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2. Criteria focused on the market
The first thing we want to look at is market-based requirements. There are typically external parameters, such as market size, target consumer, whether you’re working with a trendy product, and so on.
Potential market size and demand
The first and foremost decision to be made once a businessman begins his / her company is to choose an acceptable product concept to be introduced. And a businessman needs to gather all the details about the future market size to carry out the decision.
By knowing the potential size of the market, a person can understand the exact need for the product to be introduced by their company.
If it is a start-up company or an established business, it is important to consider the future market for that specific product before deciding on new product ideas for a business
Understanding the future market for the particular product idea that the company wanted to introduce makes it easier to make money. It is also necessary to consider the future market for new product ideas such that there will be no loss or chance of failure of that product idea.
Gaining market size and demand can be challenging, but you’re going to want to get an idea of future market size and demand before spending some substantial amount of time, resources and energy in your company. It can be as easy as using a Buzzsumo service to help grasp how many people speak about your new product every day. Probably the most common application is the Google Keyword Planner Tool, which can help you figure out how many people per month are looking for keywords similar to your product idea.
Evaluating your competitors
Through keeping track of possible competitors, a businessman may begin to remove factors that may pose a potential danger to the company. Starting a new company or starting a chain of innovative product concepts may be considered a risk factor due to existing competition for the business.
There could be opportunities for these players to pose a significant challenge to the new business idea in the consumer market. Therefore, by keeping all the details of the existing competition in the business market, the launch of the new product would flow smoothly.It’s always nice to know who you’re going to be competing against if you’re going to start your company. The more you understand the competitive environment before you launch your company, the less possible surprises you will have later.
Understanding the growing market
When selecting a product a businessman wants to check the consumer market, whether the product you choose should not be readily accessible on the local market. If the product is present in the local market, it can be viewed as a possible threat to the business.
It is also better to choose ideas for a new product that is not present on the local market, as eventually all future consumers will be interested in purchasing that product.If your product is easily accessible locally, there is one less reason for customers to search online for your goods.
Target customers
Before you truly settle on a product, it ‘s important to get a feel of who your target customer is. You don’t want to find out too late that those who may be involved in your goods live anywhere you can’t ship to or can’t afford (i.e. children without credit cards).
If there are any big players on the market, you might use networks like Quantcast and Alexa to find out more about the demographic details of your possible target group.
3. Product-based Criteria
Now that we have checked our industry-based parameters and are positive about the industry, the way it is heading and our potential buyers, it is time to consider the factors surrounding the individual product itself.
Product-based criteria are specifically related to the feasibility of the product. These parameters will help you get a deeper understanding of the benefits and potential pitfalls of your product to be mindful of.
Potential selling price
When the process of choosing an acceptable product for the company has been determined, the second step is to settle on the selling price of the product. The selling price of the product is a sum that is a fair profit ratio of the actual sale price.
The lower the volume, the lower the possible profit per product. This leads to more ad investments to find more buyers. Many top ecommerce marketers have widely agreed that items that sell between $50 and $150 reach a sweet spot where you can earn a decent sum per item, but it’s not so high that consumers are unwilling to buy online or demand premium services like phone help.
Profit margin
Profit is the sum in excess of the cost of a good. This is the sum that is going to cover your overhead and be your bonus. Remember, as you look at the possible pricing, you may still want to understand how that may change as the company expands. For example, if we start producing our own coconut oil hair care items, we’d possibly start with a reasonably limited quantity of raw ingredients. However, as we expand and our purchasing amount rises, the cost of our ingredients is dropping. This is also the same for consumer products, because your order quantity is increasing, the price is dropping.
Product size and weight
The size and weight of your goods will have a huge effect on your revenue. If your commodity is oversized or heavy, expensive shipping will deter potential customers and squeeze your margins. Height and weight can also be a costly factor in volume and storage.
Each product varies in size and weight as it varies according to its specification, but one thing the manufacturer has to remember is that it should deliver a product that should be fair in terms of quality and quantity.
Product durability
A producer must bear in mind that they should meet the wants and expectations of the consumers when making a product. A customer wants to purchase such a commodity that corresponds to his price point, as the popular sense goes.
For example, the consumer buys a product of value, and all of a sudden the product purchased did not deliver itself as expected, and at that point the question arises that the product has very poor durability. To prevent this from happening, it is important to bear in mind that the most common elements that a consumer or customer wants in their product are quality, quantity and durability at a fair price.
A durable product is often the most desirable product. Material durability will reduce your total shipping expenses and avoid expensive transit breakage.
Seasonal swings
Seasonality means that there are varying levels of demand for a commodity all year round.
Are you buying sunscreen in winter?
How about summer holiday decorations?
There are, of course, various things to consider, including where your target buyers are situated (if you’re selling internationally — keep in mind that their summer might be your winter).
Seasonality isn’t an absolute science. However, there are many ways to overcome the problem, including timely promotions and international shipping.
Whether or not you consider your product as a seasonal one, seasonality still affects sales for all online retailers. Some of the most highly awaited shopping holidays — like Black Friday, Small Business Saturday, and Cyber Monday — result in some of the best sales of the year.
You may need to assess your own business downtime to ensure that you can handle a seasonal product or capitalise on holiday buzz, and work during those times to mitigate demands and costs.
Consumable or disposable product
From a business point of view, a consumable or disposable product is good because it gives you a greater chance to win confidence and repeat business from your previous customers.A company will also distinguish its potential consumers by differentiating the selection of disposable and consumable items because there are customers who believe in purchasing disposable goods and there are customers who only purchase consumable goods on the other hand. Overall, this will help you reduce the cost of marketing and raise the overall lifetime value of your customer.
Can a subscription be offered?
However, far from being necessary to create a successful online business, the opportunity to offer your product a subscription is very attractive as it helps maximise the value of your lifelong customer, allows you the freedom to invest more on attracting customers, and reduces the number of customers you need to develop a successful company.
Security and safety:
For example , if a company chooses to launch a line of beauty products , the company is responsible for delivering the product that is safe and secure for the use of consumers.
A beauty product is a product selection that consists of all the ingredients that can externally impact consumer skills. Because it is an external use product, all the safety matters of that product need to be maintained by a manufacturer.
Is your product subject to any restrictions or regulations?
Restrictions and regulations are a part of life for a number of businesses and products. However, before investing time and money in your business, it’s best to learn about them. Knowing these things in advance will help you prepare better, which will potentially save you a lot of time , energy and money.
How many SKU’s will you have to stock?
Many entrepreneurs forget that a single item can also be connected to several SKUs.
A SKU, or stock-holding unit, generally refers to the colour , size and other variations of a single product.
The more SKUs you have, the more energy, time and resources you would need to spend on monitoring and maintaining inventory.
Let ‘s look at how an SKU t-shirt breaks down to get a good idea of the process.
Not only will you need to store a range of sizes (small , medium, large) …
But also colours of each size (small and red, medium and red, etc.) …
And maybe even male , female and child sizes (small, red and female; medium, grey and children’s; big, blue and male).
SKUs will easily add up, bringing a degree of complexity to how you manage, sell and distribute the product.
Don’t let a large number of SKUs deter you, but keep an eye out for increased costs and repairs associated with product mix-ups during results.
Terms and conditions of use:
When introducing a product line, the start-up company needs to be explicit on its terms and conditions. These terms and conditions allow the consumer to make his / her final buying decision on the basis that the product will have all the elements/qualities that the company has promised.
And even if there is misunderstanding, the customer can feel free to contact the company with their valuable complaints.
Think of yourself.
Yes, in addition to choosing a product that is feasible on the market, you can choose one that you really like, or one that addresses a problem that you have faced personally.
Building a successful company always takes a long time, and they can either fly by or drag on forever, depending on how enthusiastic you are about what you’re selling.
Be passionate about it, find yourself a niche and start selling to other passionate people just like you.
4. Note, there is always a risk.
Bear in mind that no matter how much you study, investing in a business venture is still risky. You will never get 100 percent of the information you need, and you will certainly not be able to determine the exact figures for each of the above queries. Even, it will help you weigh the feasibility of your product concept and decide whether it is worth your time and investment.
