Chapter 2. Choosing a Product or Service

Most people who open a Yahoo! store know in advance what they’re going sell. Some choose a product that they know, have, or can source, or a service that they can provide. Others may not have a specific product or service in mind but want to join in and benefit from the eCommerce revolution.

Every business, no matter what it sells, must find a way to create a unique selling position to compete in the world of eCommerce. That unique selling position, or USP, consists of two parts—a customer niche and a market niche. We’ll discuss the market niche and unique selling positions in more detail in the next chapter. In this chapter we’ll focus on the first step of creating that effective USP for your online business.

Even if you already have an ongoing home business that you wish to bring online, you will find the process described here and in the next chapter valuable to the success of your online business and ascertaining whether you are targeting your product or service properly. For without a well-defined, effective USP built directly into the design of your online storefront and the creation of content that reflects it, you will find it exceedingly difficult to effectively promote and market your finished online storefront as we move through the steps of launching your Yahoo! store.

Selling to Human Motivations

Most business people make the mistake of thinking they should look for a product to sell when they should be looking for a market to sell to. Here are some basic criteria to keep in mind when choosing a customer niche.

First of all, products don’t buy from you—people do. That means first focus on a target market of people and what human needs you are going to fill. Another way to look at it is finding a pain in the marketplace and curing it. What negative aspect of the marketplace in terms of a product or service can you identify? Then offer a solution.

Second, make sure it’s your target customer’s passion, not yours. The target market you choose, the human need you will fill, must be passionate about the problem you are going to solve or the need you are going to fill and back that passion up with good money to pay for your solution. There are all kinds of people who are passionate about a variety of subjects but are unwilling to spend money on them. In other words, money talks, baloney walks.

Another way to look at customer passion is shopper motivation. That is, what motivates a shopper to buy? Different shoppers are motivated by differentthings, even at different times. When trying to choose a product or service to sell, keep the following human motivators in mind:

• Need for information

• Economic motivations

• Need to be entertained

• Social motivations

If the Internet is known for anything, it’s information. That’s where the Internet shines. And the need for information is a great human motivator. The Internet is like the Library of Congress multiplied millions of times. But it’s also a vast information storehouse that is hard to navigate. Provide a ready source of information that meets a shopper’s needs, and you can turn that shopper into a customer.

Economics is a strong motivator. It goes without saying that commerce on the Net is a fast growing segment. After all, if you didn’t believe that, you wouldn’t be reading this book! And what is the economic motivator? A quality product at a fair price, a nice selection, and a secure and convenient way to buy. All these and more would entice a shopper to open his wallet and buy from your online store.

Entertainment is another motivator. We all love to be entertained. We’ll even pay for it if we feel the value is there. So think about ways of selling entertainment products and services to the online shopper.

Finally, human interaction is a strong motivational force. The opportunity to hobnob with those of similar interests can be turned into a profitable business. Think about community sites that provide live chat or ways for people to meet one another. Fill the need to interact and you can build an effective business on it.

Selling to Human Needs

Many years ago, a psychologist by the name of Abraham Maslow spent a lot of time categorizing human needs. Dr. Maslow organized our human needs into four categories:

• Physical needs

• Safety needs

• Belonging needs

• Esteem needs

If he were alive today and on the Internet, I bet he would have created a pretty successful Yahoo! store. Using his list of human needs, he would be very good at choosing products or services to satisfy them.

Let’s see how well we can do.

Selling to Physical Needs

The basic physical human needs are food, shelter, and clothing. If you were going to sell products or services that satisfy these physical needs, you could consider these types of products and services.

Let’s look first at some products that can satisfy our physical needs.

We all need to eat and drink, so selling food products online is a natural. It’s something that we all need, and better yet, it’s consumable. That means it’s a product that people buy over and over again. That’s good for a business. If you’re selling food, your product can be gourmet in nature, or ethnic or regional food types that certain customer segments would want to buy (see Figure 2.1).

Figure 2.1. This Northwest Gourmet corporate gift basket features the best gourmet foods of the Northwest.

The need for shelter from the elements is right up there with sustenance. Outdoor products such as camping and hunting gear and goods for the patio and garden make very good merchandise to sell at a Yahoo! store (see Figure 2.2).

Figure 2.2. Tents, Etc. sells primarily tents, at a discount.

Finally, though we might not buy clothing as often as we do food, covering our bodies is a social necessity. Apparel both meets the needs of the fashion conscious and protects us from the elements.

What about services? Which ones can satisfy our physical needs? Many who eat also cook. Providing consumer information on how to cook, what to cook, and where to cook is a very good service to sell online, such as an “Ask Mr. Chef” site where consumers can ask cooking questions of expert chefs.

Here’s another idea. We all eat out. Many of us eat out frequently. An online business that lists and categorizes restaurants and their reviews is another service that can be provided online and can meet human physical needs.

Take clothing and shelter. A Yahoo! store could provide a directory of the best places to camp in an area or a list of places to fish and hunt. One might even include the ways to catch, clean, and cook the fish and game that you get.

You then have a site that does double duty: where to hunt and fish and how to cook what you catch. Sell this kind of information and you have a business.

Figure 2.3. Restaurant Ratingz provides reviews and ratings of restaurants and cafés in your community. You can even write your own reviews.

Selling to Safety Needs

Feeling safe and secure is one of our strongest basic needs. The safety needs of protecting self, family, and home offer an online business the opportunity to sell a variety of merchandise and a nice selection of services to the online consumer. An additional safety concern is our health. Think about these product and service ideas if this is the type of human need that you wish to satisfy.

Let’s start with product ideas that satisfy safety needs.

Security products such as self-defense items and security devices to use when traveling would make very good products to sell at a Yahoo! store (see Figure 2.4). Books and tapes on self-defense are other product ideas. Child safety products such as baby seats and identification systems would sell well, along with home safes and surveillance equipment.

Figure 2.4. Safe-Mart sells a security system for the home.

Diet books, exercise tapes, and health and nutrition products are very big sellers on the Net. First-aid equipment and home medical supplies also are good products to sell as well as products for people with disabilities.

What about services?

Many types of safety services can be delivered online and would make a low-overhead, profitable business. They would include private investigative services, directories of alarm services and their reviews, and emergency alert services for the infirm and elderly (see Figure 2.5). Another service idea would be to provide nutrition and health information. Weight-loss information; nutrition services and guides; and even life, auto, and health insurance can be profitable services sold at a Yahoo! store.

Figure 2.5. 911 Broadcast offers emergency alert phone systems and services for contacting members of a community or organization in the event of an emergency.

Selling to Belonging Needs

To be loved, to have friends, and to be part of a family fulfill our need to be a part of something greater than ourselves. This need to belong and to express our appreciation for being part of something important offers a variety of online business opportunities.

Gift giving can satisfy the need to belong and express our affection for lovers, friends, and family. Online gift shops are a natural for the Net (see Figure 2.6). When people want to express their affections in a more tangible manner, gifts are one of the best ways to do it. Other products that do just as well are the traditional flowers, cards, and candy. Any of these should be considered as merchandise ideas for your online business.

Figure 2.6. Grandma’s Gift Baskets sell gifts baskets for all occasions.

Service ideas could include establishing a gift registry service. This type of service enables visitors to your storefront to list the actual gifts they want and then inform the potential gift givers. You can either sell the gifts directly or send orders to a gift house that would fulfill and ship them to your customers. Another good example of servicing belonging needs is a genealogy service. Tracing one’s roots has become very popular over the last several years. And of course, another popular service that meets the belonging need is an online dating service.

Selling to Esteem Needs

We all like to gain recognition and feel good about ourselves. Products and services that cater to our esteem needs offer a great opportunity for an online business. How we feel about ourselves and how others perceive us is important to us. Recognition and vanity are strong personal needs that we seek to fulfill.

Beauty and grooming items and other personal care merchandise are the most popular products to sell if your online business is targeting the esteem needs of the consumer. For women, perfume, bath and body lotions, cosmetics, and even fashion products are key items to sell (see Figure 2.7). For men, cologne, razors, and electric shavers would fill the bill.

Figure 2.7. StrawberryNet sells women’s cosmetics for any occasion.

Other products that “stroke” our esteem are jewelry items for the ladies such as rings, diamonds, bracelets, and precious stones, and for men, watches, cufflinks, and rings. Then there are books and videos on personal care, dieting, and products to reverse the aging process.

Services that satisfy esteem needs include training and educational courses. Many of these can be easily offered online, such as computer certification classes or real estate courses. You can sell beauty tips to your customers or offer a jewelry appraisal service. Finally, you can offer advice on how to succeed in business or even, after reading this book, offer a course on how to set up your own Yahoo! store!

Should I Sell a Product or Service?

That’s a good question. Luckily you can do either one with a Yahoo! store. It makes no difference whether you sell a product or a service from your Yahoo! store. Both have their advantages and disadvantages.

Selling products online has certain advantages. When selling products, you’re not constrained by a limited amount of inventory. When selling products, you can grow your business more quickly because the more products you sell, the more income you make.

The disadvantage of selling products is that they normally require you to stock and ship them.

Ana Ricon, the About Guide to Online Business at onlinebusiness.about.com, speaks about the importance of supply and demand for the products you plan to sell. The advantage of an online services company is that making a profit is quicker and easier because the entire price of the service is paid to you. Also, there is the opportunity to generate repeat business if your clients are pleased with your service. The main disadvantage is there is only so much time. We’re only human and a person can perform only a certain number of services in a 24-hour period.

Selling services can provide you with immediate revenue but will never give you the biggest bang for your buck in the long run. In short, you can sell only so much of your time, whereas you can sell an unlimited amount of products. The trick is to turn a successful online service into a product. An example is to have a service that helps people market their online business, such as Internet marketing, and then sell them a book on how to do it themselves.

Zero In on Your Product or Service

As in any business, supply and demand determine what products or services succeed in the marketplace and which ones do not. Internet search engines can give you an approximation of how frequently people search for your product. There are a number of online tools that when used together can help you decide whether the product or service you have in mind is really in demand by consumers and what the supply for it is—that is, how many businesses are selling the product or service.

Here’s what to do.

1. Go to Google’s Keyword Sandbox at https://adwords.google.com/select/KeywordSandbox. The Google Keyword Sandbox is a great little keyword suggestion tool that you can use to see the popularity of your product or service. For example, suppose you want to sell baby toys. Type the phrase “baby toys” into the search box on the Keyword Sandbox page. Google will return a large list of suggested terms. Choose a few that are relevant and targeted to your product or business. Sometimes, to the right, you’ll see related terms and common misspellings. Note these, too.
2. Go to the Overture Term Suggestion Tool at http://inventory.overture.com/d/searchinventory/suggestion/. Take the keyword terms that you found at the Google Keyword Sandbox, enter one of the terms in the search term suggestion tool, and see how many people have searched for that term, and any combination of the terms or keyword, over the last 30 days. Overture will help slice and dice the keywords for your product or service and help you better describe the product or service you wish to offer.
3. Go to the Google search engine at http://www.google.com, enter one of your popular search terms or keywords identified by the Overture tool, and see how many websites appear under that search term. Your objective is to target keywords most frequently used by your target audience but with the least amount of competing pages. Important: Be specific with your search terms and keywords. For example, using the keyword phrase “baby toys” produces a number of different search terms at the Overture tool, such as “educational baby toy” and “baby learning toy.” Using these terms at Google will help you see competitive variations on your product.
4. Finally, find out who your competitors are. Go to Yahoo! Stores at shopping.yahoo.com, enter your product or service, and you will see how many companies you may be competing with in your product or service area.

This four-part process can help you see what products and services are in demand and who, if anyone, is offering them.

Choosing an Online Business

Though choosing an online business may seem complex at first, there are basically three ways to sell through an online storefront.

• Start from scratch. You don’t have to limit yourself to selling other people’s products or even services. Consider selling your own creative work. Or maybe a service. Ask yourself this: What one thing do you do better than everyone else? Maybe you’re a good photographer. Or perhaps you enjoy writing. Maybe you enjoy working with your hands, creating works of art or unique items that can be sold as gifts. You can also create your own information products such as ebooks or music files and sell them to consumers.

Sit down some evening with a pad and pencil or drop by your local coffeehouse and make a list of what you enjoy doing. You might be surprised that what you like to do can be turned into a product or service you can sell online. The key thought here again is to do what you enjoy!

• The second way to start an online business is through the traditional retail model. Buy products from wholesale distributors and resell them for a profit. If you’d rather not stock inventory at your home business then have the distributors drop ship your products from their warehouse. You take the orders; they do the shipping. You can also buy your products from local businesses. You may find businesses in your neighborhood that sell products, but do not have an eCommerce storefront. Approach them and offer to sell their product online in exchange for a percentage of the profits. A good example of this is the local crafters. They are a good source of unique products, and may be willing to sell to you at wholesale if you purchase in quantity. You can either buy the item outright or set up a consignment arrangement with them.

• Finally, there’s no reason why you couldn’t combine two or three of these online business approaches into one online storefront.

Once you’ve targeted your customer niche and the type of products or services you want to offer, it’s time to decide upon a market niche and that most important part of your unique selling position. Turn the page and let’s move on.