This is Greg Ray again, continuing on with our “Home Business Evaluation Guide.” It’s time to look at products… specifically, the one question I get a lot is, “What type of product should I sell?”
Many people on the Internet today want to make money from home because they’ve lost their job or they’re having a difficult time and need to make extra money. But they don’t know anything about the process of running a business via the Internet or what products they should sell. They think, “I’d like to work at home, but I don’t know how to choose a product.”
I understand that this is difficult. There are thousands and thousands of products that one could sell on the Internet.
And there are a lot of scammy products and business models thay prey upon the uninformed… and that’s a shame.
So I came up with a checklist to go through to narrow down your product choices…
Size of Market
The first thing to consider is the size of the market. For instance, it is probably pretty easy to find prospective customers online who are interested in a weight loss product. But another thing to consider is the competition… how many other people or businesses are marketing similar products. Looking at the weight loss market again, how many different types of weight loss shakes are there out in the market place… can you go and find a similar product at your local Walmart?
Profitability of the Market
Not only do you need a large market, you also need find a market where customers will spend money on products.
That might sound like a silly observation, but we’re in a global recession. People are worried about losing their jobs. Everyone is tight on money.
As a person who wants to make money online, it’s important to recognize these things.
Look For An Evergreen Product
What do I mean by that?
Evergreen trees are green all year, right? You need to find a product that has a year round market. It’s OK to market seasonal items… just don’t base the future of your entire business on something that people only buy once a year. I mean, how often do you see Christmas trees in the store in June, or Easter baskets in December?
Competitively Priced Products
It is very hard to sell a $40 product when the customer can go to Walmart and buy a similar item for $20… right. And if they can find a similar item at Walmart, they can buy it right then… no waiting for an item to be shipped… and there’s NO shipping costs either. All of these come into play and need to be considered when selecting a product to sell.
Look for products and companies that have been around for awhile and are still popular. The company behind the product needs to both be stable and also continue to produce new products. That’s an added degree of popularity.
“Johnny-come-lately” products are fine. They’re hot… they’re exciting. But will they be around next year?
Look for a low start-up cost to begin your business. Not only do you need to be able to afford these initial start-up costs yourself, but low investment costs will also attract potential business partners who might join your team. Also, low start-up costs mean that will have more working capital to fund things like advertising and day-to-day expenses.
Digital vs. Physical Products
Digital products include eBooks, videos, audios, software, and club memberships that, when the buyer purchases, they then download it or access it with their computer or other electronic device.
Physical products are what you see on the counters at your local store.
Digital products have the benefit that you have no inventory or shipping issues. Physical products have more perceived value, but let’s face it… you can’t deliver a weight loss supplement though a download link.
But you can dropship physical products. In some business opportunities, you take and process orders by phone or on a website, and then have the products delivered automatically to the customer’s doorstep. You never actually personally touch the products.
Remember this… it is much more costly to produce and deliver physical products. 50% or more of the final product price is involved in manufacture and shipping… there’s no way around that. Therefore, those production costs cannot be passed on to distributors.
On the other hand, if your business deals with digital products and services, a lot more of the product’s final price can be passed on to distributors in the form of commissions.
Try for residual income if you can get it. Not every product offers residual income.
Consider this… you do the work to sell Joe or Joan on a product. If he or she buys the product just once you get paid one time. That’s one model.
Another model is you do the work to sell them a product that has recurring billing. The product might be a physical product on “autoship”, or a membership site featuring information products or online services. The customer continues paying month after month. You get paid every time they renew. That’s called residual income or passive income.
Next we’ll discuss this important concept… retail pays the bills.” Click the “NEXT” button below to go on…