Picking winning products can be a time suck. There are several product research strategies that deep dive into niches, seasonal strategies, one product branded stores vs general stores etc...
But, across all of the different product research strategies there are few core principles that they all share. Here's 5 tips for picking profitable products!
One of the best ways to make more profit from your store is to expand your profit margin. While increasing the price of the item may be the first thing you test, adding cross-sells or up-sells to your product is one way you can maximize your profit. Even by tacking on a few extra dollars at checkout can quickly add up.
Cross-selling is the practice of introducing additional (usually complimentary) products to your visitors. For example, if your store sells memory foam pillows you could also offer items like pillow cases, sleep spray and so on. These products are usually offered on the product page as a bundle or during the checkout process.
Cross-selling is a highly-effective strategy used in almost every industry to boost sales and value to the customer.
Up-selling is the practice of marketing higher-end (and higher price) products to your customer. For example, if you manage an electronics store that sells speakers when a user is looking at a 6 inch speaker you would use images or chart to show how much better your 9 inch speaker is. Generally, up-selling has a better conversion rate than cross-selling.
The key to success with cross-selling and up-selling is to create a product offer that fits your customer needs. Create more value for your buyer and conversion and profit will follow.
Every dropshipper has struggled with shipping at some point. Whether its shipping times, packing quality, or cost it is a constant battle we all face. That is why it is crucial to sell items that are small, light weight and easy to ship.
While this isn't as important when you are testing items from some place like Aliexpress, once you start to scale your store and move to a fulfillment service you will quickly realize how important this is.
Many fulfillment services like, ShipBob will pack several items into one shipment and only charge shipping once. So if you sell multiple items to one customer you only pay shipping once, erasing a big portion of your variable expense.
Additionally, as you scale you will inevitably have returns. While you may ask your buyer to pay for return shipping, in today's world that doesn't go over very well. If your item is cheap and easy to ship getting items returned takes a lot less out of your pocket.
Common items that you can find at any store are NOT good dropshipping products. This doesn't mean they are bad products or won't sell online, it just means that if your plan is to take a boring old product like a spatula, run Facebook ads to a Shopify store and expect success, you will fail.
Your product has to stand out in someone's distracting social media feed. You have less than 3 seconds to grab their attention, and if your lucky 10 seconds to show off your product. This means your product has to be something that will draw interest and your ad creative and copy needs to be spot on. Not to mention, that's just to get the click to your store, where you then still have to peak their interest through the checkout process.
Perceived value means that users will associate a price to the item as soon as they see it. For example, when you think of a coffee mug you can easily associate a price range. It may go up or down based on the quality or size, but you can easily determine it's perceived value.
Winning products do not have a perceived value because they are unique and solve a problem. Their price is based on the uniqueness and value of the problem they solve. This is why comfort products like posture correctors and back braces do well for dropshippers. They solve a problem that is high value. If you have have back pain how much would you pay to have it disappear? Probably a lot and your willing to try almost anything.
Selling the value of the problem your product solves means you can increase your profit margin exponentially higher than products that are common place with a value already attached to them.
This is particularly important if you are selling a low cost item in the $10-$20 range. If you are selling low costs items you will quickly learn that to sell enough items to make a decent profit you are going to have to sell a lot products. That means more time fulfilling and tracking orders, more customers to communicate with, and more headaches.
However, if you can bundle low cost items into packs of 2, 3, or more you can make more profit with less orders and headaches. Many sellers do this successfully by adding bundles discounts like by 3 for 20% off, but if you are competent copywriter you may be able to sell the value of having multiple of the same item. Whether that means selling different variations like color or being able to have multiple uses.