Every day hundreds of people create innovative new products that are just waiting to find a buyer. In the days before the Internet, getting a new product to market was as much a matter of luck as marketing smarts. You had to either convince a local retail shop to carry your product or find a distributor or manufacturer who would add it to their catalog and help market it to potential customers.
But the web has changed all that. Today, you can create a product and sell it online with relative ease. You can experiment with different models, colors, styles and price points on places like ebay.com before you even launch your idea. In fact, most major name brands do the very same thing with products they create. If you play around with search words on ebay.com, you will find famous makers experimenting with their products. They will put the same product up at different prices or different colors or with different options or designs. In many cases, ebay.com and other online auction houses have replaced costly focus groups and market research efforts. Instead, companies can get instant feedback on styles, fashions and pricing in a fraction of the time it used to take them to do it traditionally. In essence, the Internet has become one big market research project for nearly anyone who has a product to sell these days.
Many companies not only use these online markets to test existing products, but to test ideas. Fashion designers are a good example. If you look hard enough, you will find samples from major designers in online auction houses. They are just prototypes of fashions that may or may not make it to market, depending upon how they sell. Again, you’ll see experiments with colors, styles and pricing that helps these design houses gauge what will sell in the mass market.
If you have a product to sell, you can do the same thing as the famous names. Use ebay.com or a similar auction house to get valuable insights regarding your own product. Experiment with different product descriptions, photos and price points. See what does and doesn’t sell. If you plan to market your product with different colors, styles or features, put them up in an online auction environment to see what sells. This will help you define and refine what it is you’re selling. You will start to see patterns in the buying habits that will guide you in getting your product ready to market.
A good way to solidify your pricing is to set the “Buy It Now” price at your ideal price point. See if it sells before normal bidding is completed. If it does then your price point may be a bit low. Set it a little higher and see what happens. If it doesn’t sell at the “Buy It Now” price a couple times at the higher price then you know you reached the price ceiling for your product. If your product continually goes in the auction during regular bidding, look at the final price versus your “Buy It Now” price. You’ll begin to see where the ideal price lies that will move your product.
One of the great advantages of using this method is that you can often create just a prototype of the product and see if it sells. Why waste moneymaking dozens or hundreds of items if you can’t sell the original? Conversely, if it turns out that you have a real hot seller on your hands, you can always ramp up production quickly during the time your item is being auctioned. We know of one t-shirt entrepreneur who simply mocked up the shirt design, posted it on Ebay, took orders for a week and then placed an order for the quantity of shirts ordered with a silk screener. In selling the item, he told buyers to allow two weeks for delivery since it took the silk screener a week to produce the order and another week for it to arrive via mail. The result: Strong sales without putting a dime out up front for the idea. The orders covered the cost of printing the shirts, shipping and a tidy profit. If he didn’t sell a single shirt, he wouldn’t have lost anything except the cost to place the listing on Ebay.
Now, we certainly don’t recommend that you sell phantom products. You can find yourself backed against the wall if your product takes off and you can’t fulfill orders. We use this anecdote simply to highlight how you can test ideas without investing your life savings and mortgaging your house.
One of the biggest pitfalls of starting your own business online is cost. While it its far cheaper than opening a traditional bricks and mortar store in your own community, you do have to consider the costs associated with creating and stocking products, making sure you always have sufficient raw materials and finished product available and managing all the shipping and customer service aspects of filling orders.
However, running your own business means more money stays in your pocket compared to other options. You don’t have to pay a middleman to handle inventory for you and you do get total control of your operation. In addition, you get to be the decision maker in the business, creating and refining ideas as they come to you and seeing them through to market. Nothing is more gratifying than getting paid for something you’ve developed.
While many entrepreneurs are happy with stores on ebay.com and other online auctions, you may find that it’s more effective to take your business online as a standalone shop. We will go into more depth on that.