Best Types of Products to Sell Online

Selecting the right product to sell online will be the most important decision you take when getting started.

But not all products are created equal. Some are better suited to sell online compared to others.

Before starting Amazon.com, Jeff Bezos made a list of 20 potential products he thought might sell well via the Internet. His list included software, CDs and books. After reviewing the list, books were the obvious choice, primarily because each book is standard all over the world. Books are light weight, durable. There is no need to ‘touch and feel’ it before buying a book.  Starting with books was a great decision.

If you are thinking of selecting an item to start selling items online, check if your product has these attributes.

Hobbyist Product

Everyone has that one thing/product they love so much that they have an unlimited budget to buy it. They will buy that product even if their cupboard is full and there is no more space.

For some that one thing is shoes, for others, it could be watches. For many it is latest phones, for others, it is video games.

Customers buy hobbyist item repeatedly. They don’t mind paying high amount for these items. They spend their free time going to the internet, researching about these products. They are ultra-passionate about these hobby products.

Hobbyist products are easier to market as well. Their pictures are shareable on social media. Moreover, customers are so passionate about these products that they market these items to their friends as well! People have communities for these categories of products where they hangout making it even more easy to reach these customers.

These products are also Brandable. You can build good stories around them.

Consumable Products

Who are the best people to sell your products? Answer: Your own past customer…

It is significantly easy to sell to same product to your own past customers, then to convince new prospects to buy for the first time.

So if your product is consumable, customers will buy again from you without the need for additional marketing.

Products such as health supplements, beard oils, cosmetics have high repeat purchases. Their customers have a high lifetime value to business.

On the flip side, you don’t want to sell a product which will be a one-time purchase for your customer. Because even if you do a great job with delighting your customer, you won’t get additional business from your satisfied customer.

You will have to constantly find new customers. Acquiring new customers is hard, expensive and time-consuming.  You don’t want to be on the treadmill of constantly finding new customers to replace your old customers.

High Margins

Big companies can afford to sell items at low margins (even at loss) to acquire new customers because they have a huge catalogue of items in their backend, which they can sell to the same customer in future and make money over time.

Also, they have VCs that believe this hypothesis and are happy to write big cheque to fund these big companies.

Not you. You have to meet payrolls, rent, supplier dues, and what not… It is better to sell products which yield high margins.

High margins give freedom to your businesses. You can give better customer service. High Margins give enough cushion to try new ads, new method of customer acquisition, new experiments.

Your selling price should be 2x to 5x of your cost plus shipping.

Difficult to find Locally

If you want to buy a toothbrush, where would you buy from? You would get it from a local shopkeeper. But if you want to buy a rare collectible of your favorite movie, you won’t find those in a local store.  You will try to search them online.

Small & Light Weight

It is easy to store, ship and replace small light weight items. Additionally, you can offer free shipping option to your customer because it costs so less to ship small items.

Proprietary Products

You want to sell something that is unique that cannot be replicated easily by others. If it is easy to copy, then there is no competitive advantage.  Soon you will attract competition.

It is better if you have a highly customizable product that requires special machines/ complex processes to manufacture. Then it will be difficult for competitors to enter your field.

Theft Proof

I know of a seller who received orders for 12 Samsung phones from a marketplace. All were Cash on Delivery orders from Uttar Pradesh. He promptly packed and sent the parcels. After 9 days he got all the parcels back marked as undelivered by the courier company. On opening the returned parcels, instead of receiving back the phones he had sent, he received 12 red bricks. He is still fighting with marketplace and courier company to recover the loss from this incident.

This happens regularly. There are cases of theft by the courier company or by fraudulent buyers or sometimes by their own staff.

Instead, select a product which cannot be readily exchanged for cash in market. Products like mobiles, laptops, gold coins have high risk of theft because they can be easily exchanged for cash.

Low number of SKUs

My eCommerce business orniza.com has 15,000+ products. This makes running the whole operation very difficult.

It is difficult to have good product description, titles for each and every 15,000 product. Unique titles are important for SEO in terms of long tail keyword traffic. Lot of effort is spent in constantly monitoring and updating inventory quantity of so many products.

On top of this most of my products are made one time and never repeated. So all the product photography and listing efforts, getting reviews, SEO efforts are wasted once the product goes out of stock.

On the other hand, if you have fewer SKUs and then you can give them the attention they deserve. You can invest in better photography, videos, get reviews from customers. Even your product and category pages are better optimized.

Your customer support becomes easy. You can easily train your staff about features and product troubleshooting.

Items with Low Variance

Customers do not get to touch and feel the product before buying. They see the picture and make judgment. Your returns will be lower if the item has low variance from the picture seen on their mobile and actual product delivered.

As an online merchant, you don’t want returns.

The top return reasons in apparel category are size variance (either too big or too small), color difference and fabric “feel” difference.

All this after you have spent huge efforts in getting a customer, building trust, getting him/her to enter credit card details to pay and delivering the product. Words can’t explain how much efforts have been wasted. Getting paying customer is hard and the last thing you need is an unhappy customer who wants to return your product.

These products are support nightmare. Stay away to get good night sleep!

Research for selecting new product

It is important to get a rough idea on market size of your product. There are many ways to do proxy research.

Amazon: To see top selling items in your category and price points. You also get added advantage of reading feedback comments.
Google Trends: To see if search (and consequently interest) on your product term is increasing or decreasing compared to other products.
Google Adwords: To see search volume and the cost of getting in front of customers searching for your keyword.
Terapeak: To see top selling items on eBay.

I will write a deeper article on research in future.
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Final Thoughts

Competition in your category is generally Good!

Products which have competition means there is proven a market for that product line.

Even better if there are companies who are spending ads on Google and Facebook. That generally means advertiser is making enough money that she is ready to pay Google/Facebook for getting new prospects.

You should then focus on differentiating yourself. More on that in future articles.

Constraints are Good!

This is just a wish list of product attributes to make your life easy. Your product might not have some of these attributes or will have some other challenges.

Then you can work on developing capabilities to overcome the challenge.

For example, if you were selling a product that requires a lot of customer support and service is a pain. But if you work on building a great support team then good service becomes your competitive advantage.

Remember: “If there is no hard part then you don’t have a business”

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