How to Tell if Your Product will be Profitable: The Importance of Product Validation
All commerce sellers know the scenario: The seemingly endless quest for what to sell on Amazon. Or asking which products sell the best online. This is the step that usually causes new sellers to overthink and drag out the process. In fact, some never get out of this stage. But when you do finally find that "perfect" product, your heart speeds up and it feels like a giant weight has been lifted from your shoulders. Now all you need to do is find a factory who can produce your item at a certain price point and you'll be swimming in pools of cash!
Next, your countless hours searching for that one factory to give you the best price begins. If you’re lucky, you’ll have only wasted a week before you realize your idea isn't as great as you thought. So you cease your futile task and start all over. Sadly, others are still chasing this unicorn down a never-ending rabbit hole (I like mixed metaphors). The hunt for the perfect product will never end.
Why? Because it doesn't exist. What does exist are thousands of viable products that are just waiting to be improved, tweaked, or redesigned. In fact, most of the successful sellers on Amazon simply pick a suitable product, slap their private label on it, repackage it, put some effort into listing optimization, photos, marketing, customer service and keyword research. And that's about it! They're successful because they do the little things better than their competition. And it all starts with choosing and validating a product.
After you've answered the question of what to sell on Amazon and selected a potential best-seller, you should automatically do what the successful sellers do for every product they source. Ask yourself the all-important question: “Can my product idea be manufactured at a cost that will allow me to turn a profit?” This critical question needs to be answered before investing even a second into finding factories for your product. And you shouldn't even consider ordering samples until this question is answered to the very best of your ability.
If you don't know the answer to this question for absolute certain, it is time to add a very simple, but critical step to your sourcing game. Product Validation
What is product validation?
Software such as Jungle Scout, Unicorn Smasher, ASIN Inspector, AMZ Tracker, et all, make it incredibly easy for you to identify potential products that answer the "what to sell on Amazon" question. But they don’t help you to identify whether or not products can easily be manufactured to turn a profit.
Product validation is the process by which an importer determines whether the advantages of Chinese manufacturing outweigh the potential pitfalls with respect to their specific product.
When you validate your product before sourcing, you quickly identify all of the associated costs related to manufacturing, certifying, and shipping your product. This will help you calculate the Total Landed Cost (TLC) and give you a fairly accurate idea what your profit margin will be. This is one of the best reasons to spend some time on product validation before you begin sourcing.
We've seen this scenario countless times: People wait until the last minute, moments before placing an order with their supplier to check for things such as shipping costs, import requirements, duty rates and even patents! It's absolutely maddening. Not only that, it's a colossal waste of time to spend any effort on sourcing a product without first validating that product.
It never fails. A new customer signs up for our all-in-one A-Z service and fills out the info about their product. We then get our team in China to do the validation and it turns out the product will actually LOSE them money. This could have all been avoided by conducting a proper product validation and cost analysis.
Why should you validate your product ?
It will save you time and money on every product you ever source. BEFORE you place the order!
- No surprises - Determine exactly how the costs stack up against the savings.
- Know before you go -Know before you’ve invested in China, rather than after.
- Drive a harder bargain - A product validation will reveal crucial information about the costs associated with manufacturing your product. By going into negotiations with suppliers with this information, you’ll find yourself in a far better bargaining position.
- Become an expert on your product - By going through the product validation process yourself, it forces you to become very familiar with not only the product materials and specs, but also the manufacturing process and required certifications and compliance. This is also a great time to start gathering info for your product specification sheet. This spec sheet will be the definitive roadmap to making your product. Suppliers will have every possible detail spelled out for them so they don't have a chance to "fill in the gaps".
- Discover compliance/certification requirements - While you progress through the various phases of product validation, you'll start to discover if your product requires specific certifications for compliance. This is one of the most overlooked steps when sellers import their goods. If you neglect to get the proper certification for your product, your goods could be seized by customs, or worse, open you up to a lawsuit down the road. You'll learn more about this in our guide.
To conduct a proper validation, there are about 24 things you need to look out for. Luckily for you, we do this so often that we’ll share our strategies for validating products quickly and simply. If you'd like our Product Validation Guide, click the ebook icon below to download it!
Our detailed, step-by-step guide shows you how to validate your product BEFORE you invest money. You’ll learn how to calculate total landed cost to ENSURE product profitability before you start sourcing it!
Even though we offer Product Validation services, we recommend that every seller do their own. At least once. This way you'll develop more knowledge about the details of your product and the manufacturing and material details. But, if you don't have the time or desire to do the product validation yourself, never fear; we've got you covered.
Our team of sourcing and manufacturing experts in our China office will put together a very comprehensive Product Validation and Cost Analysis report for you and deliver it right to your inbox! In fact, if you look at this chart of how we stack up vs. our competition, we offer many services that hey don't have--and we offer them at no additional charge when client's purchase our A-Z package!
Whichever method you choose, be sure to adopt product validation as a part of your standard operating procedure when picking products to sell. Without it, you're operating on hope and luck. With it, you're operating on data and facts. Big difference.