How to decide what product to sell on Shopify
Apr 23, 2020

How to decide what product to sell on Shopify

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The research involved, sourcing, and back-office set-up

Shopify isn’t just an e-commerce platform, it’s arguably the best e-commerce platform, and it has significantly changed the way products are sold worldwide. It has all the e-commerce and point of sale features you need to start, run and grow your business from practically anywhere in the world.

While starting an e-commerce store on Shopify is as simple as clicking a few buttons, building a successful business that turns a profit and grows is slightly more complex. The success of any business is determined by several things – a key factor being the product you choose to sell.

Before you even consider setting up your Shopify account, the first decision you’ll need to make is what to sell on Shopify. It can be easier said than done. Let’s explore the many ways you can decide what to sell on Shopify including researching niche markets, on-trend products, and even what you can’t sell on Shopify.

Then, once you’ve got your product, you’ll need to know the basics of getting your Shopify account set up correctly – so you can put your best foot forward right from the start.

Table of contents

  • Researching products to sell on Shopify

  • Product opportunity types

    • Search keywords

    • Solve a problem

    • Find a niche market

    • Be on-trend first

    • Low overhead, high-profit margins

  • Where to look for products

    • Social popularity

    • Browse online marketplaces

    • Read customer reviews

    • Go local

    • Start with what you have

    • Trust your instincts

  • Trending products on Shopify

  • Products to stay away from

  • Sourcing your products to sell on Shopify

    • Make your own products

    • Manufacture your own brand

    • Find a supplier

    • Dropshipping

  • The best way to set up your back office

    • Cloud-based accounting software

    • Work better with A2X for Shopify

    • Peace of mind: partner with an expert

Researching products to sell on Shopify

Finding an in-demand product is one of the key pillars of any successful business. With e-commerce, the options are truly endless, and all that choice is often what overwhelms new entrepreneurs before they’ve even started.

With over one million businesses across 175 countries using Shopify to sell their products, at times it can feel like there’s nothing new to sell. However, a product doesn’t need to be new. It simply needs to solve a problem for a group of customers.

Rather than trawling aimlessly through the internet or waiting for a product idea to spring itself on you while driving the kids to school, use readily available resources like the ones below to set you in the right direction.

The best place to start on your product research journey is to consider the different opportunity types that can help you identify a great product or niche opportunity.

Search keywords

Keyword research can be a little technical, but once you understand how search engine optimisation works, it’ll not only come in handy for identifying product opportunities, it’ll be useful for marketing your product too.

Google and other search engines can tell you a lot about the demand for a product. Keyword research involves strategically looking for product or niche- based keywords that are searched for at a high volume with low competition. 

Using a search-based product like Google Trends will not only show you what people are interested in, but also when they’re interested. Knowing any trends your product is likely to follow, you can predict and act when it’ll be most valuable to you.

Solve a problem

Customers often buy products because they’re looking for a solution to a problem. You buy a garlic press because it’s easier than cutting garlic by hand, and you buy pegs so your clothes don’t blow away in the wind.

Products that solve a customer’s pain point – frustration, lack of time or poor quality – are not only highly profitable, but highly in demand too.

Find a niche market

Whether you tailor a popular product to a niche market, stumble across a niche of enthusiastic hobbyists to service or sell a niche product you’re already familiar with and passionate about, going niche has huge advantages.

You can quickly build a small, loyal and engaged following of customers who are more inclined to spend money on products they need and want – rather than focusing on supplying the masses.

You can also take advantage of niche keywords and hashtags – without having to compete against other merchants.

Be on-trend first

Be on the lookout for new trends and create a product that takes advantage of them. The trick is not to confuse ‘trends’ with a ‘fad’. A trend solves a problem or conjures hype for an existing need in a new way, meaning its demand will hold much longer than a fad. A fad is a novelty or gimmick which is only profitable short-term.

Low overhead, high profit margins

As an e-commerce seller starting out, you might want to focus on products that require minimal overhead – especially if you don’t have the capital to invest in setting up your business. Products that cost less to make, promote and ship usually have a higher return on investment.

Where to look for products

Social media popularity

Like keyword research, Instagram’s hashtags are a great source of product opportunities. Just as Instagram categorises posts and helps users find what they’re looking for, you can also use hashtags to identify niche markets and advertise to them.

Do a quick search of hashtags relevant to the product you’re considering, to see what kind of popularity and following it has on Instagram. This will also tell you whether Instagram is a good channel to start advertising your products on.

Go searching for product gold on social curation sites like Pinterest. It’s one of the fastest-growing social networks, and its popular section for what’s trending will immediately give you an idea of how in-demand your product idea is.

Browse online marketplaces

Check out what’s popular and trending on other online marketplaces, like Amazon and eBay. Research which categories and products are best sellers – this will give you an idea of a product’s popularity and profitability, as well as how much competition is in the market.

Read customer reviews

Online customer reviews are a wealth of information if you know what you’re looking for. Any trending or regular feedback provides great inspiration for product development, whether it be an existing product made better, or a brand-new solution altogether.

Go local

Sometimes the best place to look for inspiration and product ideas is on your own doorstep. Take advantage of your location and consider selling a product that isn’t yet available in your area. If you already sell a product in a brick-and-mortar store, make it available online to your overseas customers.

Locally based sellers can offer local customers reduced shipping costs, and benefit from the loyalty and engagement of their local community.

Trust your instincts

If you already have a list of product ideas, do your research to determine its popularity, size of market, competition and financial viability. When you’ve done as much research as you can, don’t forget to trust your gut instincts. If you’re confident you’ve found a great product, and the research supports the same theory, don’t second guess yourself – your e-commerce journey relies heavily on you leaping forward.

Trending products on Shopify

Shopify will often post articles on the latest trending product ideas including Google Trends research. If you’re stuck for ideas, it can be a good place to start.

Products to stay away from

Shopify is an ecommerce platform that provides the tools and technology for merchants to set up online stores and sell products and services – on their own websites, at physical retail locations, marketplaces and more. There are, however, certain items and activities which are prohibited.

Sourcing your products to sell on Shopify

Now that you’ve selected a product to sell, validated it and evaluated its market demand and potential competition, it’s time to figure out how you’ll go about sourcing your products.

There are pros and cons to each of the methods, and depending on your product, market and niche, one may be more suitable for you and your business than the others.

Make your own products

This is a good option for those looking to operate their e-commerce store as a side gig or hobby, because of the time involved. Obviously, not all products can be handmade, so product choice is limited, but making your own products is a great way to maintain full control over product quality.

Manufacture your own brand

If your product doesn’t currently exist and you need to create an own-brand product, you could find a domestic or international manufacturer to make your product for you. Domestic manufacturers generally cost more than those located in countries like China. Business-to-business marketplaces like Alibaba are a good place to source overseas manufacturers.

Find a supplier

Another option for those who want to get up and running quickly or sell a variety of products is sourcing directly from a supplier at a discounted wholesale price. This way you don’t run the risk of developing a product no-one will buy, as you’re dealing with established brands, and minimum order requirements are generally low. 

Dropshipping

Finally, dropshipping is the process of selling products that are sourced and fulfilled by a dropshipping partner – meaning you never have to store inventory. When a customer makes a purchase from your online store, the order is forwarded to your dropshipping partner who packs and sends your product to your customer on your behalf. Dropshipping is normally the cheapest option for those ecommerce businesses starting out.

Additional resources: The 11 Best Shopify Apps for Dropshipping Stores

The best way to set up your back office

Processes to automate and tools to help

There’s a lot of work involved with researching and sourcing a product to sell on Shopify, so the last thing you want to do is create more work for yourself with back-office administration.

The secret to scaling your business is automating manual and time-consuming back-office processes by integrating tools with your Shopify account.

These tools will help you put your best foot forward right from the beginning.

Cloud-based accounting software

As a new Shopify business owner, it’s normal to start your Shopify journey using manual bookkeeping and spreadsheets to manage your finances. But they are a means to an end. At a bare minimum, you’ll want to invest in good cloud-based accounting software – especially if your goal is to make good money with your business.

Xero and QuickBooks are both highly compatible pieces of online accounting software, designed to make managing the finances of your business easier. But as your Shopify store grows and your order transactions increase, importing each order individually into your accounting system will cause problems and make manual reconciliation to your bank account a nightmare.

Additional resources:

Work smarter with A2X for Shopify

A2X for Shopify generates summarised statements tied to each Shopify pay-out summary, making reconciliation super easy.  

A2X saves Shopify sellers a lot of time (and number-induced headaches!) by automatically pulling out fee, refund and adjustment data – automating that manual process from hours into seconds.  

By automating and streamlining, A2X creates useable data so you’ll always have accurate financial information you can rely on to make those important business decisions.

Find out more about how A2X for Shopify works: The Definitive Guide to Shopify Accounting

Peace of mind: partner with an expert

While there are lots of accountants who are familiar with Xero and QuickBooks, not as many are equipped with the skills and knowledge to work with Shopify sellers who use A2X. There’s a huge benefit in finding an e-commerce specialist accountant that is also an A2X expert. They are highly experienced in e-commerce accounting and understand the complexities involved with selling through Shopify.

The ultimate checklist to finding a product to sell on Shopify

There are several ways to go about deciding what product to sell on Shopify. In fact, there are so many options that most new entrepreneurs get stuck in their tracks before they’ve even made it out of the gate.

As discussed, there are steps you can take to ensure you give your business the best start possible in life. Research different product type opportunities, know where to look for product inspiration, then source your product and use tools to automate any manual back-office processes holding you back from scaling your business.

If you put in the hard yards up front, your Shopify store has a great chance of being successful.

Happy selling, new Shopify merchants!

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