- Product research helps identify which types of products are destined for success and which aren’t worth pursuing
- Learn what’s trending by browsing bestseller lists, competitor sites, and wholesale sites—but don’t forget to monitor the trend’s sustainability
- Generate expected profits by subtracting production costs from the average product prices of your competitors
When you have a new product idea, it might be tempting to pursue it immediately. But first you need to make sure your idea is appealing to potential customers. That’s where product research comes in.
Product research lets you see the big picture of where demand is headed so you can make better decisions about what you sell. Whether you’re developing your own product or buying inventory for your store, learn what product research is, why it’s important, and how you use it to find the right products for your business.
What is product research?
Product research is the process of determining what products and features your customers or target market want most. It’s a form of market research used in the product development or product sourcing process to understand trends in demand.
Business owners do product research to determine the best opportunities to pursue, based on the potential for high profit margins and low competition. It aids in making smart product development choices and aligning the product with customer desires.
Why is product research valuable?
Product research provides an unbiased perspective with which to evaluate your product ideas: Are they backed with data or simply a bust? Using product research to make decisions will help you pursue the best opportunities for your business without chasing unprofitable ones, ultimately achieving a higher return on investment.
Conducting product research on a regular basis can also make your success more sustainable. When you continuously track trending products, changes in competition, and similar data points, you’ll see how demand is shifting. This means you can anticipate which products will have long-term success and which will go out of fashion fast.
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6 tips to help you find profitable product ideas
Product research doesn’t have to be an intensive process. While you can run large-scale surveys or conduct focus groups with members of your target audience, you can also do effective product research by using free, online tools and browsing trustworthy sites. Here are six tips to help you determine if you have a great product idea in front of you.
1. Look through the Amazon Best Sellers list
While your potential products don’t have to be top sellers to be profitable ideas, a great way to start gathering insights about current demand is by browsing the Amazon Best Sellers list. This Amazon product research tool compiles the most popular products of the hour based purely on sales data.
Tap the product category that best fits your business—for example, “kitchen & dining” or “sports & outdoors”—to explore what consumers are purchasing. Take note of any trends, such as recurring brands or products that address similar needs.
If you notice a best-selling product similar to your product idea, click on it to read some customer reviews. Why do people love that particular product? How do customers wish it could be improved? These insights can help you hone your product idea.
2. Research the competition with online search
In addition to researching what types of products are out there, it’s essential to know how many options your shoppers have. The more competition for your product, the tougher it will be to generate a large sales volume.
Start researching your product’s level of competition by identifying keywords related to your business, including products and values (e.g., sustainability, pets). Then determine phrases that relate to your products that your target audience might search for, like “compare linen and bamboo sheets” or “durable dog leash.” Run a search using those keywords on search engines and see how many relevant competitor sites pop up. You can also search for those same keywords on e-commerce marketplaces, such as eBay and Amazon, to see how many product listings appear.
Want to get more insights from your competition? Explore online businesses to see what similar products they’re selling and what their most popular products are. This can tell you how a specific product idea may perform in comparison to your existing products.
3. See what’s trending on social media
When products are trending, they often dominate the conversation on social media. Another way to figure out where demand is headed is by browsing social media for trending hashtags. You can search relevant hashtags (like #officesupplies if you’re thinking of selling notepads) to see trends in consumer posts or engagement.
Consider taking a look at what influencers in your industry are posting about too. When influential social media users share a product, they often generate demand you can maximize for your own business.
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4. Compare production costs to average product prices
When doing product research, don’t forget to consider the price points of similar products. These prices indicate how much you can realistically charge. Few customers will choose a more expensive product over a cheaper option from a competitor—unless your brand name or product adds value they can’t get elsewhere.
With your potential revenue in mind, do some research on how much it takes to produce each product. For example, you can look up potential suppliers for your inventory or raw materials or research how much shipping costs based on weight and product size.
Subtract your expected production costs from your expected pricing to estimate how much you profit you can generate from each sale.
5. Use Google Trends to evaluate demand
Top-selling Amazon products and trending social media topics can change multiple times a day, so if you want to ensure your product isn’t a passing fad, you need to determine how demand has changed over time.
With a product research tool like Google Trends, you can see how search volumes have changed for a specific keyword over time. If you see consistent growth, you’ll know that a product idea is sustainable and likely worth your time. If there’s a sudden spike in search volume, consider whether it’s a one-time event or affected by the product’s seasonality. For example, while pumpkin spice lattes are more popular in the fall, the product helps coffee shops achieve high profits because they consistently gain traction every year.
6. Look through wholesale sites for more product ideas
If you conclude your original idea won’t be a successful product, don’t give up yet. You can continue compiling ideas to make your product more profitable or start brainstorming from scratch. Wholesale websites like AliExpress are great places to browse existing products and keep the ideas flowing.
Find winning products for your business
As an entrepreneur, you need to guarantee your products make sense for your small business in order to remain profitable. Conducting product research before you pursue an idea helps you make the best use of your money and time.
Just by using online product research tools and e-commerce websites, you can effectively find out where demand is headed, whether or not trends are sustainable, and what consumers actually want from products like yours. Once you have an ideal product backed by data, continue the product development process by learning how to select the right price.
The information above is provided for educational and informational purposes only. It is not intended to be a substitute for professional advice and may not be suitable for your circumstances. Unless stated otherwise, references to third-party links, services, or products do not constitute endorsement by Yelp.