Choosing the right product

Now that I’ve been in this business for a while, I’m realising more and more how important it is to choose the type and kind of product you sell carefully.  There are a few reasons for that, but here are the major factors that will affect your performance:

Market Size – how many people demand the product

Fragmentation of market – how easy is it to get hold of these people? A market may be huge, but if your market is highly fragmented, it’ll be much harder to market to and devleop

Average Order Value (Product Value) – all things being equal, a higher value / priced product will generate more revenue than a lower priced / value product.  Go too high though and you’ll see conversion rates drop, but within the $100 – 200 range seems to be pretty good from hearsay.  Our experience has shown that if your products average around $40 – 50; you’ll almost double your average cart value compared to products in the $25 – 50 range.

Competition – not much required to discuss here

Uniqueness – if you have a product that others can’t find / locate / buy anywhere else, you have a much higher conversion rate than others.  This is great when you can manufacture or otherwise sole-source a product which has high demand and often the reason for breakout successes fir small companies.

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