You want to be a seller that houses the best products for your customers. You want to anticipate their needs before they even have a chance to put them out there. You want to create a brand name for yourself that shows “I know my customers well”.
How do you achieve all of that? Through Product Research.
Product Research helps you validate your ideas and take them to the next level. Especially for private label sellers like you, the time spent on product research could help you scale faster.
Why Is Product Research Important and How Does It Help To Increase Business Profitability?
The guessing game is great when it’s limited to Pictionary or figuring out your opponent's next Monopoly move, not when you have to determine the success of your product. Product research can not only help in identifying key issues of your product development process but also avoid costly mistakes.
Why Product Research is Important
Makes your business customer-first:
The priority of great research is to put you on the same page as your customer. This will help you evaluate your idea and test if there’s a need for it. Additionally, you would get a better idea if your target group is even looking for a product like that in the first place. SmartScout will let you evaluate all the subcategories on Amazon with estimate revenue.
Helps make informed decisions:
Too many cooks spoil the broth but the right data can make a difference. When developing a product, you’re taking various decisions into account — product aesthetics, ergonomics, features, price, marketing positioning, and much more. It is natural to have varied opinions and preferences from everyone in the organization. That’s when you can refer to your product research Bible which contains all the data-backed information you’ve collected. Make informed decisions that would benefit your product.
Keeps your product relevant:
If you have products with many competitors, product research will help you analyze whether the available options on the market are meeting the needs and expectations of existing customers. If not, you’ve got an opportunity to help change that with your product.
Reduces risk and cost of introducing a new product:
What if you had to halt manufacturing of your product because your customers are no longer interested in what you’re making? Terrible, right? With product research, you can avoid this shortfall by evaluating if your product will sell before you enter production. This process also ensures you avoid unnecessary production costs while protecting your profit margin.
Research by Deloitte shows that customer-centric businesses are 60% more profitable. But still, many private label sellers still rely on their experiences to decide on what products are worthwhile to sell. While this approach research will still work for many private label sellers, we are simply outlining the undeniable value product research has in helping build successful products.
Questions Your Product Research Should Answer
Product research is mostly about finding answers to questions about your target market, competition, customers, and the product itself.
To help you in your journey, we have crafted a set of 21 questions you can use as a blueprint to start your product research.
Questions To Ask About Your Target Market
1. How big is the potential market?
2. What is the growth of the market? Is it a fad, flat, growing, shrinking, or seasonal?
3. What are the past, current, and future trends in my target market?
4. How do retail stores and e-commerce sites define my product category?
5. What channels are used to market to customers?
Questions To Ask About Your Competitors
dbfba6. Who are my competitors?
7. How well are my competitors selling?
8. What keywords do my competitors use in their product listings?
9. How do my customers review my competitors?
10. How do my competitors fulfill orders?
11. How do my competitors provide support?
Questions To Ask About Your Customers
12. Who are my target customers, and what personas do they fall into?
13. What do my target customers care about? What is important to them?
14. What emotions drive customers in my market?
15. How do my customers get information about products in my market?
16. What keywords do customers use when searching for trending products?
17. Why would customers buy my product? Does it satisfy a passion, relieve a particular pain, meet a need, or solve a problem?
Questions To Ask About Your Product
18. How much will customers pay for a particular product in my market?
19. What features are important to a buyer in this market or of similar products?
20. How do customers perceive my brand (if you have one established)?
21. What might differentiate my product and make it a winning product?
How to Conduct Innovative Product Research
Now that you have an understanding of ‘why’ product research is important, here’s ‘how’ to conduct product research.
There are two types of product research: quantitative and qualitative. Each arms you with a different set of information and data needed.
Let’s take an example of the Amazon marketplace to understand what Quantitative research means. Please remember that the general concepts apply regardless of the sales platform you use.
Search Frequency Rankings (SFR): If you want to know how many people are looking for your product type and how often a keyword is used, SFR tells you just that! It is wise to pay attention to the trends over a longer period of time. In some product cases, there’s a spike in demand during certain seasons and holidays and then a steady decline.
Pricing Distribution & Pricing Pressure: Ever wondered how to strategically price your product? The data from pricing distribution helps you analyze how your product should be priced and the margins you’d need to make a meaningful profit.
Review Rankings & Quality: How often have you gone to the 4th or 5th page of Google? We’re guessing rarely. Similarly, your customers on Amazon are only browsing through the first 2 pages to get the product they need. Your goal is to get to the top of page 1. Reviewing rankings will help you determine how to boost your page position and analyze what’s the average rating score your product is competing against.
Competitive Landscape: Product research is incomplete if we don’t analyze our competitors. Competitor analysis gives away a data mine to play around with. You can track the pricing, average rating, review score, and consider what they are doing right (and wrong). Once you get a fair idea of what works and doesn’t, you’ll better understand how your product can stand out and increase profit margins.
Click Share & Conversion Share: Impressions aren’t enough, you also need to determine how many people are clicking on your product, adding it to their basket, and actually buying the product. Looking at related keywords is also ideal to discover how they impact the purchase process. The click-through rate and keyword research together are valuable to understand if there’s a brand that has significant control over the market share of your product type.
Factory Pricing: By understanding the price on Amazon vs manufacturing prices, you can review the margins to expect. Is the pricing apt enough to be in the same space as your competitors or would you need to lower your costs? This step will help you decide on pricing that ensures profitability.
If all the above steps seem like too much for you, worry not, SmartScout makes it easy to analyze the opportunities present on Amazon. Using SmartScout, you can make decisions that increase revenue and make your product stand out!
Scrolling on Pinterest, Etsy, TikTok recommendations, reading reviews on Amazon - everything counts as Qualitative Research. This type of research helps you find trending products.
You can look up on Amazon if they already exist, if not, congratulations! You’ve got an opportunity to make the first mover advantage.
To understand more about how to vet a product opportunity, read more about it in this article - How to Research and Vet a Product Opportunity.
Why the Right Team is Essential to Conduct Product Research
DIY is great for baking a cake, but not necessarily fit for analyzing all the intricacies of product research.
Having a partner helps make the product research process seamless. Here at Gembah, our experts help you with product research across all major product categories. We help you analyze the information and outline how to leverage that information to meet your business goals.
You’ve got the numbers, we’ll help you modify your design, structure your go-to-market plan, and shape your marketing tactics.
Research’s Done, Now What?
Gembah’s partnership doesn’t just end with research. No matter where you are in your product journey, Gembah is there to help you.
Be it design, sourcing, finding suppliers, procurement, manufacturing, or launching the product in the market — you can count on Gembah’s network of vetted experts to help develop your product idea from concept to finished product reliably.
Reach out today to get started with your product research journey.