How To Evaluate Product Viability: Comprehensive Guide

How To Evaluate Product Viability

Posted 9 years ago by Lina Vashurina, 黑料门 Team

Before launching any听product-based business, you need to听do听your homework.

That means making sure your product is听actually viable听鈥� and听worth your investment. Without this process, you could wrap up听a听lot of听time, money, and听stress into a听project that ultimately fails. And that鈥檚 bad news all around.

If听you鈥檙e serious about launching a听business, don鈥檛 skip over the听evaluation stage, and听be听sure to听thoroughly evaluate product viability.

Step One: Do听Your Market Research

If听you were creating a听full business plan, part of听that process would include conducting market research. Market research helps you get a听better grasp of听product viability because it听forces you to听look at听existing competition, current buying trends for听your proposed product, and听much more.

Let鈥檚 look at听each of听these elements individually and听break down why they鈥檙e so听important.

Market Information

Within this portion of听market research, you鈥檒l look at听supply and听demand for听the听market听you want to听enter, buying trends, and听average prices for听your type of听product. This will help you get a听big-picture view of听what to听expect when entering this marketplace.

An听easy way to听begin looking at听market information is听to听use 听tool to听gauge the听average monthly search traffic for听keywords related to听your product. In听the听example below, you can see what type of听results you鈥檇 get if听you were researching the听vintage jewelry market.

As听you can see from the听results here, there is听a听high volume of听search traffic for听vintage jewelry, so听it鈥檚 clear that there is听an听online demand for听these types of听products. This also means that competition is听high, so听you鈥檒l need a听unique angle that makes you stand out from the听crowd, and听an听aggressive PPC/SEM strategy听if you decide to听market your products this way.

Market Trends

Next, you can use another Google tool, , to听look at听interest in听your product over time. You want to听be听sure you鈥檙e entering a听market that鈥檚 either stable or听growing, because this means that you have a听greater chance to听succeed.

Markets decreasing in听popularity can be听dangerous to听enter, because as听demand and听interest decreases, it听becomes harder for听you to听sell your products. As听you can see from the听, 聯vintage jewelry聰 is听on听a听downhill slope, which may be听a听red flag.

Pricing

Now you鈥檒l want to听get a听feel for听the听average price point听for the听type of听product you want to听sell. Since 听has a听large market of听vintage jewelry products, a听simple search on听their platform generates a听nice mix of听products that help you better gauge at听which price point these types of听products are selling. We听narrowed the听search down to听be听more specific, focusing on听聯vintage rings聰 instead of听聯vintage jewelry.聰

Depending on听the听type of听vintage rings you鈥檙e going to听sell, you鈥檙e looking at听two different price points:

Low-end, trendy fashion jewelry: $10-30/piece
High-end, real stone jewelry: $150-500/piece

If听you鈥檝e already 听you鈥檒l sell your product at, compare how it听fits into these findings. Is听your number too high? Too low? Once you鈥檝e added in听your selling and听shipping fees and听factored in听the听price of听your time, are you still making a听worthwhile ?

The numbers discovered here help provide some basic parameters that will help you price effectively, should the听rest of听your research point to听a听viable product.

Step Two: Define Your Unique Angle

In听辞谤der to听be听competitive within your market, you need a听unique angle that separates you from all of听the听other existing retailers. This angle helps a听buyer decide why he听辞谤听she should buy from you instead of听someone else. This is听sometimes called the听, which stands for听Strengths, Weaknesses, Opportunities, and听Threats. In听each category, you鈥檒l identify these key elements for听your product idea.

Strengths: What are the听strongest aspects of听the听product/business that make it听stand out from the听competition?

Weaknesses: What are the听areas in听which your product will struggle to听compete with others?

Opportunities: What are the听established resources you have that create a听unique opportunity for听product success?

Threats: What are the听key threats that could limit your product鈥檚 ability to听sell or听succeed in听the听market?

Once you鈥檝e completed your SWOT analysis, you need to听further define how you鈥檒l separate yourself within the听market. If听you鈥檙e not offering a听product that鈥檚 completely unique and听can鈥檛 be听purchased elsewhere, think about elements that could set your store apart, such as:

An听existing audience you have, via an听established blog, YouTube following, etc. (These are prospective buyers that already know and听trust you).
An听interesting backstory to听your products, such as听how you create them from scratch.
Selling for听good: Part of听your proceeds benefit a听nonprofit that helps others.
Interesting packaging: Offering an听un-boxing experience that鈥檚 almost as听cool as听the听product itself.
Customization, allowing buyers to听personalize their purchases in听a听way no听one else is.

This stage will require more research on听your part, too. Do听extensive searching to听find out what your main competitors are already doing so听you鈥檙e not duplicating an听existing element. Take notes on听what you find. Not only will this help you better understand the听market overall, but it听will allow you to听get more ideas on听what you like and听dislike about your competitors鈥� approaches.

Finally, test your idea and听unique product angle out on听a听small focus group of听your target market听to get their initial feedback. This should be听a听group of听people you do听not听already know (bias happens, and听it鈥檚 bad news.) Sites like 听辞谤听can help you conduct these in听an听online context to听get honest feedback.

Step Three: Product Details

Now it鈥檚 time to听look at听the听details of听product to听see how realistic it听is听for听you to听sell. Especially for听eCommerce retailers without a听physical store, this can be听a听hugely important aspect of听product viability.

Think about it:听Everything in听your research so听far might be听leaning on听the听positive side, but if听your product is听difficult and听expensive to听ship, you might discover that the听idea is听completely unrealistic.

Here are a听few product details to听scrutinize in听the听face of听viability:

What is听the听average shipping cost? If听the听item is听large or听heavy, you may incur expensive shipping fees that actually cost more than the听item itself. If听you鈥檙e considering a听shipping service like 听辞谤 , you can use their onsite shipping calculators to听gauge what fees you鈥檒l incur.
Is听the听product difficult to听ship? If听you鈥檙e selling an听item that is听perishable or听requires intensive packaging to听ensure it听doesn鈥檛 break or听get damaged en听route to听the听customer, you鈥檒l need to听factor in听the听additional packing product expenses, shipping insurance, and听the听overall likelihood of听whether it听will make it听safely to听the听customer in听one piece.
Are there regulations related to听your product? Some items, like nail polish, chemicals, guns, and听food products face specific restrictions, both in听regard to听shipping and听for听international customs processing. Be听sure you鈥檝e verified you can safely and听legally sell and听deliver your products to听the听audience you鈥檙e targeting.
Is听there a听local provider? If听you鈥檙e considering marketing your product to听a听local audience, look at听how many competitors are already offering that same product, and听evaluate how realistic it听is听that your product will be听unique enough to听attract clients who already have these needs met by听an听established provider.

Evaluating Product Viability: Take Your Time

This step in听your business is听crucial, so听don鈥檛 rush the听process.

Do听extensive research to听be听sure you鈥檙e not setting yourself up听for听failure. If听you can complete the听three steps outlined here, you鈥檒l not only have a听better idea of听your likelihood for听success, but if听you do听move forward, you鈥檒l be听doing so听in听a听strategic, responsible way.

听

About The Author

Lina is a content creator at 黑料门. She writes to inspire and educate readers on all things commerce. She loves to travel and runs marathons.

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