How to choose the right product to sell online?

How to choose the right product to sell online?

What products are the right ones to sell online?

If you’re starting an online business, you will need products to sell. But not all products are created equal so what could be a successful product for one person or business will be an absolute disaster for someone else. What will be successful for your business will depend on a mix of what you are interested in, your capabilities, your colleagues, your cost structure, your branding and marketing efforts, your attitude, the profit potential of the products that you choose, the demand for the product (both now and in the future) and your existing and potential competition. How you plan to deal with changes to the current environment will also play a key part in determining the level of your eventual online business success.

What makes a good online product? If you’re just starting out with an online business, it might seem quite daunting working out just where to start. In deciding what products you will sell, there are many important considerations:

  • How much the products will cost to produce or distribute?
  • Who will you source the products from, and how long will they take to get to you?
  • Who will you be selling the products to?
  • Why will your customers buy the product, and what will make the difference in their selection between one provider of the product and another?
  • How competitive is the market, and what’s to stop other new competitors entering the market and taking your position?
  • How often do they buy the product and how much do they need to know to buy it?

A great online product is one that is one that is:

  • hard to find in your local area
  • is popular amongst a good proportion of your target market
  • can be easily posted, picked up or delivered
  • is not too complex otherwise it may require many repeat visits to your website in order to purchase it, or may require detailed visits to an offline showroom to understand the different mixes. That would increase the chances of an abandoned cart or sale elsewhere

Whether the product is well known or not can also be a key determinant in whether your product is successful online, but this depends on the product itself. A branded product can give customers confidence in the quality of the product as they know the brand but if it is carried by multiple retailers then customers may shop around. The same rules apply to online stores as offline shops when it comes to brands: brands need to support your own brand and cannot by themselves be the whole source of advantage over your competitors that your store’s success is based on.

Testing to see if you have chosen the right product

How do you go about finding the right product to sell? One place you can start is to think of something that you’re passionate about and find a product related to that area. For example, if you are a keen mountain-biker, you might do well selling bicycle supplies as it’s something you know and love. If you love fishing, then tackles and lures might be right for you. The reason this approach can work is that if you know a product range intimately, you will better understand who is buying from you and most importantly why they will buy this product. Understanding the gaps in the market can give you a significant advantage in determining what product to source – but you can’t just choose anything as even an innovative idea can be a flop if there are not enough people to support it, or if the cost of selling it exceeds what you make.

This does not mean that you can’t succeed with something you don’t know anything about. Sometimes not knowing the product can give you an advantage if you are planning to sell to others who are new to the market as well – because the kinds of questions you ask in learning about the product, and the way that you go about finding out about that product in order to sell it, can give you great insight into what your potential buyers might be thinking and how they will go about researching the product they will buy. If you are new to a product, it’s a great idea to keep a log of what steps you go through in finding out the product. Jot down the search terms you use to look up things, note the competitors you come across and in the order you found them. This can be valuable information to look back on at a later stage when it comes to creating your shopping cart website as you will gain insight into the potential pages you need in the site, what category names people might be looking for and how to place your products in the site.

Who are your customers?

Understanding your customers is absolutely essential. Too many people start a website business and when asked who they are selling to will give a reply to the effect that they’re selling to consumers, or to anyone who they can find to purchase their products. This approach is a short term one and even if successful in the short term will not result in long term sales growth or protect you against the competition. If you don’t understand who exactly would buy from your website and why they would do so, then you are opening yourself up for competition who do understand this key point and specifically talk to those customers needs.

What problem are you solving?

Ask yourself what need in the market will your business fill? Just offering a particular product or set of products will not give you long term business results. Put yourself in the shoes of the person buying the product you are thinking about selling, and ask yourself what don’t current products in that area do. For example:

  • Is this product being sold at all?
  • Is the quality too low for the price?
  • Is the price too high for the quality?
  • Is the product too hard to find?
  • Does the product take too long to buy or receive?
  • Is the product not attracting the right kinds of people?
  • What are current businesses in the market doing wrong when selling this product?

You need to find something that your store will do differently from the current marketplace. Will you be faster to market than your competitors, will you bring more products to the market faster, do you have a lower cost of production so can offer your product significantly cheaper? can you find a new, alternative use for the product? What problem can you solve in the end customer’s life by selling your product?

Answering this question will also help you determine if you should sell your products online of offline. If your target market of customers rarely use the Internet, all live in your local area or are technology-phobic, and are frequently found at local markets, then a stall at a local market may be more successful for you than an online store. If your target customers live in outlying rural areas with small populations such as in far north Queensland or WA, then an online store can give you a huge advantage – you may have little competition at all.

What is the size of your potential market?

If you’ve found a customer problem that you can solve and a way to solve it, knowing how many people potentially buy your product online is also important. For this you can use a tool like Google’s new AdWords Keyword Planner Tool. Here’s the basic process:

  • Put yourself in your customer’s shoes and write down search phrases that the customer might search for to find that product
  • Go to the Google Keyword Planner Tool and find out how many people search for that term in your target geographic area per month
  • Using your calculator, you can work out a rough potential number of visitors and sales you might get to your site. Only a fraction of the people searching for a phrase will ever click through, and in general an accepted level is between 1% and 3%. So multiply the number of monthly searches for your geographic area by 2% to get an estimate of the potential total click-throughs (assuming you’re on page one of the search term) per month.
    So for example, for a product with 3 key word phrases that are used to find it, each with 10,000 searches per month:
    Keyword 1: 10,000 x 2% = 200 visitors
    keyword 2: 10,000 x 2% = 200 visitors
    Keyword 3: 10,000 x 2% = 200 visitors
    Total visitor estimate: 600 visitors per month.
    This assumes that you’re on page one in the search engines for this search term so you will then need to determine how hard it will be to get to page one for that search term. To do this, put the search phrases into Google and visit the sites of the top players. You can make an assessment for yourself as to their size, professionalism and likely competitiveness against your business in this regard.

Note:If the market is competitive, that’s not a reason not to start your business however. It just means that you have to tackle the market differently. You will need a clear point of difference so that your shopping cart website makes the right impression, is memorable and has the right mix of price, service, usability, product quality and delivery.

Shipping costs

Studies confirm that one of the main reasons that customers abandon shopping carts is because of unexpected shipping costs, or shipping costs that don’t seem reasonable. Many consumers have no idea what it costs to send a package or the cost structure of sending packages via shipping providers like Australia Post or courier services. If you want to choose a product that sells you must take into account how you will post it as part of the decision making process. Customers will have pre-conceived expectations of what something costs to post, and these may or may not be realistic. But as they make the buying decision and not you, it is those pre-conceived expectations that you must address in determining your shipping policy.

Most shipping providers price packages on their dimensions and weight so you need to take this into account in determining how you will actually post out items. Payment provider buyer protection often includes a requirement to send an item out with tracking so the minimum cost of a tracked package must be taken into account as well. Choose products that are easy to fit in to standard size shipping boxes or containers or light to post.

Free shipping for orders over a certain level often helps, or flat rate shipping but if you are selling products of different sizes and dimensions, and of varying values you may wish to have the shipping costs in your store reflect your actual costs which is something you can then promote to your customers (as they can verify shipping costs for themselves if they wish). If you are doing this, make sure you choose a shopping cart that can handle different package dimensions with a real time shipping calculator (like in Ozcart) otherwise you will run into trouble with this strategy – either considerably overcharging or undercharging your customers.

Short or long term product trend?

One thing you should also establish is whether the current market for your product is a short term or long term trend. This will be partly related to your own sense of the market and common sense, but there are also search tools you can use to determine the growth or otherwise of a product. Google Trends is one tool that you can use in this regard.

Sourcing the product – finding suppliers

There are different ways you can go about providing the products to the marketplace:

  • You can source them from a local producer, or distributor
  • You can import them from overseas
  • You can make them yourself
  • You can get them sent directly from the manufacturer to the end customer without sending the invoicing documentation (this is called drop shipping)

You should cost out each of the options and balance this against the delivery time it will take the supplier to get the product to you or your end customer – this is where understanding the market comes into play: whether customers care about how long a product takes to get to them depends on how specialised the product is, whether you are personalising the product for them or not (e.g. customers will expect customized wedding invitations to have a longer lead time than generic art and craft supplies), and of course what your competitors are doing. Even in markets where prices aren’t very important, customers will shop around to some extent to see if they can get something close to their ideal for faster and/or cheaper shipping. Balancing shipping costs and times with production must be factored into your plan.

What are your strengths and weaknesses relative to your competitors?

A good starting point for considering the relative merits of your ability to deliver a product online and make a long term sustainable business out of it is to consider your business strengths and weaknesses, as well as factors external to your business that could give you new areas to target or threaten your existing position. Marketers call this analysis a “SWOT” standing for strengths, weaknesses, opportunities and threats.


SWOT is a quick and easy analysis to do and can give you some powerful insights into your business and competitors. When jotting them down remember that strengths and weaknesses are all about your business, whereas opportunities and threats are things external to your business.

On your list, you may see things like:

Strengths and Weaknesses


  • Your sources of competitive advantage
  • Own capabilities (e.g., your personal background)
  • Insights into your industry (e.g., through your contacts or ways of picking new trends in your industry)


  • Cost structures relative to your competitors
  • Physical location and shipping costs from your location

Opportunities and Threats

Business Opportunities

  • Ways to create barriers to new entrants e.g. partnerships/alliances
  • Opportunities created by new government regulations (the recent change of federal government may create new opportunities)
  • Opportunities created by Social media trends
  • Opportunities created by new or changed technologies

Business Threats

  • Potential for new business startups
  • New government regulations (the recent change of federal government may see new negative rules here)
  • Changes in competitor strategies

Where to next?

This article gives you an idea of the things you can think about when choosing a product to sell online, and how to make sure that you choose a product with a long term future so that your online shopping cart website is a success. Careful selection of a product and your homework on the likely size of the market and potential competition will help you determine an appropriate strategy for your business to take advantage of this market and create a strong and loyal customer base.

The shopping cart that you choose will also play a big factor, because once you select the right product and drive those customers to your site, converting them from browsers into buyers is essential. There will always be some traffic you can never convert – it may be competitors checking up on you, search engine visitors or people who are not yet in the market for your product and only browsing.

But of the people who are serious buyers, being able to present your products in the best possible way, having the right prices and policies and have a shopping cart website that is impressive and leads the customer through the buying process will make a big difference to your conversion rates.

Choosing the right shopping cart technology platform for your business shouldn’t be an afterthought from choosing a product, it should be integral in determining your product and marketing strategy in determining whether you start your online business and how you go about it.

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Ozcart Ecommerce

Ozcart has been in business since 2006 and is an online, hosted shopping cart that you can use for your current or new online store. We offer so many features for the same low price. In fact, we are addicted to adding new ones to ensure that we remain one of the best choices for a shopping cart.

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