If you’ve ever found yourself asking the classic ‘Should I? Shouldn’t I?’ about your new product idea, you’re not alone—many new product ideas spring from random bursts of genius rather than methodical planning.
It can be scary to pull the trigger on your new ideas without some degree of certainty that they’ll be winners, and as many eCommerce sellers know, the fallout from a poor product choice can be painful.
Obsolete inventory can add an extra 25% onto your business goods cost, and unsold inventory costs the US economy an eye watering $50 billion every year. Combine this with the fact only 40% of product ideas make it to market and of this amount just 60% turn a profit, and it’s clear to see: product selection is no joke.
While killer product ideas can have your brand inducted into the eCommerce hall of fame and provide a steady revenue source, the opposite is true for failed products. Wasted time, money, and dreams become your reality, not to mention the immovable stock which rubs salt into your wounds.
But with the right strategy, you can ensure product success every time. And you’re not alone. In this post, we’ll share the step-by-step process you need to validate your ideas before giving the go-ahead (knowing you’ll succeed).
Need some cash to fund your next big idea? Explore our funding options.
How to Validate New Product Ideas:
- Wait, Can I Really Launch These Products?
- Nail Down What Your Product Is and Who It Serves
- Put Your Detective Hat on and Scope Out Your Competitors
- 3 Alternative Ways to Ensure Your New Product Ideas Aren’t Doomed to Fail
- Launching The Product: Take a Deep Breath and Go for It
- The Masterplan for Securing Product Validations You Can Trust
Wait, Can I Really Launch These Products?
Before you dive head-first into research, take a quick reality check to see whether launching a product is possible right now.
- Do I have enough cash to launch my new product ideas?
- Do we have enough time to commit to making the products successful?
- Do my new product ideas fit into our existing range?
- Can I secure funding for my project?
If, after crunching the numbers and looking at the eCommerce funding requirements, you realize you have to shelve this project for now, that’s OK.
It’s a matter of ‘when’ not ‘if’. So, keep a new product ideas list, save money, and work toward securing any additional capital you need.
On the flip side, if you determine you can go full-steam ahead, it’s time to get down to business and answer a fundamental question:
Which funding option is the best for my launch?
Your answer will depend on a variety of factors like your current revenue, liabilities, and goals.
For example, if you’re launching a spin-off product to extend your already successful range, a cash advance is a solid option. You can use the sales from your existing products to fund a new one.
However, if you’re launching a brand new product with no related sales history or successful track record, you’ll need a larger cash outlay to get your product off the ground. In this case, eCommerce working capital funding is just the ticket.
Want to find out which eCommerce funding is best for your business? Explore your options today.
Nail Down What Your Product Is and Who It Serves
Once you’ve got some potential product ideas down, it’s crucial you take the time to really lean in and define your new product from start to finish.
To better understand the market you want to enter, and position yourself for maximum success, start off with these simple questions:
- What products do I want to launch?
- Who are these new product ideas for?
- What need(s) will the items fulfill?
- Where do people go to buy these products?
- What’s the USP for this product?
It’s vital you uncover the exact factors that set your product apart before investing any cash.
Here are a few areas to consider:
- What makes your product so unique that someone should buy from you instead of your competitors?
- What’s the ‘who’, ‘what,’ and ‘where’ of your new product ideas? (This information will help pinpoint the types of people your products will serve.)
- Do you have any customer personas for your brand? If so, now is the time to whip them out and use them to refine your new product ideas further.
- Do you know what your customers desire right now? Get your analysis game on. Cross-reference customer personas with your products’ features and consider whether it’s something they would want. Also, assess whether you could tweak your existing products to add more value.
Don’t have customer personas? No problem! Check out this handy guide by Hootsuite and learn how to make your own.
Put Your Detective Hat on and Scope Out Your Competitors
Now that you have a clear idea about your products and target audience, it’s time for some research. But not just any old research—you’ll be nosing into your competitors’ business.
But first, a warning: competitor analysis can be a long, hard slog—so, brace yourself and think of the long-term pay-off if it feels repetitive and boring.
To kickstart your competitor analysis and reveal winning products in your list, here’s a step-by-step process to follow:
Step 1: Pick out your top competitors
To know what you have to beat, find out who your top 5 direct competitors and 5 indirect competitors are. Plug their names into excel or a table for easy referencing later.
Step 2: Stalk your competitors 🔍
Okay, not really. The goal is to find out what their money makers, customers, and strategies are so you can effectively differentiate in your product launch.
For example, you can:
- Scope out their website.
- Read interviews about their brand.
- Watch unboxing, testimonial, and review videos.
Put the following questions into the same excel or table housing your competitors’ names. Then go through your list for each company, and ask:
- What is their Unique Selling Proposition (USP)?
- Which products are their top sellers and why?
- What are their new product ideas and launches?
- Have they had any products flop? If so, why?
- What’s the size of their current collection?
- What’s their price range? (Include lowest and highest RRP to get an average.)
- What channels do they sell on?
- Which social media platforms do they use?
- How’s the health of their social media channels?
- How do they market their products? (Look for influencer marketing campaigns, Google Ads, etc.)
- What kind of promos do they use to lure in new customers and draw existing ones back in?
- How do they position their brand in the market? (Think: fun, edgy, cool, sophisticated, quirky?)
💡Pro tip: Sign up for competitor newsletters ASAP to get a better idea of how they position their brand. By the time you’re ready to launch your new product ideas, you’ll have a backlog of copy, design, and campaigns to use as inspiration.
Step 3: Look into competitor reviews to create products your customers will love
This next one is a goldmine so don’t skip it.
Look into competitors’ customer reviews to find out what people are saying about their products. This will help you find ways to improve your new (and existing) product ideas.
Look on reputable review sites like Trustpilot and Reviews.io, your competitor’s store, and any other shops or platforms they sell on. Just be mindful of fake reviews and disgruntled customers, which can skew the data. If you’re not sure how to spot a phony review, check out this awesome post by Which.
Step 4: Look at what small but promising brands are doing to get ahead in your niche
The last tactic is to find a few up-and-coming brands that have recently launched a product similar to the one you intend to launch.
This approach will help you determine how they’ve altered the product to fit their customers and how they’re performing as newbies in the market.
Remember, when building an eCommerce business, the goal isn’t to reinvent the wheel. Instead, take what’s working and enhance it to get the most reward for the least output.
These snippets of info from competitor brands help you find similarities in their growth strategy and pointers on how they stand out. You can then use this information to optimise your product development and launch processes.
Step 5: Use analytics to verify trends and products
Another part of your validation strategy is to source analytics and look for patterns that confirm your assumptions.
Here are some of the best analytic tools to use:
- Google Trends: Use keywords related to the product to find out how the product has performed. For example, you can look as far back as 5 years or zoom in on the past year. These figures will help you establish whether there’s an upward trend or this is a one-time fad.
- SEO tools: Use tools like SEMRush, Moz, or Ahrefs to assess traffic to the brand and product page. Don’t forget to look at other SEO elements like your competitor’s backlinks and traffic sources. This investigative approach will help you establish whether people are looking for the product right now, and whether other people and companies find it valuable enough to promote.
- Social media tools: Looks can be deceiving, especially on social media. Some people buy followers and use other shady tactics to appear more successful than they are. So, if you take what you see at face value, it could cost you big time. Find out which social media channels your competitors use, then use tools like Social Blade to establish the health of their social media accounts. You could look at their engagement metrics and content ranking, click through their posts to determine follower engagement, and note their best-performing posts. But watch out for pesky bot comments that can pollute your findings.
Step 6: Ask your squad what they think about your new product ideas
52% of people worldwide believe brands should act upon the feedback they receive, so customer feedback is essential to tweak new product ideas to suit audience needs.
If you already have a loyal customer base, you’ve lucked out—there are few recommendations more accurate than those delivered straight from the horse’s mouth (aka your raving fans).
Use these relationships to your advantage. Ask your audience things like:
- What do you want to see in our store?
- How can we improve our existing products for you?
- What makes you buy X products?
- What prevents you from purchasing X products?
- Would you be interested in having X products if we did X to it?
You can conduct social listening casually by posting a survey on Facebook or posting on Instagram. Alternatively, you could host focus groups or get help from a market research firm to run surveys and interviews.
By following these steps, you’ll soon have a good idea of whether your new product ideas are headed for the top spot or destined for the trash pile. Plus, you have some great points for your product page copy and marketing if you decide to launch any products.
3 Alternative Ways to Ensure Your New Products Aren’t Doomed to Fail
- Launch a landing page to attract your dream prospects
Whether you’re launching a new lead magnet, promoting a pre-sale, or funneling traffic to a particular product, a landing page is the ultimate sales pro you want on your team.
Here’s how to create an unbeatable landing page:
- Set it up using landing page best practices.
- Drive traffic to your page using Facebook or Instagram ads targeting your desired audiences.
- Let them run for a week or so to see how many email sign-ups you collect.
- If you get many hits, this is another tick on your product verification list. ✔️
- Set up a niche social media page
If you have a little more time, set up a social media page dedicated to the niche you serve in, and build a community of like-minded people.
- Get a social media handle/page name that embodies your future product or niche. Set up a bio which explains what your group/page does.
- Share useful content on your profile/page.
- Add value by answering questions in groups, forums, and social media comments of other groups and influencers. (Don’t directly promote your group as this could get you blocked).
- Invite/follow those who engage positively with your answers.
- Continue to add value through your page/profile, drop new product ideas into the ongoing conversation, and build a following on your site surrounding its products and niche.
- Collect the feedback you get on your product idea and take it from there!
Going social will ensure you have an audience already in place when you launch your next product. If you’re curious about how to quickly build your niche social media site, check out this helpful guide by Niche Pursuits.
- Strike gold with pre-sales
There are two things every entrepreneur hates: wasting time and wasting money.
Don’t be like those unfortunate sellers who believed the promises from customers, friends, and family that they would show up and buy on the day of your grand launch.
Avoid costly let-downs by asking your audience to put their money where their mouth is and show their approval by dropping their coins before launching any new product ideas.
Pre-sales won’t only offer you the validation you need to charge forward with your new product ideas, they’ll also give you a healthy cash injection to help fund your launch. Sweet!
Launching The Product: Take a Deep Breath and Go For It!
Intuition, calculated risks, and fearlessness feature heavily in every entrepreneur’s path. Yours is no different. After you run the numbers, do your qualitative research, and triple check your results, it’s action time!
Don’t get caught up in analysis paralysis because the truth is no matter how much you research, sketch graphs, and talk to existing customers, they’re all assumptions until you get out there with your new product ideas and see what the market actually says.
Once you’ve done your market research and competitor analysis, follow these three crucial steps:
- Put together a minimum viable product (MVP).
- Authorise a small production and get them out of the door. (When you keep your tests small, you limit your losses if the product is a poor market fit).
- Opt to improve your product continually rather than waiting to launch the perfect product (hint: there’s no such thing! 😉).
These steps will ensure you lead your product development with facts, so you can serve your customers better than anyone else and avoid wasting resources.
The Masterplan to Secure Product Validations You Can Trust
No matter what you sell online, no one wants to invest in a dud.
Your hard-earned cash should fuel your progress, not wreck it, so it’s crucial you take the time to scope out your market before throwing cash at your new product ideas. Even if you’ve been in a niche for years, a lot can change in your field without you noticing if it’s not your main focus.
When you take the time to validate your new product ideas, it helps you build faith in them. Plus, your research and plans can help secure your eCommerce business’ even further into the future.
So, be patient with yourself on this journey and try your best to avoid emotional attachments to any new product ideas, as this can cloud your judgment. Now, put your boots on the ground and start holding your ideas to the fire!
Ready to stop dragging your feet and finally launch your new product ideas? Find out more about our eCommerce funding options.