Discover Profitable Shopify Products in 2023

Table of Contents

1. Introduction
2. Importance of Products in E-commerce
3. The Drop Ship Test Method
4. Finding Winning Products
   • Exploring Ads and Social Proof
   • Investigating Product Viability
   • Checking Competitor Prices
5. Calculating Costs and Profitability
   • Freight and Courier Costs
   • Pick and Pack Costs
   • Payment Fees and Customer Acquisition Costs
6. Profit per Customer and Margin on Ad Spend
7. Limitations of Method One
8. Method Two: The Problem Solving Method
9. Importance of Unique Products and Building a Brand
10. Conclusion

Article

Introduction

In this article, we will delve into the key aspects of finding winning e-commerce products and ensuring their viability. As any experienced marketer knows, having a high-quality product is essential for successful digital marketing. Without a good product, even the best marketing strategies may not yield profitable results. We will explore methods to identify winning products, calculate costs and profitability, and understand the limitations of relying solely on one method. Additionally, we will introduce an alternative approach known as the problem-solving method, which involves negative review research and collaboration with suppliers. By the end of this article, you will have a comprehensive understanding of how to find and evaluate profitable e-commerce products.

Importance of Products in E-commerce

Before diving into the specifics of finding winning products, it is crucial to emphasize the significance of products in the e-commerce industry. Regardless of how skilled a marketer you are, if you promote a low-quality product, your digital marketing efforts are likely to be in vain. Consumers today have access to countless options and are more discerning than ever. They expect value, quality, and innovation from the products they purchase. Therefore, your focus should not only be on marketing but also on sourcing high-quality and in-demand products that resonate with your target audience.

The Drop Ship Test Method

The drop ship test method is a popular and cost-effective way to evaluate the viability of potential e-commerce products. This method, which can be employed even by those with limited marketing experience, allows you to minimize financial risks and determine if a product has the potential to succeed. The following steps outline how to conduct a drop ship test effectively:

Exploring Ads and Social Proof

To begin, you need to explore various ad platforms to find products that are currently being promoted. Platforms such as Facebook, AECOM Hunt, and Power Ad Spot Ads can be valuable sources of information. Look for recently uploaded ads that have received a high number of likes, indicating social proof.

Investigating Product Viability

After identifying a potential winning product, the next step is to investigate its viability. Start by checking the comments on the ad to ensure that it is still active and engaging users. Real and recent comments are a positive sign and indicate that the product is still in demand. Conduct further research to determine if the product is available through drop shipping suppliers such as AliExpress. Checking for multiple versions of the product suggests it has been successfully converted in the past.

Checking Competitor Prices

To assess the potential profitability of the product, it is essential to analyze competitor prices. Search for the product on e-commerce platforms like Amazon or eBay and observe the price range. If a product is heavily saturated with cheap alternatives, you may need to adjust your pricing strategy accordingly. However, if you find products with good reviews, it indicates that the market is receptive to the product, providing an opportunity for customization and improvement.

Calculating Costs and Profitability

Determining the costs involved and potential profitability of a product is crucial before proceeding further. The following factors need to be considered:

Freight and Courier Costs

Estimate the costs of shipping the product to your target market. This can be done by gathering information on the product's weight, volume, and box size. Contact potential suppliers to obtain accurate data for precise calculations. Use online tools or contact local couriers to determine shipping costs accurately.

Pick and Pack Costs

Consider the costs associated with picking and packing the product. This includes packaging materials, labor, and any additional fees charged by third-party logistics providers (3PLs) or fulfillment centers. Obtain quotes from different service providers to find the most cost-effective option.

Payment Fees and Customer Acquisition Costs

Factor in payment fees and customer acquisition costs when calculating profitability. Include any transaction fees associated with payment gateways or buy now, pay later platforms. Additionally, estimate the average amount you spend on acquiring a new customer through Facebook ads or other marketing channels.

Profit per Customer and Margin on Ad Spend

To determine the viability of a product, calculate the profit per customer and margin on ad spend. This reveals if the product can generate sufficient profit margins to sustain marketing efforts. Aim for a profit per customer that allows a comfortable margin on ad spend. As Facebook ad costs continue to rise, it is crucial to have enough margin to sustain profitable marketing campaigns.

Limitations of Method One

While the drop ship test method is a valuable starting point for finding winning products, it is important to recognize its limitations. As more competitors enter the market, the quality of products can decline, and Facebook ad costs can increase. To overcome these challenges, it is essential to focus not only on finding unique and improved products but also on building a strong brand. The next section will explore an alternative approach that emphasizes problem-solving and differentiation.

Method Two: The Problem Solving Method

The problem-solving method involves identifying products that solve a specific problem or fulfill a need in the market. By conducting thorough research on negative reviews and customer complaints, you can uncover market gaps and develop innovative solutions. Collaborating with suppliers to customize existing products or create entirely new ones can give you a competitive advantage. This method requires a higher initial investment but can lead to long-term success by building a brand around unique and high-quality products.

Importance of Unique Products and Building a Brand

In a saturated market, having unique products is imperative for standing out and attracting customers. The success stories of brands like Dyson demonstrate the power of innovation and product development in creating value for customers. While creating something entirely new is not necessary, focusing on continuous improvement and offering a better solution or price point can give your brand an edge. By building a strong brand that resonates with your target audience, you can establish trust, loyalty, and recognition, making it easier to sustain profitability and scale your business.

Conclusion

Finding winning e-commerce products requires a strategic approach and careful evaluation. The drop ship test method, coupled with calculating costs and profitability, provides valuable insights into product viability. However, it is essential to acknowledge the limitations of relying solely on this method and instead consider problem-solving and differentiation to build a successful brand. By continuously improving and offering unique products that solve real-world problems, you can maximize profitability and secure long-term success in the e-commerce industry.

Highlights

• Finding winning e-commerce products is crucial for successful digital marketing.
• The drop ship test method allows for cost-effective evaluation of product viability.
• Calculating costs and profitability is essential for making informed business decisions.
• Building a strong brand and offering unique products are key to long-term success.
• Problem-solving and differentiation can help overcome market saturation and rising ad costs.