How to Market Test Your Products / Inventions

Anybody who has a product likely thinks their product is the best, especially if they invented the product or have a large sum of money invested in it. But as we have seen on shows like Pitchmen and American Inventor, not every product is going to be a success. In fact, most will fail.
There are many reasons a product fails;

1. Pricing is too high. As a small business owner you likely can’t compete with giants like Wal-Mart on most products. If you had to pay for a product you invented, you have incredible costs that went into inventing the product and those costs need to be recovered, which raises the price of the item. Or, perhaps you haven’t researched the items current going-rates.

2. Product isn’t as cool as you thought. Just because the product is the most amazing thing you have ever seen doesn’t mean everyone else will think so.

3. No need for the product. If you invented a sunglass holder that holds two pairs of sunglasses; there’s just no need for your product. A retail store owner that sells sunglasses will likely want a holder that shelves 20+ pairs and an every-day person likely doesn’t want to take up the space in their home with this item when they can use the sunglass visor clip in thri car and have their backup pair of glasses on their vanity.
If there’s no need for your product, it isn’t going to fly off shelves.

So before you jump into getting space at your local mall you need to market test your items. Even if the items you’re looking to sell are “common” items that you know there is need for; you still have to do market testing.

You can begin market testing by simply researching what the items are currently selling for online. Do a Google Search for similar items (or the exact item) and see what you find. Also check eBay and see not only if the item is currently selling, but check “completed listings” and see how well the item is selling and what the total sales have been for the item.

If everything looks great, start by listing a few of the items on sites like eBay and see what happens. It’s quite amazing how a product can be hot one minute then not even a month later its cold. It’s better to lose a few dollars on eBay and discover the product is cold than to get yourself into a lease contract and get the bad news three months into your 2-year lease.
By beginning your market testing on eBay you will learn a few different things;

First, you will discover what the absolute lowest price is that you can sell your items for. eBay shoppers are different from every-day retail shoppers. eBay shoppers want the lowest possible bargain they can find. So if your item sells regularly for $20 a piece on eBay, you can safely assume that you can mark the same item up 30% - 40%+ in a retail environment.

Second, market testing on eBay lets you see who is buying your items.
You will see where you are shipping them to: If 99% of your items are being shipped to the eastern part of the United States, this tells you that the Eastern region genuinely wants your products. If you live in the Western region, you may want to consider sticking to online sales and focusing on Eastern customers.

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You will also see what other items your customers are buying. For example, if I am selling cosmetics, I can view my eBay buyers profiles and see that these same buyers are also purchasing purses and clothing. This tells me that I may want to expand my selection to include handbags and maybe accessories.

Third; you will get feedback on your items. Here’s the true test because eBay shoppers are without a doubt some of the most difficult people to please. eBay shoppers expect nothing but perfection. They could win the item for a penny and have it arrive wrapped in a bow on their doorstep the following day and still be unhappy. They will not hesitate to tell you any faults the product may have. I’d rather get a few bad feedbacks from an eBay customers telling me that the items I am selling suck as opposed to selling 200 of them in a retail store and having 180 of those customers never come back because they hate my products.

And finally, by selling on eBay you’ll be able to determine a lot of things about your business; how much will it cost you to ship 1 of your items? What about 20 of them? How much will it cost to ship the 20 of them to Brazil? How are you going to handle complaints? What kind of promotions work well for you? Etc. You never want to jump into a business without any strategy; testing the waters on eBay allows you to create a basic strategy.

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If eBay is a success, consider advancing to doing trade shows, craft shows, niche shows, etc. For example, if you sell clothing try and find different fashion / trade shows that you can rent a booth at. Booth rent at shows is generally relatively inexpensive since the show is only a matter of days or a week at the most. If the show is 5 days long, you will likely be able to get space for $10 - $70 a day, depending on what kind of show it is.
You can also consider things like outdoor festivals / events and flea markets.
Again, even if you pay $70 a day and only sell $40 a day worth of merchandise, it is better to discover the popularity of your item on a $30 loss as opposed to a $30,000 loss (being tied up in a lease agreement).

By selling at as many shows as you can you’ll see who is the most interested in your items and which of your items is going to fly off shelves and which are “dead weight”.

I recommend doing this form of market testing for a year if possible. You need to see how your products sell in all seasons so you will be able to determine what your lease budget will be. You will likely discover that during certain seasons (Christmas, “tax return time”, etc) your products are being bought consistently. Meanwhile, during the hottest days of summer, your products might be at a stand-still. So you will have to budget monies to accommodate your rent during the slow time. The worst thing you can do is sell items for a week in December, do fantastic, then jump into a contractual obligation to rent space somewhere for an extended period of time.

Also, if you really want to get to know your competition for an online store / sales site, check out SpyFu. SpyFu answers questions like:
1. How much do my competitors spend to get traffic?
2. Which keywords are right for what I want to accomplish?
3. How big is this guy I’m up against?
4. Are they just throwing money around, or are they following a system?
5. When has everyone else ramped up their spending?

This lets you know where your budget needs to be to compete. Having a strategy is always #1!