How to Select Products to Sell on Your Website.
What is the 'Ideal' Internet Product?

by Dr. Ralph F. Wilson
Web Commerce Today, Issue 7, February 15, 1998

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Just this morning I received a call from London with a common inquiry: "I want to make money on the Internet. What do you think are the best kinds of products to sell? Are there any guaranteed 'best sellers'?" Let's look at the factors you should consider when selecting products to sell in your online store.

Sell a product you like

Since you're going to be investing a good portion of your energy and creativity in this enterprise, you need to start with something you enjoy. I have a friend who was all thumbs when it came to fixing things. He hated it. When his car needed even the most minor maintenance he'd take it to a garage. But what kind of job did he get? Manager of hardware and automotive supplies in a do-in-yourself store. For him it was merely a job to tolerate, not something he could do with any natural enthusiasm.

If you are choosing products to sell, why not choose something you love, something you feel for? What are your hobbies? What do know about? What do you enjoy with all your heart? If you can select products related to your passion, you'll both be happier and more successful financially. Since you love this field, you'll put everything you have into making your store the very finest -- and your sales will reflect it. There's nothing sadder than to talk to a person who hates what they do. Life is too short.

Shouldering Your Way into the Market

A second factor is potential rivals. You'll be hard pressed to find a field on the Internet where there aren't several stores already selling the sorts of products you are considering. Study your competition. What are their strengths? What are their weaknesses? What have they left undone? Unless you've got lots of money to burn, your best chance is to discover an unmet need that you can meet better, less expensively, more enjoyably. Find your niche, and then plan to make your store the very best at what you do. Where will you add value? Price, ambience, information, customer service, product presentation, exclusive product lines, breadth of product selection in a narrow field? You'll choose one or two of these to make you unique.

You are not going to excel at selling everything. Focus on your strengths and then be the best. Last year mighty Sears ventured onto the Internet. Did they put their whole department store online as did Wal-Mart? No, they concentrated on their most unique and strongest line -- Craftsman tools.

What's selling on the Internet?

If you were to ask a year ago what was selling on the Internet you'd come up with a short list closely related to the Web's strongest characteristics:

• Computers and software. After all, by definition surfers are computer users, and a year ago it was early adopters who made up the bulk of the online population. Dell has been selling $3 million a month on the Web.
• Books. Amazon had come on the scene with a dynamite marketing plan -- an associate sales commission program which encouraged thousands of small sites to link to them -- and a 10% discount (which has since increased to 20% to 30% to match the competition). A year ago, the average surfer was significantly better educated than the general population.
• Pornography. Privacy, basic human drives, and low overhead propelled this sleazy, exploitative business.
• Specialty items not easily available elsewhere. Virtual Vineyards offered wines from small, Northern California wineries and Hot Hot Hot offered exotic hot sauce.

Today the demographics have shifted towards the general populace, and we've seen nearly every product imaginable sold on the Web. I am convinced that nearly any product that can be profitably sold through a print catalog will do well on the Web. Online sales are really a subset of the mail-order industry, and most of the rules developed in that field apply to Internet products.

What should you look for in a product?

Of course, you'll want to make sure your products are absolutely safe and legal. (Shipping wine into certain dry counties in the US, for example, can get you in trouble.) Here are important factors for product selection. While a product need not meet every selection criterion, the more of these characteristics your products have, the better they are likely to do.

• Adequate mark-up. Direct mail marketers look for products they can mark up 3:1 or 4:1 in order to cover their high up-front advertising costs. Catalog marketers' prices are closer to retail, which usually seeks a 2:1 mark-up. Since catalogs offer many products rather than just one or two, the chances are that the average total sales amount will be higher, and advertising costs are spread over many products. The cost of sales over the Internet is significantly lower than either physical retail stores or telephone sales, so as competition heats up I expect to see prices on the Web begin to pass on some of those savings to the customer and still make a reasonable profit.
• Lightweight and easy to mail or ship. At a home and garden sale last summer I stopped at a wood patio furniture display to sit and wait for my wife. "Do you ever ship products outside of Northern California?" I asked, hoping to find a website prospect.

  "One customer had us ship some of our furniture to Virginia," said the proprietor, "but it cost as much to ship as the price of the furniture."

  Bulky, heavy items won't be as popular. But if you consider the beds and refrigerators and dishwashers Sears sold through their catalog to rural America for years, you know that if people cannot obtain a desired product locally, they are willing to pay high shipping costs to secure it. The Internet has suddenly made small businesses into global businesses. Don't be surprised to find international shoppers quite willing to pay high shipping costs to obtain items they can't purchase in their area.

• Broad appeal to your target audience. Computers do well on the Internet because all the shoppers needed computer-related products. The broader the appeal, the better you'll do. What are people looking for? Happiness, love, wealth ... Meet these basic needs and you have a larger consumer base. This, of course, must be tempered by the next characteristic.
• Not readily available in retail stores. Everybody needs soap, but you probably won't sell much over the Internet, since people purchase soap where they shop for groceries every week. But if you offer a wonder-cleanser "not sold in stores," then you have a better candidate for an Internet product.
• Unusual features which can be emphasized. Many minimum wage store clerks don't know much about the products in their store. They stock, and work at checkout, but can't explain how a product will benefit you. Since on a website, space is not at a premium, you'll be able to sell products that take some explanation to describe unusual features. Products that photograph well or can be displayed through drawings or schematics can be sold on the Web. You've seen entire direct mailings devoted to extolling the virtues of a carbon steel knife set. Just imagine what you can do on the Web!
• Can be installed by a novice. The words "some assembly required" can strike terror into the heart of a purchaser. Products that don't require professional installation will do better; those requiring complex installation are better sold through dealership networks.
• Convenient to purchase on the Web. One of the chief reasons people shop on the Web is the same reason that many chose mail-order catalogs: convenience. If you can make your products more convenient to purchase via the Internet, you'll gain customers -- and hopefully, repeat customers. Some products that require complex definition and customization, tailored suits, for example, may not be good Internet prospects.
• A broad selection. If you offer only a scattering of unrelated products you'll have a more difficult time getting repeat customers than if you offer a broad selection of products in a narrow field. There needs to be a unifying theme other than "great buys I can offer." If I wanted to purchase hand tools (broad selection in a narrow field), I'd go to the Craftsman site. If I were looking for the tartan of my highland clan, I'd look for a site that featured tartans as well as books and tapes about the lore and history of Scotland (broad selection in a narrow field).
• A reliable supplier. What if your supplier goes out of business? Could you find alternate sources for the products you sell? Hand-made or farm-grown items are unique, but could be subject to local shortages.
• Exclusive rights to key products. As your online store becomes more successful, you'll find copycat competitors nipping at your heels. Can you find some core products for which you can secure exclusive rights? If so, this will contribute to your competitive advantage.
• The "story" and the "dream." Last but not least is that ephemeral "dream" element. Does the product lend itself to part of a larger story, the stuff legends are made of? This winter I read in the Lands' End catalog about sweaters. "New English Breed Sweaters," read the headline, "named after the very sheep that give them their beautiful, all-natural tones." The text continued, "Perhaps it was our merchant's stroll through Great Britain's beautiful, hilly countryside that inspired him to create these one-of-a-kind sweaters..." Though I've never been in England's green pastures except via television, I'm starting to see it and feel its briskness on my cheeks. The writer has me thinking about the sheep and the fresh, moist smell of the meadows. This isn't like purchasing a polyester sweater on sale at a department store, this is purchasing a little bit of a dream, a place, a naturalness, which transports me back to the simple life.

  The story you associate with your products will help sell them. So select products that have a tale, and then be that clerk in the fishing shop who tells of the golden brown trout sizzling over the fire which he caught with the very lure he is showing you.

What are the best products to sell over the Internet? Select your choices from hundreds of thousands of possibilities, and around them build the best store of its kind on the Internet.

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