How to Choose Your First E-Commerce Product

September 29, 2019 6 min read

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If you’ve been wondering when to get into e-commerce, the answer is now. E-commerce is huge, and getting bigger every year. According to Statista, in 2014 the global e-commerce market was 1.3 trillion dollars. In 2023, it’s projected to be a whopping $6.5 trillion. The best time to get in was when it was still nascent. The second best time is right now.

“Okay,” you say. “But I have no idea what I’m getting into. How do I even choose what to sell?” A great question, and one that’s easier to answer than you might think, but it’s important that you get it right. The products you sell are fundamental to everything you do. They’ll affect your marketing, your profit margins and the design you use. Logistics and legal restrictions come into play, too.

For example, what if you’re selling alcohol? You have to deal with extra types of taxes. Or what about shipping large, bulky items like mattresses across the country? Maybe you’re importing from a foreign country and have to learn about import duties. Whatever the case may be, the product is the bedrock of your e-commerce efforts. Here’s how to home in on the one that’s right for you.

Related: 5 E-Commerce Secrets Experts Aren’t Willing to Share With You

Look for a Niche

The e-commerce field is saturated, but people are still finding profitable niches where they can turn a profit. Everyone wants to find the maximum audience and would love to be the next Apple, Google or Microsoft, but you’re often better off staking your claim on the niches.

Noted marketing thinker Seth Godin is one of the chief proponents of this. “Stake out the smallest market you can imagine,” he says in one of his personal blog posts. “The smallest market that can sustain you, the smallest market you can adequately serve. This goes against everything you learned in capitalism school, but in fact, it’s the simplest way to matter.”

Instead of just being one more wine provider, corner the market on Merlot from the Canadian Okanagan Valley. Or instead of just selling dice for tabletop gamers, produce specialized custom dice with die-cut carry cases for Warhammer 40K. If you can find a niche large enough to sustain you but small enough that you can be a major player, you’re in business.

Address a Need

When the future founders of dog-product sellers Active Hound were talking to other pet owners at their local park, they came across one complaint over and over: The dog toys they were buying wouldn’t hold up. They decided to do something about it, and they launched Active Hound to sell more durable toys that wouldn’t fall apart under the stress of everyday life. As a recent Shopify blog post on them mentions, they were so successful that they expanded into other dog products, too.

Is there a need that’s not being filled? If you work in a particular industry or have passions in a particular hobby, that’s a great place to start. You’ll know better than anyone what you’re looking for. Or maybe it’s like Active Hound, where you’re listening to what people want. Either way, filling a need is one of the best ways to choose a product.

Turn a Profit

One of the most important things about your product is the question of cold, hard cash. Can you make enough money selling it to keep the lights on? Especially when you’re starting out, selling something that has a higher profit margin is a good way to make sure you don’t go under immediately.

Jacob Elggren, founder of wallet-maker Andar, knows a thing or two about this. “We knew going in that we wanted something that we could turn a profit with fast,” he told me in a recent email conversation. “We saw an opportunity with leather goods — accessories tend to have a little higher margin than some other niches we were looking at — and the proof is in the numbers. With Amazon and Shopify, we went from $531 in revenue in the first couple of months to $1.7 million in 2018. Having a higher margin early on helped us stay afloat.”

After you’ve been up and running a little while, you can trade more on volume and take a lower profit. When you’re first getting started, every dollar counts. Make sure you have a product that can support the business.

Related: 6 Steps to Building a Million-Dollar E-Commerce Site in 60 Days

Check Trends

If you’re just looking to sell a product and don’t much care what it is, you can browse Amazon, eBay, Facebook Marketplace and other large e-commerce platforms to find out what’s hot. Look over a period of time and note what’s consistently good. Don’t jump on fads; look for trends. A fad dies out fast, but a trend has staying power. If you’re seeing a certain genre or type of product show up consistently across platforms and over time, you’re probably looking at a trend.

Think of fidget spinners, which had massive success very quickly and then died fast. You don’t want to do that, especially if you’re dealing with physical inventory and not just dropshipping. You might wind up sitting on inventory you can’t sell. Trends are important. Fads aren’t. The only way to capitalize on a fad is to catch it at the start so you can get off the wave before it dies. It’s far better to choose something with some staying power.

Choosing the right product is critical for any e-commerce business, and if you want to find success you’re going to have to put the effort in. With these tips, you’ll be well prepared to find your perfect product.