Congrats! You just received Amazon seller financing or another awesome type of ecommerce funding to expand your product offering.
This is one of the best moves you can make as a high-growth seller.
But figuring out which new products will add maximum growth to your bottom line can be harder than it seems.
Generally, there are two main paths for finding products to sell: Identifying a product gap and choosing from an existing list of high-demand products.
Let’s take a closer look at the benefits and drawbacks of each approach so you can make the most profitable choice for your store.
What to do before using Amazon seller financing to launch a new product
Let’s tackle the first approach, well…first. 🤷
Identifying product gaps can be a profitable route to take, but it also comes with higher risks due to the limited information about product sales.
On the other hand, choosing products in high-demand areas is much more straightforward, but comes with its own risks as there is likely to be more competition.
If you choose the latter approach, how do you know which high-demand products to choose?
Here are five proven ways to go about it.
1. Use the right ecommerce website tools
Online sellers can use various platforms to reach their customers. Some businesses stick to one channel like Amazon, and others like to diversify their sales channels and sell their products across other ecommerce sites like eBay, Walmart, AliExpress, Overstock, and more.
The good news is, each marketplace has tools you can use to analyze products that they sell.
The Best Seller feature offers instant insight into the top 100 best-selling products in your chosen category and sub-category. Sellers can narrow it down to specific products to better identify what customers are purchasing.
eBay has its own Marketing feature and other tools to help sellers recognize hot products that may be a win with customers.
No matter where you’re selling, each marketplace most likely has tools, filters, and features you can use to leverage key data on upcoming product trends. As a major cherry on top, in most cases, these built-in tools are also free for sellers.
2. Use search engine analytics
Search engine trends and patterns offer tremendous insights for online sellers determined to pinpoint high-demand products.
Free tools, such as the Google Keyword Planner, can give you a great idea of what’s in-demand in a matter of minutes.
Sellers can also find tools to test their products and analyze what campaigns perform best.
For this, search engine analytics are often more resourceful than marketplace tools because they offer insight into what prospective customers type when searching for products. Sellers will gain marketing and SEO pointers, in addition to recognizing search and demand patterns.
Of course, if you’ve got the budget, you can opt to invest in expert analytics to get even more actionable tips and data.
3. Analyze the competition
While marketplace tools can offer a list of high-demand products, that’s still not a guarantee you’ll see if you decide to go ahead and launch.
The easiest way to determine if the supposed need translates into profit is through reviewing your competition. Sellers can check on the performance of companies offering the exact or similar products using insights obtained from analytics and customer reviews following the product’s launch.
If possible, you’ll definitely want to take a look at other product factors, such as marketing campaigns, longevity, strengths, weaknesses, and SEO.
You can also compare social media following, social mentions, online presence, and website features. Of course, some competitors are more robust and have a better capacity to sell specific products. Take the time to examine the customer base for signs of loyal, long-term shoppers.
4. Compare product performance
One product might top the Amazon best-selling list in a specific category or subcategory and fail to appear in the top ten on eBay or other platforms.
Google Analytics may also show metrics different from what you pull out of specific ecommerce stores or other seller insight tools. Aim to evaluate overall performance across different platforms for a more complete picture of how the product will perform.
And remember, crossing over to sell new products will require new marketing approaches and significant changes. Sellers should have a clear idea of what types of products they intend to sell and the target market the new products are intended for.
5. Don’t forget your margins
High-demand products aren’t automatically profitable.
Sellers should calculate the profit margin and ROI potential before investing in any product. The general rule of thumb is to start selling products with a 100% markup, which usually translates to about 50% profit.
One last thought is to consider shipping costs. Small and light products are more cost-effective to ship and can often be shipped in bulk. Smaller items also cost less to store, saving you on warehousing costs.
Keep in mind, the size of the product is a significant factor in keeping your costs low. Profitability could come down to each seller’s capacity and logistics.
If you’re looking for a simple, visual data platform to help take the guesswork out of your store’s performance, SellersFunding has your back.
You can try our Sellers Signals platform for free to see all your latest data in real-time. Simply connect to your marketplace accounts and your KPIs will instantly calculate in an easy-to-visualize dashboard.
So stop guessing and start launching profitable new products for your store, with a little help from Sellers Signals.