In this video interview, e-commerce expert Rob Snell explains how to judge whether a particular product is good - or bad - to try to sell online.
First, if you're losing money when you ship the product, says Snell, it's a bad product for you. Your profit calculations need to account for time spent on shipping and customer service.
Snell explains that in college he and his brother sold comic books at 75 cents apiece. His dad explained to him, "Son, it you have to sell a lot of comics at 75 cents to make a mortgage payment." Snell began to realize that it takes the same amount of effort to ship a $20 box as it does for a $2,000 box. But it's not just the amount of the total sale, but the amount of profit on the sale.
Snell recommends avoiding ....
Products where entrenched retailers have a built-in advantage, such as volume pricing
Products that damage easily when shipping, causing returns
Products that are easily available, sold on the street corner, pawn shop, or Walmart
Ideally, you want something that people can't easily get in local stores.
Avoid being a generalist. It's best to specialize in a niche where you have lots of product knowledge, as well as a passion for the products. From a search engine optimization (SEO) standpoint, ranking for a very narrow niche isn't that hard.
Use the Google Keyword Tool to see how many people search for that product each month to ensure that there will be sufficient demand for the product and volume of sales.
Look at your competitors' stores and ask: "Can I do better than that?"
Rob Snell is author of Starting a Yahoo! Business for Dummies (2006) and can be reached at www.RobSnell.com. This interview was recorded at the Search Engine Strategies (SES) Conference in Chicago in October 2010.