As a company we now run five different
on-line ventures and we are always looking for new possibilities. When analyzing the market we first look for ways to expand existing product lines to take advantage of existing customers and site traffic. However, sometimes we look for completely new product ranges, when we do, we use the process detailed below:
Key:
1) Market (MA) – is there an internet market for the product…not all products will sell on the internet so you need to establish who buys the product and do these people use the
internet to make purchases?
2) Size of Market (SM) - how much do people spend on average on this product/service?
To try and establish this information you need to do a little market research, there are plenty of sites that
specialize in providing this information and can be found by searching ‘Market Research’ on the search engines. You should also search for news and statistical articles pertaining to the sector in question, try searches like “your product line + “market data”.
When looking for products to sell on the internet you need to establish if they are well searched through the medium.
3) Search Potential (SP) – number/depth of potential search expressions
4) Search Competition (SC) – the competition for those search expressions and the CPC / PPC costs that the search expressions attract
Most of the above can be established using the overture expression tool and then checking the CPC/PPC cost of the expressions you identify on either Overture or Miva. Unfortunately, Google do not indicate the placement cost of the expression, so average Google placement costs can only be established once you have added the expressions to an active CPC/PPC campaign.
5) Competition (CO) – check for any really big players in the market in your region and research the competition to establish if it is possible to create a competitive edge.
This can be established by searching using the expressions that were previously identified. The presence of a really big player should not necessarily put you off but you need to
identify ways to be less expensive or better than they are.
6) Market Breakdown and Niche Opportunities (MB) – attempt to breakdown the market and identify possible niches.
7) Supply (SU) – is there a regular supply of the product and where and who are you going to purchase it from?
8) Shipping and Handling (SH) – in relation to its size and weight, how easy is your product to deliver?
9) Customer Support (CS) – how technical is the product and will your customers require pre and after sales support? In the case of after sales support, will they be prepared to pay for it and are you prepared and capable of providing it? Will the product require in house specialist knowledge?
10) Average Sector Profit Margin (PM) – what’s your profit margin? Is the difference between cost and sales price large enough to make it a viable project?
11) Returns (RE) – some products naturally generate a lot of returns, for example: when shopping for clothing people tend to buy products in the knowledge that they will be returning some of them. It is important to build this into the cost structure.
Each of the above is given a respective score of between 1-9 and with our model a product with a score of between 75-108 is worth
further analysis.
| Product Line |
MA |
SM |
SP |
SC |
CO |
MB |
SU |
SH |
CS |
PM |
RE |
| Sporting Goods |
7 |
7 |
9 |
7 |
8 |
9 |
8 |
8 |
8 |
9 |
8 |
| Toys and Games |
8 |
8 |
8 |
6 |
6 |
8 |
8 |
9 |
9 |
8 |
7 |
| Holiday and Travel |
8 |
7 |
9 |
5 |
5 |
8 |
9 |
9 |
3 |
5 |
8 |
| Pet Care |
6 |
7 |
8 |
8 |
9 |
4 |
6 |
8 |
7 |
7 |
8 |
| Books and Publications |
9 |
8 |
9 |
2 |
2 |
9 |
7 |
9 |
8 |
4 |
8 |
| Gifts |
9 |
8 |
8 |
4 |
5 |
8 |
7 |
9 |
9 |
8 |
6 |
| Insurance and Financial Services |
7 |
7 |
7 |
3 |
2 |
7 |
8 |
9 |
2 |
8 |
8 |
| Home Décor and Accessories |
6 |
6 |
7 |
8 |
9 |
7 |
7 |
6 |
7 |
6 |
6 |
| Flowers Real / Artificial |
6 |
7 |
6 |
8 |
8 |
4 |
5 |
5 |
7 |
8 |
6 |
| Collectibles |
9 |
7 |
8 |
7 |
7 |
8 |
4 |
9 |
6 |
7 |
7 |
| Art |
6 |
5 |
6 |
9 |
7 |
7 |
4 |
6 |
5 |
8 |
7 |
| Gadgets and Boys Toys |
9 |
8 |
8 |
4 |
3 |
5 |
8 |
9 |
9 |
8 |
7 |
| Seasonal Goods, Christmas,
Easter |
6 |
5 |
7 |
9 |
8 |
5 |
8 |
8 |
8 |
7 |
8 |
| Events Merchandise, Super Bowl
etc |
7 |
4 |
7 |
9 |
7 |
4 |
8 |
9 |
7 |
7 |
8 |
| Tickets for Events |
7 |
5 |
6 |
7 |
6 |
5 |
3 |
9 |
6 |
5 |
9 |
| Patriotic Goods - products
with flags |
8 |
4 |
5 |
8 |
7 |
4 |
7 |
9 |
9 |
8 |
8 |
| Mens Accessories |
7 |
6 |
5 |
6 |
6 |
4 |
7 |
9 |
9 |
7 |
7 |
| Beauty Products |
6 |
7 |
6 |
6 |
5 |
5 |
7 |
9 |
7 |
6 |
8 |
| Safety and Security |
6 |
7 |
6 |
6 |
6 |
6 |
8 |
8 |
5 |
8 |
6 |
| Bed and Bath |
7 |
5 |
5 |
7 |
7 |
5 |
6 |
6 |
8 |
7 |
6 |
| Furniture |
6 |
4 |
5 |
7 |
8 |
6 |
4 |
4 |
8 |
5 |
7 |
| Clothing |
8 |
7 |
7 |
5 |
4 |
8 |
8 |
8 |
9 |
8 |
3 |
| Fashion
Accessories |
8 |
7 |
6 |
5 |
5 |
7 |
8 |
9 |
9 |
8 |
4 |
| Garden Accessories |
7 |
6 |
6 |
8 |
6 |
5 |
7 |
6 |
9 |
6 |
6 |
| Home and Household Appliances |
7 |
7 |
7 |
6 |
6 |
6 |
6 |
4 |
8 |
7 |
7 |
| Kitchen Accessories |
8 |
6 |
6 |
7 |
6 |
6 |
7 |
7 |
8 |
7 |
8 |
| Promotional Merchandise |
8 |
7 |
6 |
6 |
6 |
7 |
8 |
9 |
9 |
7 |
7 |
| Home Office Equipment |
6 |
5 |
5 |
6 |
6 |
5 |
6 |
5 |
8 |
7 |
7 |
| Nutritional Products |
7 |
6 |
6 |
5 |
5 |
5 |
7 |
8 |
5 |
8 |
8 |
| Photographic Equipment |
8 |
7 |
7 |
4 |
4 |
5 |
7 |
9 |
6 |
6 |
7 |
| Fragrances and Perfumes |
8 |
6 |
6 |
5 |
5 |
4 |
8 |
9 |
9 |
7 |
8 |
| Telephony - Mobile, IP,
PSTN |
7 |
7 |
7 |
3 |
6 |
6 |
7 |
8 |
3 |
6 |
7 |
| Computing |
8 |
9 |
7 |
2 |
3 |
7 |
8 |
8 |
2 |
4 |
7 |
| Electrical Goods |
8 |
9 |
7 |
3 |
2 |
7 |
7 |
7 |
5 |
4 |
7 |
| Property Sales and Rentals |
7 |
7 |
6 |
3 |
4 |
6 |
5 |
9 |
3 |
7 |
9 |
| Clocks and Watches |
7 |
6 |
5 |
5 |
5 |
7 |
7 |
9 |
7 |
6 |
7 |
| Food and Drink |
6 |
5 |
5 |
8 |
7 |
8 |
6 |
6 |
6 |
7 |
7 |
| Health, Fitness and Medical |
6 |
5 |
6 |
6 |
7 |
7 |
5 |
8 |
4 |
5 |
7 |
| Jewellery |
7 |
7 |
7 |
4 |
5 |
7 |
8 |
9 |
8 |
7 |
7 |
| Music and Film |
8 |
7 |
9 |
2 |
3 |
7 |
7 |
9 |
8 |
4 |
7 |
| Baby Products |
7 |
6 |
7 |
6 |
8 |
7 |
8 |
8 |
7 |
8 |
6 |
| In-Car Entertainment |
8 |
5 |
7 |
6 |
7 |
6 |
8 |
8 |
6 |
8 |
6 |
| Computer Games |
8 |
6 |
8 |
2 |
2 |
5 |
6 |
9 |
8 |
4 |
7 |
| DIY an Building
Materials |
6 |
4 |
5 |
9 |
8 |
5 |
5 |
5 |
7 |
6 |
7 |
| Heating
Plumbing and Air Con |
6 |
5 |
5 |
9 |
8 |
5 |
5 |
5 |
5 |
7 |
7 |
(All figures indicated above are our own internal workings and are based on our own research and opinions of that market. Please feel free to use our workings as a guide, however, we strongly recommend you do your own research before committing to any particular product or service.)
If a particular product line scores well, we then undergo a sector breakdown where we
analyze the sector looking for under-exploited niches, as follows:
| Product Line |
MA |
SM |
SP |
SC |
CO |
MB |
SU |
SH |
CS |
PM |
RE |
| Sporting Goods |
7 |
7 |
9 |
7 |
8 |
9 |
8 |
8 |
8 |
9 |
8 |
Fishing
Golf
Contact Sports
Tennis
Football
Squash
Equestrian |
Found info on a US internet outlet with $22+M in on-line sales
Largest participation sport in the world!
Average Internet Sales Growth 42% PA
Average Internet Gross Profit 38%
Industry knowledge required but can be hired inexpensively
Average competition, room in the market for another player in all geographical regions
checked
Found several Asian, US and European Suppliers
Further apparent breakdown – Fly, Sea, river, trout etc. etc.
Good variety of search expressions with low-average competition
Good affiliation opportunities
Not analyzed – to much large-company competition
Not analyzed – to niche and no knowledge of market
Not analyzed – doesn’t appeal
Not analyzed – doesn’t appeal
Not analyzed – doesn’t appeal
Found article on a US internet outlet with $14+M in on-line sales
Average Internet Sales Growth 35% PA
Average Internet Gross Profit 40%
Industry knowledge required but can be hired inexpensively
Limited competition, room in the market for another player in all geographical regions
checked
Found several Asian, US and European Suppliers
Further apparent breakdown – Polo, Jumping, Dressage, Hunt, Racing
etc.
Good variety of search expressions with limited competition
|
This is not meant to be an exhaustive list of potential products and services, if you have a product that is not mentioned maybe this process will help you to identify whether it is suitable for retailing on the
internet.
Continue to Trade
Communities
|
