Choosing the right product for your e-commerce brand is one of the most important pieces of the puzzle. But how can you tell that you have the right product? Well, you can't really tell until you validate your idea. And that's why one of your first steps should be making sure that you've picked a winner. Now, if you do skip this step, you run the risk of wasting your time or even worse, you run the risk of sinking a bunch of money into products that people aren't willing to buy. So to avoid all of that, this video is going to teach you how to properly validate your product idea. These 16 questions will help you gauge whether your product is viable so that you can enter the market competent. If you have just stumbled upon this video, welcome to Learn with Shopify. This is a channel for small business owners that are really looking to start and grow their e-commerce business. So if you're an entrepreneur, definitely consider hitting that subscribe button.

We have tons of great content
that covers every aspect of running an online business. So without further ado,
let's just hop right into it. Here are 16 questions that you
can be using as a framework. So for this, I'm just going to be using
a coconut hair mask as an example, but you would just plug in your own product. Okay, so our first few questions are
going to look at the market as a whole. Why is the potential
market size or demand? You're going to want to look into
this before you invest a lot of time, money, or energy into an idea. And this can be as simple as
using a service like BuzzSumo. So BuzzSumo will show you how many
people are talking about your product per day, but by far, the most popular
tool is Google Keyword Planner tool. It's a free tool which will help
you determine how many people are searching for specific
words each month using Google.

And you're going to want to use
this tool to search words that are related to your product idea. So we used Google Keyword Planner
tool for our coconut oil hair mask, and it looks like there are
over 73,000 searches per month. And then using BuzzSumo, we were
also able to determine that there were about 150 tweets per day
mentioning our main keywords. Now, this information doesn't give
us a hundred percent certainty that our product will have buyers,
but it is a vote of confidence that there's interest out there. Next, you're going to want to do some
research on who your competitors are. The more you understand about the
competitive landscape beforehand, the less surprises you'll face later. So research your competition
on Google, especially in the countries that you plan to sell in. Let's hop back into our example. So we've done our research, and from
our analysis, we discovered that there are three areas of competition,
pure coconut oil, like the kind

that you would find in a grocery
store, DIY recipes, and commercial products sold by large businesses. For us, we didn't find any true market
leaders for our hair product, but instead we found a very fragmented
market of manufacturers and retailers. So we don't have the full picture yet, but
this may indicate some opportunity for us. Is it a trend, fad,
flat, or growing market? Just as important as knowing your
potential market size, it is also important to understand which
direction the market is going. The last thing that you want is to realize
that you've actually missed the boat and the market is rapidly declining, right? So for our product, we know from Google
trends that the search interest has grown significantly over the last several years. But even though coconut oil is trending,
as of right now, the beauty industry is always going through marketing shifts that
push new ingredients as breakthroughs. So it's important to recognize
that at some point in time, this

trend may die out, and that will obviously cause a decrease in demand. So if you're not sure whether a trend is going to continue upward or die out, just do a bit of research and use tools like Trend Hunter. Also, a lot of entrepreneurs report on using just their gut instinct when it comes to capitalizing on a trend. So your intuition can be valuable as well. Can your potential customers buy the product locally? So if your product is readily available locally, that's just one less reason for people to seek your product out online. So let's go back to our example. Coconut oil as a raw ingredient is pretty widely available online and offline, but coconut oil-based hair care products are definitely much more scarce offline, and it would likely require a specific trip to find it. So if you're also finding that your product is hard to find in stores, then that's definitely a good sign. Who are your target customers?

Before you fully decide on a product, it's important to get a sense of who your potential customers are. You don't want to find out too late that your potential buyers are living somewhere that you can't shift to, for example. So if you're in a market that has major players, you could use channels like Alexa to find out more about the demographics of your target market. But in our case, it's definitely a little bit more difficult because there aren't really any major competitors with websites that we can analyze and just spy on. So if you're in the same situation, you can just get a feel by using social media. So try Twitter, for example, you can check out tweets that mention your keywords and just take a closer look to see who exactly these people are. We did an analysis of our keyword, coconut hair masks, and most of these people tweeting were female based on credible profile images. We can also assume that the average age is between 18 and 35 and then

having used Google Trends, we know that our target customers are mainly in the U.S. and in Canada. From this information, we know that we can really easily reach our potential customers. And then we also do a little bit of extra research that basically indicates that our particular demographic is not shy about spending money online. So that's definitely good news for us. So now it's time to move on to our product-based criteria. These are gonna be the questions that will consider factors about the actual product itself, and they're going to help you get a better understanding about what your product strengths are and what are some potential pitfalls. What is your potential selling price? The lower the price, the lower potential profit per unit. It has been generally accepted by many top e-commerce entrepreneurs that products sell between $50 to $150 hit a certain sweet spot where you can make an acceptable amount per unit, but not too high that customers are hesitant to purchase online or expect premium services like phone support.

For our hair mask, we looked at about two dozen comparable products from different brands. We determined that we would be able to charge around $9 to $20 for 120 milliliters. Now for us, this is a little bit of a low price point. That means our margins are going to be small, and it's going to make it difficult when using paid advertising channels, especially when we're just starting out. So, yikes. That's a little bit of a red flag, but this is our first red flag in our research so far. And frankly, that is okay, right? Not every box is going to be checked when doing this exercise. So let's just go ahead and take a look at the next questions. If you're looking to get started building an online business, but maybe you're not sure what to sell or you need help finding a product, then make sure that you're checking out our free 40-minute webinar.

It's going to teach you how to find winning product ideas, how to validate those ideas, and how to get started. So just click the link in the description box below to get started with your free training. Now, what is your potential markup? Markup is the excess amount after the cost of your product. This amount will cover your expenses to run your business, and it's going to be your profit. Now, remember when you're looking at your potential markup, you may also want to consider how it's going to change as your business grows. So for example, we're just starting out, right? So we're going to be ordering small quantities. But as we grow, we're going to start to get some bulk pricing, and that's going to mean our costs go down, and there's going to be some more leftover money. Like we just talked about, we know we can comfortably sell anywhere between $9 and $20.

Now we did some research on our costs, including ingredients in packaging, and it's going to cost us $5.83 to produce a hundred units. So if we were to sell our product for $9, which was at the lower end, our markup would be a concern for sure. But if we aim for the higher end, at $20, we can still enjoy a pretty healthy market. All right, next up, how many skews will you have to stock? So skews referred to types or styles of products like sizes and colors. And in general, more skews just mean more potential headaches. So a lot of skews are going to increase your costs for inventory and storage, and it's going to increase the chances that you might make a shipping mix up. So finding a product that has only one skew is definitely a bonus. In our case, our product choice is just going to begin with one skew.

Now there's also potential to create
an entire line with this concept. And that's great because that's
going to open the door for opportunities further down the line. Question number nine, can
you offer a subscription? So subscription-based models are
definitely not necessary to build a successful online business, but the
ability to do so is definitely very desirable, and that's because subscriptions
increase recurring revenue and it saves you costs on acquiring new customers. For a hair mask, there's a potential
that this could fit into a subscription-based model because it is a consumable,
but it's important to be realistic. A customer is likely just going to
go through a couple of these a year. So our subscription plan would
definitely have to reflect that need. Question number 10, what is your product's size and weight? The size and weight of your
product can have a big impact on your sales and your bottom line. If your product is oversized or maybe
it's super heavy, that's going to

result in expensive shipping costs, and those costs can deter potential
buyers, and it can eat into your margins. All right, so let's take a look at how
this would affect our product. Most shipping companies would
consider ours to be a small package, both in weight and size. So you can even do your
own research as well. Visit your carrier's website and put some
rough numbers, and then you can get a feel for how much things are going to cost you. All right, question number 11. How durable is your product? A durable product is obviously ideal. A high-quality product is going to
decrease returns, and overall durability is going to ensure that your product
isn't damaged as it's being shipped. So again, going back to our example of
our hair masks, so maybe we would want to use a plastic container because that's
going to be cheaper, and it's going to be more reliable than shipping glass. We'll also heavily vet our ingredients
to make sure that they're safe and

effective, which is going to ensure
a high quality product in the end. Now don't forget that when you're asking
yourself this question, you're thinking about all the different factors that
make your product durable, whether that's the packaging or the product itself. Question number 12, will
you face seasonality swings? Seasonality refers to swings in purchasing
behavior over the course of the year. So for example, Christmas trees, of
course, they're going to be extremely seasonal, all of them being purchased
in the month of November and December. Seasonality swings are very important to
keep in mind because of the effect that they can have on your cashflow, as well
as the overall viability of your business. We used Google Trends to better
understand if we would potentially suffer from seasonality swings. Now we can definitely see that there
are some subtle spikes in the searches in January, and we're just assuming
that people are looking for a bit

of a rescue in the colder months. But other than that, there doesn't appear
to be too much seasonality that would affect our product choice, but we'll
definitely keep this data in mind for when we market our products in the winter. Question number 13: does your product
serve a passion or does it solve a pain? Products that solve a pain point
or serve a passion just make finding customers that much easier. Now, products that are maybe just, you
know, nice to have, might be a little bit tougher. Now for us, it's definitely
safe to say that our product choice can solve a pain point for people that are
suffering from dry or brittle hair. And arguably, it also
serves a passion as well. Since some people are invested in
this hobby of keeping their hair looking healthy and looking good. All right, next question: Is your product consumable or disposable? A consumable or a disposable
product is going to be good

from a business standpoint. That's because it's going to provide you
a better opportunity for repeat business. As a hair care product, our product
choice is definitely going to fall under the consumable category. So other consumables might include
food or cleaning products, for example. Question number 15: Is your product perishable? Choosing a perishable product is going to
pose a risk for you, especially if you're struggling to make sales, because that
might mean that you could be throwing out some of your inventory if it goes bad. So this is definitely an important
question that you want to ask yourself before you stock up. So going back to our case study,
coconut oil has an approximate shelf life of three years or longer. This should give us more than enough
time to figure out our marketing plan and to sell our product. Plus, we'll also want to consider
the time that it would take for our customers to actually use the product up. Question number 16:

Are there any restrictions or regulations for your product? Restrictions and regulations
are normal for many businesses; however, it's definitely best to
learn about this before you invest time and money into your business. So for us in our product, as far as
we've been able to determine, there aren't really that many regulations
or restrictions that are required, but if you're getting into food, cosmetics,
or even baby toys, for example, you're definitely going to want to make sure
that you're doing your research first. So after looking at our case study
and taking into account the market and the product itself, we feel
strongly about our product idea and the potential market for it. So some highlights that have really
been standing out to us to give us this indication are the low cost to start the
business, the strong search demand, the trend trajectory, and the keywords that
we could potentially rank for in Google. However, we do have a few concerns
that prevent this from being a

complete slam dunk and some of those being the low product price point and the competitive landscape. A large part of the potential success for product is going to come from building a beautiful brand around this product. And then we're also going to want to make sure that the product itself is more effective than just coconut oil on its own. Once you have your product idea and you validated the potential market for it, you're going to be ready to start building your online store. Shopify makes selling online really easy, really fast, and definitely scalable. So you can get started with a free 14-day trial, and you actually don't need a credit card at all to get started. And it's going to give you a full two weeks to build a beautiful e-commerce store so that you can start selling right away. I will leave a link for you guys in the description box to get started with your free 14-day trial. All right, so hopefully you found this example helpful, make sure that

you're asking yourself these questions just to do the proper research before
you just go ahead and jump right in. And that way, you're going to have
a clear objective understanding of whether your product idea is
viable, and if it is, you're going to enter the market more confidently. If you found this video helpful, make
sure that you're giving it a thumbs up. That helps our channel, and
it helps our community grow. Learn with Shopify is a community of
entrepreneurs, so if that's you, feel free to hit subscribe to join our crew. But other than that, I'm glad that you
were able to join me in today's video. My name is Michelle Bali, and I
will see you in the next one. Bye.

How To Find And Validate WINNING PRODUCTS: The 16 Step Product Research Guide

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How To Find And Validate WINNING PRODUCTS: The 16 Step Product Research Guide

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