How To Do Product Research
For Ecommerce (The Right Way)

The internet is littered with product research method after product research method; However, the vast majority of advice out there is completely incorrect.

Don’t get me wrong, the advice may work for some. But far more people are stuck with debt and unsellable inventory than you’re left to believe.

Truthfully, I’m not sure the people giving the bad advice are even aware of the damage they’re doing.

The problem is that most of them are just writing a blog post or a video in an effort to rank their website in search engines; They start off by reading other bad advice related to the keyword they’re targeting, then re-writing it in their own words.

So what bad advice am I referring to? Well, for starters, they all start out by searching for a product.

A business SHOULD NOT start with a product.

Seems counter-intuitive?

Well, not exactly.

Before you can find a product, you need to find a customer segment to cater to.

When deciding on a product first, and searching for a customer segment second, you’re risk of failure increases drastically.

Doing this typically leads to a product people don’t actually want, people not being willing to pay a retail price necessary to make profit, or spending far too much on marketing reaching the wrong customers.

By starting the process with a target customer in mind, you’re able to create products that are based on the actual customer motivation.

Not only will this make your job of finding customers whom you can sell your product to easier, but this will also help you validate your business idea more accurately which will prevent you from creating a product that you’re unsure will sell and potentially wasting lots of time and money.

Having an ideal customer before finding a product also ensures you’ll be able to expand your product line in the future and effectively grow a brand instead of topping out as a single product side business.

To find your ideal customer segment, you need to find a broad market, then identify a deeper level niche market, and then a sub-niche.

For example, if you’re looking at the shoe market, some possible niches would be running shoes, comfortable shoes, or sandals. The customer groups for those niches could be runners, nurses, or beachgoers, respectively.

Each of those customer groups has their own specific needs; Nurses are on their feet for 12+ hour per day so they need maximum comfort; Beachgoers need something that is easy to put on and take off, something that is waterproof and doesn’t have a lot of crevices for sand to get stuck in;

This is the exact reason why it’s so important to find a niche; Because if you try to create a product that caters to an entire market, then you’re destined to fail.

Imagine trying to create a shoe that was perfect for everyone in every scenario; It’s simply not possible.

If you try to sell a shoe to everyone, claiming that it is perfect for everyone in every scenario, then no one will trust your product and no one will purchase it.

But, if you created a running shoe that addressed the needs of runners, then you’re much more likely to be able to capture that customer group’s attention and convince some of them to buy your product.

Most niches are still quite large; large enough that you’ll likely want to find a sub-niche.

Sub-niches could be things like beginners vs. experts, Low priced economical items vs. high-priced premium items or runners with metatarsal pain.

The sub-niches are typically found by doing customer research within your chosen niche; We’ll cover this in more detail soon.

So how do you actually find niches? And how do you choose which one is best?

First, you need to choose a market.

Pick any broad market that you have an interest in or are passionate about.

Next, head to Google.

For example, let’s say I like the photography market and want to find a niche within it.

The customers in that market are photographers, but I need to break down that customer group into niches by classifying the differences between photographers.

So, I would go to Google and search for “Types of Photography”

This particular search brought up a list of photography types right up top, but whatever market you’re searching may not have that.

For instance, if you're looking at a broad market of weight loss, then you may want to look for something like “different types of ways to lose weight”, “different types of exercises for weight loss”, or “different types of diets for weight loss”.

Alternatively, you may want to look for the customer’s motivation behind losing weight.

Whenever possible, your best bet is to keep things customer-centric.

Meaning there may be multiple types of diets for weight loss, but realistically each of those diets are catering to different customers.

For example, the paleo diet may be targeting customers who want to live a healthier lifestyle that’s easier on their digestive system. The keto diet may be targeting a customer who wants to lose weight, but still wants to enjoy some unhealthy foods that are full of fats.

Figure out these questions, and you’ll have your list of niches.

If your google search does not provide a clear list as my photography search did, then you may need to review the search results on the first 1-2 pages to see the various types of customer segments within the broader market.

This could be shown in a few ways - There may be key words or phrases in the search results URLs, titles, or descriptions; Or you may need to click on each search result and review the web page.

In any case, the information is there, you just need to put in the work to decipher it.

As you find these characteristics that make up each niche, start to list them out in clear simple terms.

For the types of photography, I would list out something like this:

While I could continue listing these out, we’ve got enough here to continue showing you the next steps so let’s move on.

Next, you’re going to go over to Google Trends and start entering each item from the list you just created. For example, I’m going to start by entering “Portrait Photography”.

You’ll want to change the time frame to the past 5 years, so we can see real upward trends, not just recent upward trends caused by fads.

As you can see, over the last 5 years Portrait Photography is actually on the decline. Let’s check some of the others.

Landscape and Real Estate photography’s trends are staying pretty even, but still not the upward trend that we’re wanting.

Wedding and Sports photography are declining.

Wildlife photography is increasing. Not as much as I’d like, but out of all of them so far it’s the best.

Now if I spent enough time looking, maybe I could find a niche in the photography market that is actually trending upward, or if I divided up the wildlife photography niche into smaller niches maybe I could find one that was trending upward a bit better. However, based on the ones that we just looked through, none of them really trended upward enough to move forward with.

With that said, the upward trend doesn’t have to be incredibly drastic.

If I had expanded my photography market to include videography and had entered “YouTuber” into Google Trends, then I’d find one that is trending upward enough to be worth looking into.

While that doesn’t look like a drastic increase, it is a steady increase which is what’s important. That means that I could probably find a product in this niche that could have slow but steady growth in sales each year.

By this stage, you should have a niche or two in mind, so it’s time to start finding sub-niches and researching products.

Finding Sub-niches requires research of search results, products, customer reviews, and more.

Really, sub-niche research and customer research go hand in hand;

What I mean by this is, as you research sub-niches, you’ll be learning valuable things about your future customers, and vice-versa.

To start, I suggest heading back to google. Start by typing in the name of the niche you’ve chosen, but DO NOT hit search; You want to view the search suggestions that pop up, which will disappear if you were to hit search.

We’ll go with Running shoes for an example.

Now, you’ll see all the Google search suggestions start popping up.

You can see gender is a key differentiator. Not only is gender a sub-niche, but it also gives you some key demographic data about your customers.

Some other options are running shoes for flat feet, and running shoes for plantar fasciitis; So obviously various medical issues make up several sub-niches that may be good to focus on.

Next, go to Youtube and do the same thing.

So, we type in Running Shoes, and here are a bunch more search suggestions. Some of them the same as Google, some are new.

For instance, this one that shoes “Running Shoes for Heavy Male Runners”.

Not only does that give you the gender, which is a sub-niche on its own, but it goes further into body type.

The needs of a Heavy Set Male runner are going to differ from that of a skinny male runner.

For example, the heavy male probably needs a wider shoe with more support.

You can see how quickly this list of sub-niches can grow. After you have a good-sized list of options, it’s time to start making some choices, or at least putting the list in order of which sub-niches you’re most likely to move forward with.

The reason we want to cover customer research before starting to search for a product is that as you’re researching products you’re going to learn a lot of details about the customers within that sub-niche.

As you go through customer reviews during the product research phase, you'll find that when customers give feedback about their purchases online, they also give a lot of important information about themselves and the way they use their products.

You’ll want to record all of those details because they’ll become very important for your future marketing efforts.

This is a great opportunity to learn about the customer's needs and wants, which in turn will help you sell them on your product.

For example:

If your niche involves products for children, and the parent's review mentions that their children are constantly playing outside and returning with chalk stains all over themselves, then it might be worthwhile to offer a product that features stain protection.

You may also want to note that they have children, and maybe even the children's age if they state it.

Maybe they mention "playing in the backyard", suggesting that they're homeowners.

All of this information can be helpful not only for developing a product that fits your customer's needs but also for targeting your ads to the right people.

When customers are targeted with details they can relate to, they feel more involved with the company and are more likely to buy from you again because of how connected they feel.

One important note - you want to look for common themes or details that are mentioned by multiple people. The more a detail is mentioned, the stronger the connection with your customers.

So how do you put this into practice?

Here are a few more examples:

Review:

"I work from home, so I'm usually in my pajamas all day." - Jane Doe

Use of information:

This example could be used to tailor your products to a customer base that works remotely.

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Review:

"We do a lot of cooking together. My wife and I are always making big meals for the whole family." - John Smith

Use of information:

This example shows that customers often cook large meals with their families, which could be an important detail if you were to find a product in the kitchen, cooking, or dinnerware niches.

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Since these details of your customers are so important to recognize, you need to know what kinds of information you want to be on the lookout for.

The broad categories of customer research information are demographics, psychographics (such as interests and behaviors), and price sensitivity.

Learn as much information about your customers from these categories as possible:

Basic Demographics:

Understanding the demographics, or statistical characteristics, of your target audience helps you better understand commonalities with this group.

These characteristics are things like gender, age, ethnicity, salary range, marital status, education level, or any other commonalities within the group.

Psychographics:

Unlike demographic data, psychographic research is more in-depth and involves examining lifestyle choices (such as activities and interests), beliefs, attitudes, and behaviors.

Once you understand those aspects of your target audience, you’ll be better suited to persuade them to purchase products.

Price Sensitivity:

In order to understand your target audience and what they want, it's important that you know not just how much they can spend, but how much they are willing to spend on a product that meets their needs.

Do your products cater to the desires of high-end luxury buyers or economical budget shoppers?

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In the next step, as you go through product reviews, I highly suggest recording all the customer research data in a spreadsheet, so that you can group similar responses or characteristics together.

Once grouped together into common themes, you can count the number of times each theme was referenced in reviews, and rank the themes in order of importance.

Now you'll know where to focus your efforts.

Hang onto that spreadsheet for later on, that information will come in very handy when it comes time to do product copywriting or any other marketing activity.

Now that you're really getting a feel for who your customer is, and what niche your business is serving, we can finally start digging into researching what products will sell well to them.

To start, let's set some guidelines on what makes a good product, to help you focus your search.

Product Search: Find Product Opportunities

To start, head over to Amazon.

Why Amazon, if you're selling on your own website?

Because Amazon is not only the biggest marketplace, it's also one of the largest product/shopping search engines in the world, and it's certainly the most organized.

Amazon also happens to have the most product reviews for each product listing, which is crucial for this process.

Normally on amazon, you'd search for keywords that are specific to a product or a group of products.

However, for researching a wide variety of products within your niche, you should try to avoid product-specific words.

For example, if my chosen niche was people who travel with their dogs, I should NOT search "dog travel accessories".

Instead, I should try to leave it as open-ended as possible and search for something like "dog travel". In some cases, the results may be the same but not always, so it's best to start broad and narrow down if needed.

If the list of product results are showing a wide range of product categories, that's great.

If every product is fairly similar then try to modify your search phrase. This may take some work but keep at it until you find a search phrase that gives you a lot of differing products.

On the sidebar, filter by price.

I'd enter $20 as the minimum, because depending on the product, you may find that you can successfully sell a $20 product at a $25 retail price.

From my "Dog Travel" search there are a lot of options, such as bags, beds, car seat protectors, bowls, and even jackets that are supposed to help the dogs have less anxiety during travel.

Start narrowing down by using the product selection guidelines we discussed earlier.

Need to narrow it down further?

You could remove products that you have no interest in or products that might be more difficult to manufacture.

Once you have 2-3 product types, you can move on.

Next, search Amazon with a more specific search including that type of product in the search phrase. Make sure to pay attention to the keyword placed into the titles of the 2-3 products that you chose.

For example, take a look at the 3 "Dog Travel" products that I've chosen. From these three, I would do 3 separate searches for "Portable Dog Paw Washer", "Hiking Pack For Dogs", "Travel Double Bowl for Dogs".

Next, start looking through the products in these searches, and look for things such as if they fit the product selection guidelines from above, as well as what review ratings they have.

If all the top 10+ products have 4.8-5 star reviews, it's going to be difficult to find common themes of what problems the customers have with the product.

If you can't find common complaints about the product, then it's hard to determine how the product should be modified for your USP.

While it's possible to still innovate these products, it will take a lot more work, and money, to validate that the product will actually sell before you spend the money to manufacture them.

If the top products have lower reviews, and the products seem to fit the product selection guidelines, then you're good to continue researching.

Product Search: Improve Solution

Now that you know what issue(s) customers are having with competing products, you know where to focus your efforts on improving your product.

These fixed problems become your product's USP and will play a big part in your future marketing efforts.

Once you have an idea of what the solution is to the problems with competing products, you will want to make sure you talk with a few potential customers to verify that your proposed solution fits their needs.

Make sure that the people you talk to are actually your target market, and fit within your niche. This may take some work to find people within your target market, but their opinions matter so it's worth the effort.

This solution verification is a crucial step to do BEFORE you start manufacturing so that you do not invest your money into a product with an incorrect solution to the problem.

After you've verified the solution with a couple of potential customers, and received good feedback, it's time to validate your product idea to alleviate risk and ensure that people are willing to pay you for the product.

Validating your product always begins with talking to your ideal customers to gather their feedback, as we talked about in the previous step; However, you should not stop there.

You need to go further and do some testing that will give you irrefutable evidence that people are willing to purchase your product.

Having people tell you that they will pay for your product is not the same as them actually purchasing it.

When it comes time to actually hand over their credit card, a lot of those people who said they would be your customers become nothing more than window shoppers.

If you're fine with risk and willing to lose all the money that you'll be investing into this product, then go ahead and skip this step to start manufacturing.

However, if you want to learn how to remove the risk involved in starting an online business, ensuring you only sell popular products, then let me teach you how to properly validate your product idea here.

I guarantee you won't find anything online as good as my method for validating product ideas to help you eliminate nearly all of the risk of starting your ecommerce business.