of a niche can be Northtwine
Choose a product with a large potential market size
This it the opposite of targeting a niche. You can also go for a product or service that can cater to a larger market, but here it is very important to do market analysis and see how many competitors you could have, which one has the biggest market share, what are their core competencies and how can you be better. Once you have analysed the market and feel you can succeed, then you need to come up with a strategy that will define your product and service and show your unique selling point (USP). Cost leadership and differentiation are examples of two strategies used by busnesses to compete in the market place.
Choose a long-term product
Sometimes people cash into a product which is a Fad, so they only have short term asperations. It is important if you want to have a long term stable business, that you go for a product or service which has a long life and is not here for a few months time. It also give you the chance to grow down the line and look for horizons to expand your company. If you sell seasonal products (let's say carnival outfits), it limits your revenue because there is only one season when people have the need to buy the product.
Sell homemade products
The beauty of e commerce is that you can even start a home based business. So maybe you are a person you thinks they are a good cook or baker, you have the option to open a food store online. Similarly, look for products you feel you can make at home and do not require much capital expenditure to get the business runing.
Limit the number of different products and variations
If you choose to sell a lot of different products and many different variations with low profit margins, your warehouse costs and purchasing costs will rise. So, one way could be to keep it simple and offer a limited type of product.
Try not to opt for fragile products
A fragile product has the chance to break during shipping, which will then result in extra costs and extra time. Also, now a days, people expect to have free shipping with their order. To limit this extra cost, you should not sell large or heavy products.
Choose something customers can get passionate about or something that solves their problems
If you opt for a product that people will get passionate about, or a product that solves a problem for people, they are more inclined to spend more money on the product and to re-purchase it.
A product that needs to be re-ordered increases revenue opportunities
Customers that repeat their purchase are the easiest target group because they already know you and trust you.
Perishable products reduce the transportation options and warehouse costs
If your products are perishable, your customer group is very limited and is not worldwide anymore. Also warehouse might cost extra because you need to have for example a temperature regulated warehouse.
Make sure you know all the restrictions and regulations available
Because you want to avoid a lawsuit, it's better to know all the restrictions and regulations about your product and about selling to a worldwide market.