Every person who wants to start in the commodity business thinks about how and where to start, which goods to choose in order to make a quick profit. Nobody will give a clear answer to these questions. Success depends on many factors. It is important to remember that dropshipping is a business in its own right and you will need to invest money (less than other businesses, but still) and time. If you choose a relevant product, you can make good money. Today we are going to discuss metrics that will help you choose a range of products for an online shop.
Let's remind you what dropshipping is. It is a business model in which the entrepreneur acts as an intermediary. You find products, agree to work with a supplier or manufacturer, promote the goods and sell them. You transfer money to the supplier only when the customer pays. You make money on the price difference. You don't need a warehouse, you don't need to set up logistics because the supplier does that.
Of course, when you put a product on the market, you want it to sell well and get a good return on your investment. How do you know if the product will be in demand? There are some metrics and rules of thumb that can help you to anticipate this. Today, let's talk about two metrics that are important when choosing products.
Competitors' turnover
You have identified a list of products you would like to trade. The first thing you need to do is look at how the product is being sold. If the product is not making money then you should not consider it for your business. You need to find out how much your competitors are making from the product and then you can decide whether or not to take it on.
How do you track it? There are special services for this. You have to pay for them, but it is worth the investment. After all, choosing the right product is the first and very important step on the road to e-commerce success.
Number of active adverts
This metric allows you to estimate how much other sellers are investing in advertising. In a dropshipping business, many people use Facebook ads to promote products. If the product is selling poorly, the advertising budget will be low. Conversely, if the product is selling well, the traffic pays off and the business invests even more money in advertising. We cannot get precise information about the advertising budgets of our competitors. But we can see how many ad sets other entrepreneurs are running. If a competitor has more than 20 active Facebook ad sets, we can say that the business is making good money.
But there are some nuances to consider. For example, when analysing a shop's active ads on Facebook, it is important to note that some of the competitor's ads have been active for more than two weeks. The longer the better. If a product has 50 active ads that run for 3-5 days, you should not pay attention to them. This may indicate that the old ads are not working and competitors are trying to revive the product by running new ads. The best option is to have 20-30% of the creative sets older than two weeks.
If the result of the product study has shown that it generates good revenue and has a steady stream of advertising, you can consider this product for your shop. Next, you need to create an interesting and high quality shop, come up with original advertising creatives to play to your strengths and become better than your competitors.
Advice from Step Link
When you start your dropshipping business, it's best to sell products you know a lot about. Then you will understand the problems of your target audience very well. You should have a clear understanding of the pain points and issues your product addresses. They must be willing to buy it for themselves. But if a man starts a shop with products for girls (lingerie, dresses, cosmetics), he will not understand all the pains and problems of the target group. No, of course there are exceptions, but still, girls are more familiar with such products.
If you are not a specialist in any field, it is worth choosing universal niches that are understandable to everyone. One of the best niches is sports and health. These topics are relevant to people all over the world. Health is a key need for people. When it comes to health, everything else seems irrelevant. This is why products in this category are more in demand than any other.
If you find it difficult to determine whether a product will be in demand or not, you should turn to the professionals. With Step Link Platform you have access to market research, product databases with thousands of items, market research, databases of reliable suppliers and much more.
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