Guest post by Philip Murphy from Private Label Sk.in
Private label products give ecommerce sellers the advantages of higher profit margins and exclusivity, but you still incur some risk when trying to select a successful product and develop good business choices.
Through careful research into consumer trends, market analysis, and manufacturing options, as outlined in the tips below, you can put yourself in the best position to develop a product line that will engage your customers over the long term while generating healthy profits for your business.
1. Don’t Skip the Research
Make the most of the abundance of online tools available to research keywords, and then have a plan for putting the result of your research to use. One strategy is to find a product that is attracting strong interest but has not yet saturated the market. Keep track of the information you uncover; much of it can later be put to use in your own marketing efforts.
The powerhouse of keyword research tools is Google Keyword Planner, which is free to use once you create a Google Ads account. Plug in the name of the product you are considering, and it will show you the number of average monthly searches, competition levels and synonym suggestions for further searches. Try to find a product that has at least 2,000 monthly searches, but low to medium rates of competition. Because different search tools give slightly different results, you may also want to try out other resources, such as Answer the Public, which puts search terms in the form of questions, the long-tail keyword research tool KWFinder, or SEMrush, which allows you to narrow your research by region.
As you begin to focus on a few likely products to sell, check out what your competition will be like on Amazon. Natalie Peters recommends seeking out a product where at least one of the top five sellers has fewer than 100 reviews (showing an achievable number of reviews to match in order to compete), the total demand from the top ten sellers should be greater than 1,000 units (showing strong enough customer interest), and no two or three sellers completely dominates the market.
2. Be Aware of Trends
In addition to knowing what is already popular, it is helpful to also develop a sense for what new trends are just beginning to emerge, so you can be among the first to offer what your customers are looking for. Your research may lead you directly to a new product, but you can give the items you are selling a more trendy vibe by adapting the newest colors and styles from other industries to your line. One of the major benefits to creating a private label brand is this ability to customize and best meet marketing demand.
For example, the coloru-matching corporation Pantone selects a colour of the year based on industry and cultural analysis and regularly releases other colour trend updates. These suggestions may have a direct influence on the colour of your products, or they may indirectly influence the look and feel of your marketing and social media outreach.
Other good sources of trends include: crowdfunding sites, especially Kickstarter and Indiegogo; Pinterest, which many of your own target customers may be engaging with directly; the hot selling items on Amazon and eBay; Google Trends, which shows when topics have a peak in queries, as well as where geographically the interest is highest; Oberlo, geared directly to ecommerce sellers; and Trend Hunter, which blends data analysis, AI and human research to track trends.
3. Value Ease of Manufacturing
There is a temptation seek out the absolute cheapest manufacturing in order to boost your business’s profits but be aware that this approach can backfire. Instead, determine value by choosing products that are easy to get and have a high enough quality that will encourage customers to return to your brand.
In many cases, a domestic manufacturer will have a faster turnaround, which will help you respond to your market. Domestic manufacturers also reduce the risk that you may be banned from Amazon for failure to fulfill orders or complaints about quality.
You should also seek out a manufacturer that specialises in the products you hope to sell. They will already have strong contacts in the industry for sourcing components and ingredients, and they will be familiar with the applicable packaging, labeling, and safety standards.
No matter which manufacturer you choose, make the most of the relationship by treating them as partners in your business. Some tips include meeting with them regularly, sharing your long-term goals with them and following their advice about sourcing and production.
4. Differentiation is Key
It pays to make your product similar enough to your competition that you show up in the same searches, but also different enough that you attract customers’ interest while also avoiding any claims of copyright infringement. First, do your research on your product and its name and logo to make certain you are not unintentionally plagiarizing. Get this step done before production begins to avoid costly changes later.
One way to differentiate your product is to make improvements to it. During your research, read the reviews of competing products and see what buyers complain about the most. You can also research editorial reviews or buyers guides to see what most often disappoints people. Being the first to correct a shortcoming can send your product to the head of the pack.
Other ways to make your product stand out are adding or removing features, changing the materials the item is made from and altering its color, scent, pattern or texture. You can also adapt a product to a completely different market, as in the case of creating work aprons for industrial use.
5. Look for Evergreen Niches
While responding to trends can generate new interest in your products, you want to be careful to not invest heavily in a fad that will fizzle out before you have a chance to move your inventory. For example, interest in fidget spinners sharply peaked in May 2017 and then declined rapidly. The more stable strategy is to stay in niches that have maintained a strong following for a long time.
Cooking, gardening, skin care and beauty, and child care have always attracted interest, in part because they help solve problems and ease anxieties that many people eventually face. Teenagers may not always want a fidget spinner, but they will always be concerned about clearing up acne, just as parents will always want to buy linens for their child’s bedroom, and homeowners will want landscaping tools to maintain their property. Tap into the areas where your customers have interest and concerns, even as trends come and go.