How To Do Evaluation Of Market Viability For Your Products
After you have determined the viability of your product, you should become capable of answering these two questions
- Can my business do the production of profit with this product?
- Can I ultimately grow my business with this product?
You could do the conducting of formal research by making use of tools like market testing, prototype testing, concept testing, and focus groups for finding the answers to these questions. However, it can be complex, time-consuming, and expensive to make use of this approach.
We have compiled a list of things for you that you must consider when you are determining that if there is any commercial market available for your product.
Things You Should Consider While Doing The Analysis Of A Product Viability
When you are going to start, you are required to ask yourself some serious strategic questions about the viability of your product.
- Is the idea of your product viable?
- What challenges or obstacles lie ahead?
- Will it have a requirement of support services of some kind for ensuring the satisfaction of consumers?
After answering these questions, you are required to shift your focus to the more tactical aspects of your product and how these will affect your business model.
The weight and size of your product will have an effect on how much you are selling.
If the product you are taking into consideration is large, heavy, or awkwardly shaped, you might have the high cost of shipping. To do the addition in complexity, FedEx & UPS prices used to fluctuate, which could negatively impact your budget.
You should think that you could pass the cost of shipping on to your customers? Just think again.
If you can serve your customers with fast shipping that is also free, you significantly enhance your chances of winning their loyalty.
That being said that free shipping is doing the tightening profit margins all over the industries, which makes it harder for surviving in the competition and also facilitates a leading customer experience.
When you are having a smaller product, you can do the minimization in your shipping costs and you could also serve with satisfaction to the desires of your customers or easy and quick delivery.
Consider the fragility of the product
Fragile products are having the requirement of extra attention when shipping for ensuring that they arrive in perfect condition.
Typically, durable products used to cost less for shipping and for lightening your customer service and do the reparation of burden for the products that used to break en route to the customer.
Bonus? Generally, they also cost less to stores.
Fragility should also not completely discourage you from serving a certain product, but you should keep in your mind that when you are opting to sell fragile products it will enhance the cost for shipping, customer service, and inventory.
Most of the entrepreneurs used to forget that a single item can often be associated with numerous SKUs.
A stock-keeping unit, or SKU, typically refers to the size, color, and other variations of a single product.
The more SKUs you are having, the more time, money, and attention you will require for spending in maintenance and tracking of inventory.
Let's take a look at how a t-shirt used to break down SKUs for getting a good idea of the process.
You are not only required to stock a variety of sizes (small, medium, large), but also colors in each size (small and red, medium and red, etc.) and probably even male, female, and the sizes of children.
SKUs can swiftly do the addition by adding a level of complexity to how you will do the fulfillment, distribution, and management of the product.
You should not a large amount of SKUs to make you discouraged, but you should keep an eye out for the additional costs and reparations which are associated with the mix-ups of the products during the fulfillment.
Consider The Lifespan Of The Product
If you are having a disposable or consumable product, most often it is perceived as a great choice from the perspective of a business because you could do the improvement in the way that you earn the loyalty of your customers, and ultimately you can build your business off of repeat sales.
You can think of the grocery store model. Competition is fierce, inventory churn is high, but the price point and location do the generation of loyalty, which pulls the consumers on a weekly basis.
It is better to take into consideration the subscription box business model, in which your customer used to sign up for monthly payments and deliverables.
If it is possible then you can think of recurring, when you are considering the offerings of your product. Overall it can assist you in lowering the cost of your marketing and enhance your average customer lifetime value.
Now - let's talk about perishables.
There are numerous successful businesses out there that are indulged in selling products, like Jeni's Ice Cream, which used to serve up quality, frozen yogurt, handmade ice cream with unique flavors.
However, their road to get success didn't come without any challenges - like shipping, production, and storage.
They have done just that with Jeni's Ice Cream delivery box. In addition to that, they have made use of a content-first approach for doing the integration the logistics into the overall brand messaging.
When you are facilitating a perishable product to the market, you are required to set proper expectations for your customers regarding the cost and timeliness. If you are being transparent, you will completely retain the loyalty of your customers and be able in delivering a better customer experience.
Seasonability is meant by that there are diverse levels of demand for a product throughout the year.
Do you purchase sunscreen in winter?
How about the decorations for holidays in the summer?
Of course, there are numerous aspects which you should take into consideration, which include where your target customers are located if you are selling internationally. You should also note that your winter in turn could be summer there.
Seasonality is not accurate science. But, there are numerous ways for navigating the challenge which includes the running of shipping internationally and timely proportions.
Whether or not you see your goods as seasonal one, still seasonality used to affect revenue for all online stores. For instance, some of the most highly anticipated shopping holidays - like Black Friday, Cyber Monday, and Small Business Saturday - results in some of the highest sales of the year.
For ensuring you are facilitated to do the management of a seasonal product or to do the capitalization on holiday buzz. You will be required to determine the downtime of your business and work to offset expectations and costs during those periods.