The Ecommerce Cookbook: Part 1, Picking Your Produce (17)
The Ecommerce Cookbook: Picking Your Produce
In the first stage of the STM eCommerce Cookbook, we won't be doing any eCommerce.
Sounds crazy? It's not.
To Be A Great Chef, You Need A Great Grocer
The key difference between affiliate marketing and eCommerce is this: in affiliate marketing, the product has already been tested.
The primary reason why most "real" businesses fail is known in startup terms as "product-market fit". In simpler terms, that means this:
Most businesses fail because no-one wants their stuff.
As affiliate marketers, we're mostly insulated from that risk. It's one of the reasons why AM is such an effective model. By the time a product or service has an affiliate campaign set up for it, it's usually been at least somewhat tested and proven to work. That de-risks running campaigns for it to a huge extent.
In eCommerce, there's no such guarantee. Just because a product exists on AliExpress doesn't mean anyone actually wants to buy it. And even if people exist who want to buy the product, that doesn't mean you'll be able to effectively target them.
So if you like money, the first step in any eCommerce project is absolutely not to start an eCommerce store.
It's to generate a whole bunch of ideas for potential eCommerce stores, then find the idea out of all of those that's most likely to succeed.
Step 1: Write Your Shopping List
Start off by sitting down at your computer and making a list of every area of "stuff" that you know something about. By "stuff" here I mean anything that you could theme a store around:
- Your hobbies and interests.
- Past hobbies - even back to childhood if those hobbies would be of interest to people with credit cards. For example, as a kid I used to like fishing. That'd go on my list.
- Family's hobbies and interests. If your mum's very interested in classic cars you probably know more about that than you'd think. If your son is into American Football you almost certainly know a lot more about that than you'd expect!
- Past job fields. Ignore anything that's business-to-business only, but anything that dealt with selling to the public is fair game.
- Any field of interest you happen to randomly know something about. Read a book about obsessive DIYers recently? Stick DIY down there! Interested in motorbike racing but not to the point it's an actual hobby, just something you think about occasionally? Stick it down.
You absolutely do not need to be currently passionate about any of these things. In fact, it can be a problem if you are passionate about the field you start your store in - it's almost better to start a store selling stuff you don't care about.
Now take a moment to think about your current problems. Anything from whacking great issues to tiny niggles. Think about problems your friends or family have had too.
Any problem that could potentially be solved by a physical product? Write it down.
- Car won't start in the morning? Sounds like it needs a spare... something. (I'm not a car person.) Write down "car parts".
- Lamp flickering in your bathroom? "New lightbulbs".
- Just bought a new house and you and your wife are arguing about decoration? "House decorations".
- Elderly relative suffers from sciatica? "Sciatica relief". (You might think you can't find items for this on Ali Express - but you'd be surprised.)
OK, you should have a mahoosive list at this point. But let's throw in a few more things.
Google "List of hobbies". I'm not going to recommend a specific list, because I don't want everyone to work off the same songbook - there are loads of them out there. Pick a nice long, detailed list, and pick a few hobbies from that list which jump out at you as potential store ideas. Don't overthink this: you'll narrow down later.
You can also go exploring Groups on Facebook or Google+, or look through Subreddits on Reddit to get other ideas.
You should now have a list of 30+ ideas. Time to narrow them down.
Step 2: Squeezing Your Produce
Start a new spreadsheet called "Shop Ideas"
Head off to AliExpress.
For each of the interests on your list, spend some time - 10 min or so - exploring the available options for things to sell to them.
There are a couple of things to be aware of here:
- Don't sell things that people eat. It's just not worth the potential legal liability.
- Don't sell things that are too heavy, as the shipping will be a nightmare.
- Don't sell things that are priced over $75 or so on AliExpress, unless you have a very big budget to test with.
- Don't sell stuff that's obviously associated with a big non-Chinese brand. There are lots of knockoffs on AliExpress and they're apt to lead to unhappy customers. Stick to unbranded stuff for the most part.
If you can find at least 10 things you could potentially sell to people with that interest or problem, and that don't fall foul of one of the problems mentioned above, add the interest to your spreadsheet.
Next, go looking for places where people with that interest or problem gather.
Look for Facebook groups about the interest or problem, and note the name of the group and their size. Use the Facebook Audience Insights tool too to find groups you might otherwise miss. Look for subreddits, and do the same. Google for magazines and independent forums. Make a note of everything you find.
If you're seeing groups that are huge - 1 million or more - you've probably defined your interest too broadly. Think about how you can niche down. For example, the interest "food" is waaaaaay too large. But you could target people who like "BBQ", or "Brazilian food", or "Spicy Foods". If you hit this problem, come up with a bunch of niched interests, add them to your list, then remove the original massive interest group from your spreadsheet.
Whilst you're doing that, look for "welcome" or "introduction" threads on those groups or forums. If you find them, make a note of what people say about themselves - specifically age and occupation. Also, make a note of any threads that imply that people on those groups either do have money they're willing to spend ("In the market for a new amp, max budget $5000 - what do you recommend?") or don't have money/aren't willing to spend it ("This coaching site costs $5 a month - sounds like a ripoff!").
Now, based on that information and what you already know about the niche, add the following information to your spreadsheet: whether this problem/hobby attracts people with money, and whether the problem/hobby is one where people usually spend money regularly.
For example, golf enthusiasts generally have money, and spend it regularly - they need a subscription to a golfing club, for starters, and they'll often pay for things like coaching, which are recurring costs. People who play free online video games, by contrast, often don't have money - they're usually young people, students or unemployed, and often in poorer parts of the world - and don't regularly spend money. They may buy cosmetic items from time to time, but there's no regular investment required there.
Finally, note if you found a lot of threads specifically discussing products to buy. You should also check http://www.watchcount.com/ and http://nicheminer.co/ to see if there's a lot of interest in products for this problem or interest. Note your results down, including specific counts for Likes or bids on items.
Step 3: Pick The Freshest Goods
This process should have taken you a good few hours, probably a couple of days. If it didn't, you probably didn't write down enough ideas, or didn't research thoroughly enough.
Now we'll make the final decision.
Look over your list, and pick out the three or four hobbies or problem areas for it that most closely match the following:
- Plenty of appropriate products on AliExpress to sell them. The more the better. A mixture of cheaper and more expensive items is ideal.
- Lots of medium to large communities for the hobby or interest. Actual print publications for the hobby or interest are a particularly good sign.
- Communities aren't TOO large. See above - if it's over 1 million strong, it's probably too broad.
- People with this problem or interest have money. They say they have money, they're older (35-55 is probably the sweet spot), or they are in reasonably well-paid professions.
- People with this problem or interest spend money regularly.
- People with this problem or interest are actively interested in discussing products to purchase or looking for products for their problem or interest. You should be seeing threads on forums or groups talking about and discussing new products. High counts of Likes on products or bids on products also show interest here.
- The problem or interest isn't seasonal. It's not great having a store that's inactive 10 months out of 12!
- The problem or interest is worldwide, or at least present in more than a few countries. Note that you shouldn't assume on this, but do research: for example, American Football is surprisingly at least somewhat popular in a lot of countries outside the US.
- The problem or interest isn't likely to go away in a few years. Currently lots of people are interested in the UK's General Election, for example, but even assuming you could find products around that interest, it's not a good one to build a store around as it'll go away in a month!
- Ideally - use this as a tie-breaker - people with this problem or interest shouldn't be too tech-savvy. This mostly matters at the extreme end: people who build their own quadcopters aren't an ideal audience, as they're far more likely to be comfortable with ordering from AliExpress directly!
Got three or four options written down? Great stuff!
You're now ready to not only start a store, but ready to start a store with the best chance of success.
On to Part 2: opening your shop - go there now!
Thanks for this tutorial, great information here. Combined with other tips available on the forum, we have a solid foundation to build an e-commerce on!
I have one question though. Wouldn't it be a good idea to test the products we've picked before spending too much time on building the store? Of course it's important to look trustworthy and to have a nice looking store but this can be done without spending hours. Once the products have been market-approved then it would be time to take care of the store's details, right?
@jelz03 - It's important to do a thorough job but you're right: get to market as fast as possible whilst doing that.
Part 2 lays out a minimum viable store for exactly that reason. I'll go into more detail on additional things you can do to boost conversion rates later, but for now the aim is to get to testing as fast as possible whilst maximising your chances of success.
Part 2 might look quite long, but I actually built out a store whilst I was writing it, and it took about an hour and a half. If you spent a bit more time on the copy than I did (advised), it'd be more like 3 hours - that's fine.
I do not recommend skipping the research in this Part 1, though. This research massively increases the chances that your store and your products will be successful - you're most likely saving yourself a few thousand dollars' spend, minimum, by doing this work.
Caurmen,
I appreciate the guide - great stuff!
I'm right on the fence between going ecom vs. AM. I am experimenting with an ecom store in the Fidget Spinner space right now, and looking to move on to a more healthy niche that is people-focused instead of product-focused.
So, I think I might have a good niche and am looking for your thoughts! I am going to conceal the niche below, but am happy to share via PM. I am already focusing on a niche-within-a-niche. The real question I'm trying to answer is whether or not that's still too broad, and if I should go one layer further down: niche-within-a-niche-within-a-niche.
It's like nicheception in here!
(yeah, that was lame 
)
The niche meets basic criteria:
- The group is passionate about this particular niche
- Tons of items to sell on AliExpress
- Folks have money and shell it out in this niche
- Niche is not seasonal
- Niche is prevalent in a handful of english-speaking countries
- Niche won't go away within a few years
Now, take a look at the qualities of both Niches here and tell me if you think I need to niche down to the furthest layer:
Niche-Niche: FB Groups with +1M active users, web sites, forums, lots of publications, very passionate people
Niche-Niche-Niche: FB Audience of 350k - 400k, Groups of only 5k - 10k, 10k users on subreddit, 10k on forum, very passionate people
I feel like the Niche-Niche is too broad, but the Niche-Niche-Niche might be too narrow.
Thoughts?
Thanks!
I'd go niche-niche-niche. If you get it profitable but it's not enough volume on its own, you can always expand sideways or upward.
That size of subreddit is great, in particular - you're likely to be able to become known in the community, which is a huge boost, and it's much likelier to be friendly and possible to get organic traffic reasonably easily.
Originally Posted by caurmen
No particular reason to do that: you're better to target actively at the niche you're in now. You can always rebrand / launch another store / whatever later.
"Great news, everyone! Bob's Incontinent Cat Supplies is going so well that we're actually launching a new store for ALL KINDS OF KITTIES! Check it out at Bob's Store For All Kinds Of Cats!"
There's a programming approach which makes a lot of sense in this sort of situation called YAGNI - You Aren't Gonna Need It. Basically, don't overengineer at the start to make sure that you have the room to expand in the direction you think you'll be going. Until you actually get going with the initial product, you have no idea which direction you'll end up going.
You might initially be selling supplies for owners of incontinent cats, thinking that you'll move into a general cat store in the future, but a month in you realise that the "incontinent pets" niche is waaaay larger than you realised, and now all that work on making sure you can go general-cat-store is wasted because you're opening Bob's Incontinent Gerbil Store, Bob's Incontinent Lizard Store, etc...
Hi Caurmen,
nice one, looking forward to part 3.
I have a question regarding similar products. I know you advise against branded products that are copies. But what about products that are basically copies / compatible products that don't pretend to be the exact same brand and have their own brand/product names? I.e. knock off type toys for example that look very similar but are basically unbranded copies
Tricky legal area, that one - you'd really need to know if they infringe design rights.
I'd say either "avoid" or "consult a intellectual property lawyer" - the latter will probably not be as expensive as you might fear, and will be able to give you an accurate answer appropriate for your jurisdiction.
Great guide, thanks Caurmen. When choosing a product, do you consider eBay as a competitor? For example, one product I looked at sold for $10 on AliExpress, $11 on eBay and an inferior looking version sold for $35+ on local retail websites.
Should I aim for a product not sold on eBay (severely limits choice) or simply ignore it and work on the assumption people will buy because they saw my ad?
I'd not ignore eBay totally - good demand signals - but I wouldn't get too spooked by the prices on there, particularly not auction prices. Look at other retail stores, Amazon, etc to get a benchmark there.
Following! 
Yo caurmen... I'm following your guide thoroughly but I can't seem to get past this roadblock
I've found my sub-sub-niche and found my products (I'm running in the cooking niche and my product I've saw very popular being ran is the pancake flipper)
I've tallied my adcopy to my sub niche, and also my targeting
My question is... then how do I find out which geo will be the best to run?
I've ran $5/day ATC for 2 days... with 0 ATC and 0 sales in geos like US, UK, CA, AU
Many people say don't run in T1 geos, but the problem is there's so many geo's that I do not know which one to start with.... with the highest chance of success
This is not as straightforward as affiliate marketing where you have a top offer list and you can just test them 1 by 1
Do you have any recommendation on any reverse engineering for choosing the right product vs the right geo (preferably lesser competition geo, lower volume, but lower competition) that will have the highest chance of seeing some hope that the product can be sold?
@pavel_apostolov87 - The first thing I'd do to narrow the geo in your case is to figure out where pancakes are really popular 
That'd immediately lean me to the US and CA.
Then run the product for a multiple of the profit you'll get, as mentioned in the guide.
If it's not converting after that, chances are people just don't want the product, or you've not explained well enough why it's good.
Are people clicking through the ad in decent quantities? What's your CPC in this case? That's the first hurdle.
But overall, ecomm is a lot like affiliate marketing, in that the offer/product is all. If the product's not selling, chances are it's because people don't want it enough to buy it Test a new product, and keep doing that until you find one that makes you lots of money.
Originally Posted by caurmen
That'd immediately lean me to the US and CA. Then run the product for a multiple of the profit you'll get, as mentioned in the guide.
If it's not converting after that, chances are people just don't want the product, or you've not explained well enough why it's good.
Are people clicking through the ad in decent quantities? What's your CPC in this case? That's the first hurdle.
But overall, ecomm is a lot like affiliate marketing, in that the offer/product is all. If the product's not selling, chances are it's because people don't want it enough to buy it
Test a new product, and keep doing that until you find one that makes you lots of money.What are your thoughts of running on other geos like in EU with lesser competition? (If there still is a demand/interest for cooking/baking/pancakes)
Definitely worth trying other geos, particularly non-English speaking ones. If you happen to speak a non-English language, it's particularly worth trying targeting a country using that language.
In general, if something has been a hit in an English-speaking geo recently, it's always worth trying in a major non-English-speaking geo, unless there's a very good, obvious reason it won't work. (And it might be worth a go even then!)
$0.80 CPC is definitely going to make it hard to profit from your campaign unless you've got a crazy-good profit margin, too. But with no ATC at all my first guess would be that the product's just not appealing that much.
Great guide, Caurmen! Much appreciated!
I was just wondering how I can test if this product is the right product without spending too much time of the store design, copy writing, etc?
What if the product was good but didn't convert because there was some room for improvement somewhere?!
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