People often say: “70% depends on product selection, and 30% depends on operation.” There is no absolutely good product. Only products that are placed in the right market are good products, but many sellers always fail to get the point in product selection.
In fact, product selection is not as difficult as imagined, but everyone’s first reaction complicates the product selection idea, resulting in one wrong step and one wrong step when selecting products.
Many successful cross-border e-commerce sellers have accurate and unique product selection vision. Their common characteristics are to take a vertical and deep route, control the supply chain, and take products as king. This development model has also attracted many novice sellers to follow suit.
In addition to studying the characteristics of product selection, the product life cycle is also one of the most concerned issues for product managers and product operations. Usually, the product life cycle is divided into four stages: investment period, growth period, saturation period and decline period. There are great differences in market demand, capital investment and sales profit in these four stages, so sellers must promote products in a targeted manner according to the product life cycle to achieve twice the result with half the effort.
In actual operation, what key points should we consider for product selection?
(I) Product market capacity
First, we need to understand what products are selling well on this platform, and conduct periodic analysis of products and styles. After the analysis, we can confirm whether this market can be developed. This cycle of observing and analyzing the market takes at least one week to understand the market capacity and trend of the product.
By searching keywords and rankings of each category, we need to know:
(1) Best-selling products: What are the best-selling products in a specific category?
(2) Hot new products: What are the latest and hottest products?
When analyzing, we can combine factors such as seasons, festivals, and promotions to make a judgment on hot-selling products and trends.
(3) Products with the highest ratings: What are the products with the highest ratings?
(4) Consumer wish list: What products do everyone want?
(II) Product profit expectations
First, it is best to ensure that the gross profit of the selected products is above 20%. Only products with large absolute profits are worth choosing, especially for some sellers who do not have any financial advantages, as profits can support sellers to go further.
In addition, the product refund rate (2%~15% refund rate, depending on the category) and costs should also be taken into consideration. All in all, the net profit should be above 7%~8%.
(III) Product cost, quality and supply chain
Does the supplier have the ability to continuously improve the product? Can this product continue to sell through continuous optimization? These are also issues that sellers need to consider. For example, a product originally sold for 30 yuan, but after upgrading and improving a small detail, it sold for 50 yuan. The product cost did not increase much, but the profit could increase.
In short, product selection is a long-term job that requires keen insight, which is very helpful for sellers to understand the market and upgrade product positioning.