Every product starts with an idea, but good ideas are rare. There is a long road between a spark of inspiration and a profitable product. Investing in a product idea that goes nowhere is dangerous. Few retailers can afford to manufacture or buy products that sit on warehouse shelves for months. For every dud product, there is a product which might have sold well if only the retailer hadn’t wasted their time and money on an idea that didn’t work out.
Product evaluation tries to sort the winners from the duds early enough to avoid a wasted investment.
Is The Product Idea Feasible?
Ideas may fall at the first hurdle because there is a challenge that is too difficult or expensive to overcome. It’s better to find these challenges in the early stages of planning, rather than later when money has been spent.
For example, you are inspired to build an eCommerce business around direct-from-the-farm strawberry delivery. There may be a market for fresh strawberries, but there are also challenges. Sourcing strawberries from farms is a complex logistical operation. Strawberries spoil quickly, so short delivery timelines are essential. They should be stored in chilled warehouses and transported on chilled trucks, which is expensive. It’s not a bad idea, but it may involve a substantial capital investment that makes it impractical.
Regulations can be a challenge to the feasibility of an idea. In some parts of the world, fireworks are heavily regulated. To sell fireworks, you have to carry out identity checks on buyers, apply for licenses to buy and sell commercially, pay for expensive liability insurance, and use secure storage. Compliance may make it difficult to sell fireworks at a cost that is competitive compared to industry incumbents.
When developing a product idea, it’s essential to establish that there is a market, but you should also ask whether you are best placed to serve that market.
Is Anyone Interested?
A product idea may not find a market. Perhaps it addresses a need, but customers aren’t prepared to pay enough to build a profitable or sustainable business. More likely, there is little interest. There are several ways to establish whether a market for a product exists. For a preliminary survey, Google Trends and the Google Keyword Tool are useful.
Google Trends tracks the interest in search queries over time. Consider our strawberry retail idea. Google Trends shows that there is some interest in strawberry delivery, but it is generally low with a large spike. The spike occurs in February around Valentine’s Day.
If we look at the related queries section of Google Trends, we discover that people are likely to be looking for “chocolate strawberry delivery” and “chocolate covered strawberry delivery.” That’s not our product, so some care has to be taken to understand what Google Trends is telling you.
Google Keyword Planner can help you to discover how many searches there are for a product keyword and what the competition is for that keyword. If we look at strawberries deliveries again, we see that there is a low number of searches, but competition for the phrase is high. Again, most of these searches relate to chocolate strawberries, not to our idea.
Let’s refine our keywords. If we look at “fresh strawberry delivery” in Google Trends, we see that there isn’t enough search volume to tell us anything.
Google Keyword Planner tells a similar story. The number of average monthly searches for “fresh strawberry delivery” is low, but competition for those keywords is high. Google suggests alternative keywords that include “fresh fruit delivery,” which has a lot of searches and high competition. Perhaps an eCommerce business that focuses on delivering strawberries from the farm to the door isn’t such a good idea.
It’s worth taking the time to try many different keywords to work out if anyone wants a product and what the competitive market looks like. Once you have established that you can implement your product idea and that there is interest in the product you want to sell, it’s time to consider its potential profitability and the competition. We will take an in-depth look at both in a future article.