Hello everyone and welcome to Passive Income 101 – Session #13. Today I want to talk about how to choose a product to sell.
If you are thinking about selling a product to make some temporary cash or even buying a business as a Forever Cash investment, you should think carefully about what kind of product that business will offer. Not all products are created equal, and there are a few questions you should ask yourself before getting too involved.
Here are some tips from shopify.com:
Accessory-Heavy Niches: Merchants rarely make much on big-ticket items and will only earn maybe 5 to 10% on products like laptops and TVs. Where they really make their money is on the accessories.
Accessories enjoy markups of 100 to 1,000%, and customers are much less price-sensitive about them. A buyer might shop for weeks to get the best deal on a TV, but wouldn’t think twice about dropping $30 on an HDMI cable from the same place. Yet there’s a good chance the business made nearly as much profit on the cable as it did on the flat screen.
Consumable or Disposable Products: Repeat customers are essential to any business, and it’s MUCH easier to sell to existing customers who trust you than to new prospects. If your product needs to be re-ordered on a regular basis – and you’re able to keep your customers happy – you’ll be on your way to building a profitable business with recurring revenue.
Is There Enough Demand For Your Product?
The best way to measure online demand is with Google’s Keyword Tool, which provides data on how many people are searching for a specific term.
If you follow these tips (and the rest of the ones listed in the article) you will be well on your way towards selling a valuable product that will keep the cash flowing in for a long time.