A Guide to Identifying Profitable Product Ideas

Technical Advisor: Matt Veal, Head of Presales (Bio)

Lucky for you, we have a comprehensive guide to help you select the right products for your eCommerce business. From the steps you need to take to get a winning idea for a new product to good ideas for products in 2024, our guide has got you covered.

But before we delve into all of this, let’s first touch upon all the prerequisites you need to check before you actually get into product hunting.

The first thing to consider before product hunting is your niche. There are hundreds of product categories out there with dozens of sub-categories.

An example

Take the beauty category for instance. You will find tons of sub-categories based on the customer type. Your customer could be a teen, a working woman, a mother shopping for her baby, and an older woman. Then come sub-categories based on the use type. The product could be used for dry skin, oily skin, acne prone skin or dry hair, rough hair, oily hair.

In the home improvement niche, the categories are divided based on the rooms. The kitchen is a huge category, so is the bedroom.

The examples above show how important it is to decide on the niche before you get into product hunting. If you get to product hunting and idea generation without any defined niche, you will be clueless and confused.

The way you choose your niche depends a lot on your own interests. If you’re someone who doesn’t know or has any interest in beauty products, delving into this niche would be a mistake – even if the niche holds tremendous potential.

Similarly, if you’re choosing a niche to sell in a market that already has dozens of competitors or a market that is not ready for the product – your investment will turn to dust.

While your own interest and your market should be top considerations, there are other questions you need to ask too.

Here is a list of questions you need to ask yourself when you’re figuring out the niche for your eCommerce business:

Passion and Knowledge:

• Do you have a passion that could translate well into product selling?
• Do you have any existing knowledge or experience in the niche?
• Can you put in the time and effort to learn about and grow this niche?
• Will you remain passionate about this niche in the long term?

Market Potential:

• Is the market size and demand large enough to support a business?
• Does the market have a potential to grow?

Competition:

• How much competition is there in this niche?
• How can you differentiate yourself from the competition?

Pricing:

• What are the average profit margins for products in this niche?
• What additional costs will you incur for sourcing, shipping, and marketing the products?
• Can you price your products competitively with these costs?

Additional:

• What are the customer service needs for this niche?

Now that you are geared up with ideas about your niche, we will get on to the process involved in coming up with a new product to give you an idea of what you’re in for.

The process to come up with new product

The first option you have when you want to find product ideas for your business is developing your own.

When you develop new products, you are delving into a blue ocean – a space where you are ahead of the competition.

Product personalization is and continues to be a trend in 2024. So, if you’re creating a personalized product in a growing niche that meets the customer’s needs, your product will sell. But before you start production, here are the steps you will need to follow:

1.     Generate new ideas for a product

The first step is to come up with a list of new products and get an idea of the market.  A lot of people believe they have excellent product ideas. But when they research the market, they find a lot of similar products that have already claimed a market share. Which means that the idea isn’t unique enough for you to be investing in.

In this era of competition and technological advancement, your product cannot be 100% unique. There is a slight chance that the product in your head is the next big idea. But in most cases, you will have an idea that overlaps with others. As long as the idea is profitable for you at present and scalable in the future, you are okay.

But how do you know if you have a profitable business idea?

The answer lies in other products in your category. When your product solves a customer problem that similar products don’t – that is your profitable business idea.

2.     Draw an accurate design

Once you have an idea about the market’s demand, it is time to convert your potential product ideas into design. If your product is intangible, this design might mean developing a proposal for your product that outlines the market potential.

But when you have a manufacturable product, you need to turn your idea into an accurate design including considerations about the material requirements and sourcing. Any lack in design will impact your final product and the manufacturer’s willingness to go forth with the idea.

Alternatively, if you’re thinking about drop shipping an existing product, you might want to start hunting for products and genuine sellers.

3.     Assess any legal requirements

Depending on your product, there could be some federal, state, or institutional requirements for your product. If your product is in the food and beverage category, you might have to seek FDA approvals before you make your product.

You might also have to check for patented ideas and product designs on Google Patents.

The manufacturer can also help you get an idea about these requirements. They might also help you develop accurate prototypes so you can file for certifications and approvals.

4.     Budget manufacturing costs

Once you have the legal requirements covered or have an idea about them, you need to get an idea about the money it will take to realize your big idea. Discuss your product’s specifications with suppliers, manufacturers, and logistics providers to get an estimate on the costs from the manufacturing processes to supplying.

An idea about the manufacturing costs will help you understand whether it falls in your budget or not. If it does not, you need to go back to the first step and reassess your idea.

5.     Seek out a manufacturer

When you’ve gathered quotes from suppliers and manufacturers, you need to pick the manufacturers that match your requirements and budget. Here are some points to look out for:

• Their capabilities to manufacture the complex design of your product.
• Their ability to scale up production when needed.
• Take a tour of the manufacturing facility to gauge the facility’s health and safety standards.
• Remember to sign a contract and an NDA (to ensure your product design’s confidentiality).

Proven methods to come up with a great list of winning products

Every product starts with a list of potential product ideas. Although we’ve covered idea generation briefly earlier, it’s now important that we deep dive into the process. This way you will know where you can start looking for ideas rather than just waiting around for inspiration.

A solid idea lays the foundation of a successful project. The same follows for product selling, whether you make your product, or a drop ship one. In this section, we will explore 6 ways you can get excellent product ideas or get inspired to create a completely new product:

1.     Look around for problems

Every product is meant to solve a problem. So, a good place to get a new idea is to identify a problem. However, unless you have knowledge about the niche, you wouldn’t be able to identify the problem. And even if you identify the problem, you won’t be able to come up with an effective idea to solve it.

However, even the most knowledgeable person would take a few days or even months to find a solution. So, patience is the key.

You could develop a survey, conduct a focus group, or an interview with your target audience to expedite the problem identification process. Once you’ve gathered the problems, you can think about product ideas that can help solve them.

2.     Improve a competitor’s product

It takes a lot of time to develop new products. But one place that can give you a jump start is your competitor’s product. If you’ve identified your niche, look through the competitors’ offerings. You could identify an issue that the competitor product doesn’t solve and viola – you have an idea!

A great place to look for issues in your competitors’ products is Amazon one- and two-star reviews. These reviews offer you insights that you cannot find anywhere else. However, if you have a budget, you might even spend it on R&D to find a market gap to begin with.

If you don’t find an issue, simply offering a similar product at a lower price and better design could do too. However, make sure that your competitors are not strong enough to match your low price. If that happens, you’ll be driven out of business in no time.

3.     Look for product add-ons

Not everyone has the budget to manufacture laptops or phones. But add-ons can be manufactured at a fraction of the price. For instance, mobile phone cases, laptop skins, or laptop bags are clever add-ons that make many sellers successful.

4.     Revive an older products

Another great way to get an idea is to look through old products and start selling them again. Old courses with updated information or century-old products with new features can sell like hot cakes in the market.

Think heated butter knives, smart mugs, and smart dog collars. The possibilities are endless when you take a product that already exists and revamp it with technology or updated information.

5.     Look at expiring patents

Expiring patents open up new possibilities for competitors. You can visit Google Patents or go to the United States Patent and Trademark Office (USPTO) website for patents in your niche that are about to expire.

You can start with your R&D and manufacturing and launch your product just after the patent expires. Some patents could even inspire you into creating products and designs that solve a new or similar problem.

6.     Read studies

Published studies in your niche are a great way to get an insight into the market and research. This could even lead you to developing an idea that no one’s ever thought of before or discovering a problem that no one is solving yet.

For instance, some languages do not have an effective optical character recognition (OCR) system. You could make a lot of money if you find the use case of a software that decodes this language.

Top 10 product ideas for your business

Now that you have the hang of the process you need to go through from the idea phase to setting up the business, let’s get on to the list of the top 10 winning product ideas for you to create a product to sell:

1.     Skincare products

The skincare market is expected to reap a staggering US$186.60 billion in sales in 2024. The market is also expected to grow at 3.08% per year. These stats prove that the skincare industry is quite promising, even with hundreds of competitors with established brands.

However, licensing regulations make skincare a challenging industry. If you have the knowledge and experience, this is one of the best small business ideas for you.

2.     Smartphone accessories

Instead of hunting for new product ideas to sell, you can make a move in an existing market. The accessories market is one such niche that you can delve into.

Smartphone accessories like speakers, headphones, SD cards, and earbuds are delicate. Therefore, customers need frequent replacements.

If you have the investment for a manufacturing process, you can start a smartphone accessory business. Just make sure that you are offering quality to appeal to your customers’ pain points. On the other hand, with just clever marketing, you can also dropship these products to the customer without the need of a significant investment.

3.     Craft products

If you’re crafty, you can generate winning product ideas that don’t require much investment. People love to buy and gift customized creations.

You can sell them anything from customized cakes to paintings. The best part – you can charge a premium price for your creations if you create high quality pieces.

Etsy and Amazon Handmade are two great platforms where you can feature your products and get attention from people who love handmade, customized crafts.

4.     Decorative reusable water bottles

Increasing awareness about the environment has skyrocketed the sales of sustainable products like reusable water bottles. These products appeal to the younger generation. So, you might want to design your products wisely.

This product is also a great option for you if you don’t wish to manufacture your products. Reusable water bottles are not new in the market but are one of the hottest dropshipping products in recent times. If you market your product wisely, you can make it big in the market.

5.     Pet care products

In 2022, Americans alone spent US$136.8 billion on their pets. Pet ownership is also steadily increasing which means that this industry is growing.

Because of the demand, products in the pet care industry offer promising returns. Whether you choose to drop ship in the pet care industry or manufacture specific products, this industry is a great one if you have interest and knowledge about pets.

6.     Digital Products

Digital products like e-books, templates, or courses are in demand in 2024. After the Great Resignation, many people are willing to learn new skills and develop new proficiencies. Plus, digital products help you to generate a passive income – meaning that it gets you profits even while you sleep.

However, just creating one digital asset isn’t enough. While the idea of a passive income stream sounds amazing, it requires:

• A lot of effort and continuous improvement.
• Keeping an eye on your competitors’ products.
• Making use of your user’s feedback to enhance your quality.

1.     Kitchen Gadgets

With remote job opportunities on the rise, more and more women are getting a chance to participate in the workforce. Therefore, they need kitchen gadgets that reduce the time they spend in the kitchen. If you have expertise in this niche, this is the perfect product type to invest in.

2.     Home office products

Another category that is gaining traction because of the rise in remote and hybrid work opportunities is home office products. You can either go for small items like stationery to big products like file cabinets, desks, and other home office furniture.

You can also get into tech products like laptop accessories or webcams if you’ve got the experience. Additionally, you could drop ship these products but be aware of the seller rating before selecting electronics for drop shipping.

3.     Fitness products

The rise in health awareness has given this niche a boom. Fitness products like smart watches, gym accessories for home gyms, armbands, sportswear, and towels are some trending products in this niche that you can feature on your website.

If you’re going for manufacturing, you can even focus on branding to charge a premium price once you’ve gathered some loyal customers. You can even go for the bigger products like bicycles and treadmills once you’ve established a brand and gathered enough profits.

4.     Services

If you’re a skilled content writer, graphic designer, or business consultant, you could provide your services to other businesses. When you are the product, you won’t have to invest in manufacturing. However, make sure to upskill yourself and develop a portfolio to attract potential clients.

How to make sure that you have the product everyone needs

By now, your mind would be swimming with ideas for the perfect product. But the story doesn’t end if you have one of the most trending products in the market, but no audience. In fact, this is where the story actually begins.

When you develop new products, you are setting up the building blocks for your business. But the success of your business depends on what you do next.

●      Market your product

A great product idea only becomes profitable when you market it to the right audience at the right time. If you already have an eCommerce business and an established customer base, your new product will get a jump start in the market.

But if you have amazing new product ideas to sell but no audience, building one would be tough work, especially if you have competitor’s products to beat. Paid advertising and organic SEO can help your business to reach your audience.

But this will be gradual work. You can’t expect to have a brilliant product idea and start selling it within a few days. If you’re getting the product manufactured, it might take a lot of time before you can actually start selling and making a profit.

Tips to market your product

If you don’t know how to proceed after the idea generation or even product manufacturing process, here are some tips that can help you market your products:

• Take a graphic designing and content marketing course before setting up your social media pages.
• Get an idea about paid marketing on social media platforms including how to define the target audience and the marketing budget you should spare.
• Invest in a website. The authenticity of any eCommerce business comes from its web presence.
• Enable multiple payment gateways.
• Build backlinks to your website to improve Google rankings.
• Take amazing photos of your products.
• Write catchy descriptions or outsource the work to a freelancer.
• Select relevant influencers in your niche and invest in influencer marketing.
• Build authority in the niche by publishing blogs or uploading valuable YouTube videos.
• Develop videos that showcase the product in use.
• Encourage customers to leave reviews on your social media pages or Amazon listing.
• Host giveaways of your product to increase customer engagement.
• Invest in customer service to encourage repeat purchases and word-of-mouth marketing.

●      Manage inventory

After marketing, you will start getting orders. When this happens, you need to have an inventory to put up with these demands.

A product idea is only profitable when your sales and inventory management are smooth. That means that you have sufficient inventory to cater to the orders, or a manufacturer that has the capability to produce products on demand.

On the flip side, you need to make sure that you don’t invest in inventory more than the demand. Even if you have a great idea like sustainable products, it might not do well in the market. If you have invested in loads of inventory, your inventory holding costs will rise and your money will be stuck.

●      Develop new products

Your business cannot progress if you only work on a single idea. Over time as your business gathers customers, your perfect product will have competitors. You cannot always re-innovate to beat your competitors’ products.

To stay relevant in the market, you need to gather new ideas for other related, but trending products. New products will also keep your current audience engaged and open more avenues to earn profits.

Bottom line

Several businesses launch new products every day. However, not all these products prove to be profitable for these businesses.

The first step to a successful business is identifying profitable product ideas. This guide included all the ways you can deploy to generate ideas. It also included a list of the top 10 products to get you inspired and ready to get on to the journey of idea generation.

While the idea generation process is up to you, Pimberly can help you with management tools and top-notch systems for your e-commerce platform.