Tanner Larsson 0:07
Hey everybody, welcome back to the Optimized Ecommerce Podcast. I’m Tanner Larsson, your host, and today I’m going to be doing a solo episode. And it’s not going to be super long, but it’s gonna be about a very important topic that people are always asking about. I see, it’s one of the biggest things in terms of people on the e commerce game, starting an e commerce store, especially with beginners, okay, and that is, what does it take to create or sell a successful product, people are always like, I want to find winning products to sell, I want to, you know, sell trending products that are that can scale really fast or whatever like that. But the really part that they seem to miss is there’s a lot of pieces that go into a successful product, more than just picking a product or finding something on trends or on Alibaba, or drop shipping it or any, any way you find your product, there’s a lot that needs to go into it. So we’re going to dive right into that in this episode. And I’m going to actually pull up some slides to talk off of, and if you want to watch this on YouTube, you can totally follow along with the slides and see some of the imagery and stuff like that. Or if you’re on you know, just a regular old podcast, you can listen to it here, no problem and still be just as valuable for you. All right, so give me one sec to go ahead and pull up these slides. Okay, so really, guys, the the most important thing about products is actually that the product doesn’t matter. It’s the thing that everybody thinks is important when people are in like the jewelry business. They they’re like, yeah, I sell jewelry. The product is my jewelry, that product is what I do. So I’m in the jewelry business. But reality, no, you’re not your business is marketing. It just so happens that the product that you sell is jewelry, right. And it goes even further than that. And people get so fixated on the product. And when I teach, you know our members and beginners, in our e commerce business blueprint course, or our people in our ecom insider program, or I lecture at events, or wherever, I always start off by saying guys, the product doesn’t matter. And I mean that and I’ll explain what I mean as I as I keep going here, okay, so you can have the best product in the world. But if you don’t have a specific plan of attack, then it won’t matter how good the product is, okay, you can have great products. But if you don’t know how to sell, if you don’t have a marketing plan, if you’re not good at selling it, if you don’t have a good optimized store, then no matter how good your product is probably not going to sell. Okay, so here’s what actually makes a successful product. All right. Number one branding, okay, you need to have a brand for not only the product, but for the company and make sure that your product fits within that brand. This is where general stores don’t work, okay, because they don’t have a brand. They’re trying to be everything to everyone. Okay, you’re not Walmart, you can’t compete with Walmart. So don’t even try, you need to have a cohesive brand that speaks to your audience and also communicates the value in your product, what you stand for, and that there’s something that you’re a brand that they actually want to buy from. Okay, moving on from branding, the next piece you have to have in a successful product is strategic marketing, how the heck are you going to sell this product, there’s a lot more to it than just throwing up some ads and a store and hoping it all works, you have to have a completely proven plan of how that’s going to happen. From the time you run the Ad to the Ad copy the creative and all of that to the targeting that you’re going to use to what happens after they land on your site after the click when they land on your site through that entire buyers journey, both pre purchase and post purchase. Okay, there’s a whole plan that goes into attack on this or in action on this. Also multi channel advertising. You can’t just advertise on one place. Okay? We’ve all seen what happens when people bet too hard on Facebook, and all of a sudden their Ad account gets shut down and all of a sudden, guess what? They have no way to market. Okay, but the other thing is with multi channel advertising, it’s like legal stalking, right? So you may start with the person on Facebook, they see your ad they click on your product, all of a sudden, they’re over on eBay or Huffington Post or whatever and boom, they see an Ad. Because you’re using Google networks, you’re using other retargeting, third party retargeting networks, and things like that, in addition to your Facebook and your Instagram and your other advertising platforms, you need to have a multi channel approach so that you show up everywhere, and you can literally stalk your customers all over the internet showing them your product until they make a buying decision. The next thing is product positioning. How are you actually going to position your product in the marketplace and to stand out from other like minded and similar products? Okay, this is one of those things where it’s like most people compete when it comes to positioning. They just go on price. They’re like, well, they’re selling it for 995 all sell it for 899 boom, now I’m the cheaper product. Well, that can work except when you compete on price.

The only thing you get is a race. to the bottom, someone will always lower their price below yours. And pretty soon you’re not making any money because you’ve reduced your price so much that it’s not worthwhile. The next part of the game is it doesn’t benefit you to be the second lowest priced offer. If you can’t be the lowest priced offer, then you’re better off being a premium priced offer, however, does your product lend itself to being a premium priced product? Is that good quality product is it positioned in a way on a trusting store that has the branding and the look and the feel and the copy and all the pieces that go in the packaging and everything that goes along with it to allow you to position it in the right thing? Is it also positioned to fit the market that you’re advertising to? Okay, are is your product, you know, let’s say you’re selling something to the yoga market, is it if you’re selling something that is like a Bikram yoga product for hot yoga, and then you’re but you’re marketing it to a general audience, maybe that’s not really the right, the right positioning because your audience is not someone who’s specific into hot yoga. So you’d better off positioning that product to a more general audience or changing your targeting so that your positioning does work. And then finally, the most important one of all of these is mastering your metrics. Okay, I’m talking about all the metrics that come into the e commerce gamut from your advertising metrics, and your Facebook ad account, your Google Ad account, things like that all the way into your store and all the different metrics along the way, from how long they stay on the site to their scroll depth on the to the bounce rate to your page load times individual page load times for different pages in your store. And those are those aren’t even like your normal metrics. Those are just your your weirdo metrics, right that nobody tracks those only geeks like us track that kind of stuff. But then we start talking about your click through rate, right? People who land on your product page, what’s the rate of people clicking the Add to Cart button? How many people wind up in the cart? Wind up clicking Proceed to Checkout? These are your kind of your buyers journey funnel flow, you know, metrics. What is the conversion rate? What’s your average order value? What’s your repeat customer rate? What’s your lifetime customer value? All these different metrics play a different role in whether or not you’re going to have a successful product, okay. And then you factor in your advertising metrics, like your row ads your, you know, your cost per click your, you know, frequency and a bunch of other stuff like that all of those play a part of whether or not your product is successful. Now, notice how everything I just went through right there has nothing to do with the product. Okay, it has everything to do with the pieces that have to be in place in order to make a successful product. Okay, so let’s kind of keep going on this. There are six rules of product selection. So now that I just told you that the product doesn’t matter, I want to go through a little bit of how can you select products. Now, these are not hard and fast rules. Of course, these are my rules, but you can change them to fit your needs or whatever. But if you’re new to this, or you’re not really sure, or you’ve had, you know, bad luck picking products before, then this might be something you want to try to follow. Now these are the rules that I follow and that I teach our students to follow when it comes to picking products. Okay, so we’ve talked about why the product doesn’t matter. And now I’m actually going to talk to you about way when you do find a product, here’s some of the rules you want to follow to help you weed out products that really shouldn’t even be considered from the ones that you should consider. Okay, so number one, sell what is already selling. There is no need to go out and reinvent the wheel. Unless you’re going to be the next Uber, it’s not worth going out and reinventing the wheel. Find something that is already selling or if you have to find a market of people that are desperate for something that’s not being met but there’s a product for it that you can find that fits that need. Okay, but really don’t go reinvent the wheel, find what’s already selling and sell that or make a better mousetrap. Say Hey, everybody’s buying this earplugs or earpiece and I want to make a better one I’m going to change the color they’re either only people sell black ones or blue ones. I’m going to make a pink one, something like that. Right? So sell what’s already selling but make it a little bit more unique. don’t compete with name brand products, okay, big box stores. All right. This is where we always the example I always give is the electronics niche. Don’t try to sell Sony. Don’t try to sell you know, name brand Asus products or whatever because number one, you can’t compete with the big boys who already have the brand recognition where people are going to say I want to buy a Samsung TV I’m going to go to Best Buy or Amazon or something like that. Okay, they’re not going to come to Joe’s store Josie commerce store and buy that right. The other issue with that is that the name brand products probably have map pricing which is manufacturer’s advertised

pricing which basically specifies what you can the lowest price you could sell the product for. Everybody sells for the same price. They all have very low margins in the electronic space. There is about a 10 to 12% if that margin on most products, and then they do price competitions down to that map pricing where the wind up making very, very, very, very little profit. And they usually make their money on the accessories they sell with it. So name brand products are a very hard thing to compete with. And it’s really not worth it. Alright. The other piece is build a brand, not an income stream. Building an e commerce store is hard. There’s a lot of work with it, you know, it’s not necessarily complicated. But there’s a lot of work that has to go into it, and you’re going to put a lot of effort into it. So why would you want to do all that effort and put all that work and blood, sweat and tears and money into something that may only sell for a few weeks? Okay, that’s what I’m talking about by an income stream. There’s these trending products and gadgets and like little hacks and stuff. And you be like, oh, cool, I can make a quick buck doing that. But you’re going to put all that effort into it. Why not put all that effort into building a real brand, it’s just as much work to build an income stream as it is a brand. Okay? So why not build the brand, something that actually has staying potential and the ability to last? So when you’re looking at your product, look at it, Hey, is this something that I’m going to be able to sell five years from now? 10 years from now? Or is it something that I can only sell for a few months and then it’ll be over. Fidget spinners is a perfect example of that. I know people who are selling fidgets spinners because they were hot, and then they bought containers of them. And then the market of the fidget spinners dropped out from under it, because everybody was selling fidgets spinners. And now they were stuck with containers full of fidget spinners that they couldn’t even give away for free. Okay, so make sure it’s a product that has lasting power. The next thing is, is know your numbers before you start, this is something that nobody really does, okay. And by now, you’re going to be saying like, well, I’m starting down, I don’t know my numbers, I don’t have any numbers to know. Well, you can work backwards with some educated guesswork, starting with the product price and things like that. And then work your way backwards to kind of figure out what it’s going to cost you what you can afford to sell it for what it’s what you can need to what you can afford as a cost per acquisition on your advertising, different things like that. So you don’t want to just go into this blind, Workout, your numbers and your metrics as best you can beforehand and don’t do best case scenario, crap. Give yourself a medium case and a worst case, I like to build everything off of the worst case, because you never know what’s gonna happen, right? Things like that do happen. So work out your numbers, figure out what your costs are, what your potential profits are, what you think your acquisition costs are going to be based on what the market is doing, how many can you think you can realistically sell the size of your market? You know, how your unit cost is going to change as you start buying larger and larger quantities? Is it going to go down? Are your shipping costs going to increase? What if your first choice shipping offer like let’s say USPS is your first choice, but all of a sudden, they fail on you? What’s your second choice shipping offer going to be and can it sustain the allowable price point you’re going to have if you’re going to offer free shipping, if you’re not going to offer free shipping, what are you going to charge? And how is that going to fit into your price and your marketing strategy. So all of these things need to be considered. And the more you map this out, you can build a spreadsheet that literally allows you to plug in different numbers of traffic, and it spits out what your profit and or loss is going to be with all these different variables. And then you can keep changing them until you find something that works. And then if it works, you can back it out and say, Hey, is this even realistic? Or should I find a different product? Okay.

And the other thing number five, is don’t be afraid of competition. All right? There’s nothing wrong with competition. Competition only means that there are people out there in a niche that’s been proven to work in it, people like it, and they’re buying from it, right? competition is not a bad thing. It’s a good thing. All right? And the other piece of that is, is that you don’t actually go out and compete against them. Because even if there’s 10 competitors in your market, or more, each of those competitors is only accessing like a specific version or segment of that audience. No competitor can really reach the entire audience. So there’s always room for more competitors to come in there and start selling to that audience. Now will you have to steal some from some of your competitors, probably just like they’ll steal some from you. But overall, it’s not a big deal. And a lot of the time your competitors can actually become your allies, and JV partners in a lot of the stuff we do a lot of work with our competition. Most people are like, I don’t like my competition, because they’re selling to the same audience. We look at it as how can we collaborate with our competition and make things work that much better? Okay. And then the final rule is you need to plan on marketing, whatever product it is that you’re going to sell better. Don’t be like, Oh, I’m a crappy marketer. I don’t know how to market and I’m just going to hope it sells or I’m just going to compete on price and make my mine cheaper. You need to have a plan in place of I’m going to market my product better than the competition. Now, you may not start out that way right out of the gate, but that’s the way you need to be headed and that’s the plan you need to have. So the product and every product that you select needs to fall into these six rules and be okay if your product or your Selling, you’re like, ooh, I don’t know, if I can sell this and still meet these rules, then maybe you should look for a different product. Because when you go with these as your kind of rough guideline, it’s very beneficial. Now I know these are very broad and not actually product specific, I’m going to get into that in a second. But this is where I start when it comes to product selection. If I have a product that I’m interested in selling, and it doesn’t meet one of these six rules, or it makes me quiver or think like, second thoughts about it, I’m more than likely going to set that product aside or reevaluate it and go, Okay, why am I having second thoughts about it? And can I come up with a way to sell this product and make it still fit these six rules. All right. Now let’s get into some requirements for product selection. Alright, so now we’re going to talk more specifically about the product and some different rules and requirements that I need my products to meet in order for me to consider them something that I want to sell. Now this is not saying that just because they meet these selections the selection requirements that I will choose the product. But this helps me narrow it down from a bunch of ideas to a select few products that I want to actually consider and then do all the work of reverse mapping out my metrics, and all of those things. I don’t do all of that, until I’ve actually found products that meet these basic requirements. Because these are simple, yes, or no questions that allow me to weed through products very, very quickly. So let’s go ahead and dive into those. Number one, the product can be private labeled. All right. Again, we’re building a brand. So I don’t want to sell somebody else’s brand. I don’t want to sell the manufacturers brand, I want to be able to take that product, this earpiece or whatever and I want to be able to put my logo on it, put my packaging on it and sell it as if it’s my own. It’s the 10 or tastic earpiece instead of the Bose or beats earpiece, right. So I want to be able to private label it. This allows me to help my brand stay consistent allows me to charge whatever price that I want. Because once it’s private labeled, now it’s mine. Okay, if someone if I’m selling a beats earpiece, and someone else is selling a beats earpiece, well now they’re we’re selling a commodity that they can compare prices. But if I’m selling the 10 or tastic, earpiece, and someone else is selling the beats earpiece, they don’t they don’t compare apples to apples. So it’s harder to make the comparison so I can sell it for what I want. Okay, so private labeling is a very important part. I don’t sell anything that’s not private labeled, I know people do. Me personally, I’m not going to put the effort into something that I can’t make my own. Alright. Number two, it can be sourced in both small and large quantities. Okay? Well, this is important because at first, you’re going to start out small. Now when you private label, something you’re going to have to buy, this isn’t dropshipping This is real ecommerce. Okay, so you’re gonna have to buy inventory? Well, when you’re starting out, you want to be able to start with a small MOQ or minimum order quantity, right, and maybe only order 100 units or 1000 units, or whatever the small thing is, but as it sells, it starts selling good.

Hopefully, you’re going to start placing 10,000 20,000 30,000 100,000 unit orders. And you need to be able to do that. Now, a lot of the time, we’ll find products that we’re really excited about, but we go talk to the manufacturer, and we realize that they’re a small shop, they can only sit like, we can buy 50 or 100 at a time. But we say we figure out what their actual manufacturing capacity for a month is. And it may only be two or 3000 units. Now, depending on the price of the product, and how many units we think we can sell, that may not be a problem. But if it’s something that we believe we can scale into the 1000s of units a week or a day or whatever, then we need to make sure that manufacturer can handle that. And if they can’t, we need to find other manufacturers who can fill in the gap or go to a completely different manufacturer altogether. Also, the product needs to be in demand, okay, this goes back to you know, sell what’s already selling. If it’s a product that nobody’s ever heard of, or whatever or complicated or whatever, then you probably have to educate the market and start from scratch, which makes it tougher. If the products already in demand, it makes it much easier to get started selling it, even if it is branded your own way and something that people that’s known like people know, they like noise cancelling earpieces, okay, that’s it’s a product that’s already in demand. And it can be sold for at least $25. Now, this is my rule, okay, you can sell stuff for less. I know a lot of people who do, we’ve actually had brands of our own that have, you know, been at a $9 10 995 range. We choose to not sell products less than $25 because it’s number one a better class of customer number two, it allows us to have more profit built in there because let’s say you sell a product for $5 and you have a 50% margin. Okay, well that means your margin is $2.50. But if I have a $50 product with the same $50 Mark 50% margin, well now my margin is $25. So even if you have a great margin if your product price is too low, the gross profit margin is also going to be so small that there’s probably not enough left to pay your bills, okay, or pay your company bills. So we like to say that the product should cost at least $25. Because then you have enough room in there to have a decent profit margin per sale. Okay, the higher the product price can be the great, great, that’s awesome. Get it, get it up there, we love high priced products, as long as the market is willing to pay that price for that kind of product. And that also, not only are they willing to pay it, but does the market, you’re selling to have the disposable income to be able to afford it. That’s important as well. But again, if we can’t find a product that sells for at least $25 at the retail price point, we’re not interested in it, there’s plenty of other products out there that can. Number five is has high gross profit margins, I just talked about that. Right? The higher the margins, the better. Now, if you have a 50% margin or higher, that’s amazing. Okay, you know, a lot of companies don’t like the gross profit margins are important because gross profit is where it starts, guys, that you don’t keep your gross your expenses come out of your gross, right, you’re out your extra external expenses. Now, cost of goods. And then you have other expenses, right? Gross Profit is just your cost of goods subtracted by your sales price. So you still have a lot of other expenses to pay for out of your other profit, which is your operating profit margin. And then you have to expense all those other pieces before you get to your net profit. So the higher your gross profit margin, the more likelihood there’s going to be something left when it comes time to get your net profit. All right, so higher the gross profit, I like to shoot for a 60% gross profit margin. Okay, so that’s the gross and then it works down to where I have a decent net profit of around 15 to 20%. Okay, usually on the higher side of that. And the product needs to be a moderate to high quality, I don’t want to sell junk, you shouldn’t either. If you’re building a brand, and you expect your customers to come back and buy from you again and again, then the product needs to be of a decent quality and the quality needs to be commensurate with the price you’re going to be charging. If you’re selling a premium price at a price at a premium price point, but your product is moderate to low quality, there’s a disconnect, you’re going to have a lot of returns, you’re going to have a lot of unhappy customers, and it’s not going to work out so not worth selling junk, if it’s gonna break, I don’t want to sell it, I don’t want to deal with the customer service, right? Number seven is that it needs to be lightweight. The reason for that is shipping, the heavier something is the more expensive it is to ship. Okay, the bigger It is also it could be lightweight, but very bulky, that’s also expensive to ship. It also needs to be durable and not prone to breakage. Now thereasoning for that.

Also, you don’t want to you don’t want to have to break after you sell it to them. But you have to have the product shipped from the manufacturer to you or to your fulfillment warehouse. So there’s likelihood that can break in transit there, then again, it’ll be in a warehouse somewhere where it could break. And then it can also break on shipping from the warehouse to the customer. And then of course it could break when the customer gets it. So the ideal product is something that’s durable and is Yeah, it could break. But realistically, through normal handling, it should be durable enough that it doesn’t break and definitely durable enough that it doesn’t break and shipping. Okay, you’re always going to have some breakage when you buy manufacturer for the manufacturing they shipped to you and then also some breakage that happens on the way to the customer. But the smaller that number is the better. And then number nine is that it shouldn’t be bulky or large. Now, I have an asterisk on this one because some things that are bulky and large, are great sellers and you and if you can work out a good shipping arrangement with FedEx UPS or DHL post office probably isn’t gonna be the right choice for you. But if you can work out a good shipping arrangement for those and you sell in the volume, it may work out and be totally fine. But typically bulky, large items have awkward shipping. And also if you haven’t used the third party fulfillment warehouse, they take up a lot of space, and they tend to charge you a lot more money just to store the product because it takes up a lot larger footprint. Number 10 is consumable. This is again isn’t an asterisk, not everything works. Not every niche works this way. But if you have an option to have a consumable product, meaning one that gets used up after a period of time, go for it because if it’s consumable, that means that you lend yourself to an easy kind of auto ship or recurring income business where at when it’s consumable, if it’s every 30 days or every 60 days, whatever, you can get them on a recurring billing plan where you continually auto ship them new versions of the product after they use up the original product right so supplements like dog poop trash bags, those are consumables, you know, all kinds of things like that paper towels, obviously owners of paper towels, but anything like that, that gets used up. Normally that’s something in the supplement or ingestible space, but there’s a lot of other products that can lend themselves to being consumable as well. I know One of our clients in the welding niche sells a. It’s basically like a special kind of welding wire that I don’t know anything about welding, but especially kind of welding wire. That’s consumable. And so he makes a ton of money selling this very high end special welding wire. So there you go. There’s a lot different things that can be consumable. That’s a nice thing, if you can do it, do it. If not, that’s okay. This one’s kind of an optional one. A Next one is is there potential for you to sell other complimentary products? Okay, things like, if you’re selling a flashlight, can you sell batteries? If you sell a big flashlight? Can you sell a smaller flashlight? If you’re selling a cheeseburger? Can you sell french fries with that, right? Think about the upsell mentality. What other products can you sell with this product in a bundle or as a secondary opt offer or as an upsell that lend themselves nicely to this product? Okay, the more you know, complementary products, you can find that fit this product that you’re going to sell the better because again, we’re building a brand, we want to build a product line that goes along with this product, so that people who buy this product also want to buy your other products. And then when you do you launch a new product, you can be like, hey, because you bought this, you probably like this and make a lot more money that way. Now, when it comes to the overall goals of selecting products, you don’t need a ton of products, a lot of people think and they teach that you should test dozens of products, put a whole bunch of products on your store and see what sells and the thing is the problem with that is when you put a whole bunch of products on your store, that means you’re not paying attention really to any of them. Because you have so many you’re not taking the time to optimize each product, really get a good product listing, really get good product photos, or do any of the stuff that it takes to actually launch a good product. So less is more from this standpoint. All right, your goal is to find an I might and this is what our rule of thumb to kind of start off with is to find three total products, if you’re just starting out, you don’t need a whole bunch of products. So in our case, we’re looking for like two front end products that have high turnover in terms of products that have that new customers will be buying that you can sell a lot of. Okay, they can be at different price points or whatever. But ideally two of them that are going to be good front end products that you can attract customers with. And then at the very least one related product that has a high margin and higher price. We call this a profit Maximizer. So this is the product that you would offer as the upsell to the two front end products. product you may offer via email later on, you can put a bundle together of all three products or a

bundle of the front end product and the profit Maximizer together. But the idea there is the front end products may not have as high of a margin. And you can make up for it with the profit Maximizer. And you start off with these three products. Okay, this is enough to test it with three products, you can spend the time to get good photography, good copy, really dial in the offer, make make it match really, really just put the things together, create the right kind of bundles, and then develop the upsell funnels that you’re going to do that behind that to really make it work. You don’t need much more than that. Now, that’s not to say that when you finally narrowed down to these three products, that they’re all work, you may have a dud or two duds, or you may have three duds out of out of doing this. But by going through this whole process that I’ve just kind of shared with you, you’ll wind up with less duds and more qualified products that you can then test from. Okay, so the idea here is not to give you the you know, hey, this is the product to sell. But to help you narrow down and give you some kind of rules of thumb for finding the kinds of products that you want, finding the kind of products that can sell before you go through the effort of doing all the work that goes into setting up a product, getting it run, creating the ad creatives running ads only to find out crap, it doesn’t mean it doesn’t work. And then if you went back and looked at those criteria, you’ll find Yep. Now what if I use these criteria, I wouldn’t have even tried that product to begin with. So that’s something else you can do if you have existing products, and you’re just not sure about them. Take your existing products, even though you’re already selling them and run them through the criteria we just talked about here and see do the products you’re currently selling meet these criteria? And if not, should you be selling them? Are they not selling maybe that’s why or if they are selling maybe you continue selling them but you look at some of your other stuff that’s not selling and go Hey, I’m going to go back to the drawing board. I’m going to find some better products to sell. Okay, now guys, I know I covered a bunch here I’m gonna have a whole bunch more of product training videos and upcoming podcasts and things like that. But for now, I want to leave you with that if you enjoyed this and definitely leave a review or comment below this video or below on the podcast for iTunes or Stitcher or whatever, let me know you liked it. And then again, if you’re on audio right now if you’re like on iTunes or Stitcher or listening in your car, at the gym or whatever, and you want to use these rules, go over to the YouTube channel and you can get the video where you can see the actual PowerPoint slides and you can pull the questions off so you can create your own little checklist and spreadsheet and then obviously if you’re watching the video, you can do that already. With that guy’s great time talking to you. I will see you in the next episode. Have a great night, great day and see you later.