Great entrepreneurs make data-driven decisions.
Many entrepreneurs are unsure which data to use and where to find it to make the right decisions about their product.
This article was created for that very reason. We will walk you through the data we use to validate a product and how to make it work for you.
How To Validate A Product Idea
To an entrepreneur, data is like spinach to Popeye. It’s a fuel that can supercharge your business.
It’s simple. You can make better decisions when you have more information about a subject.
Data can help you decide whether you should focus on selling a specific type of product or not. It could also raise a warning and save money, time, and energy.
We always advise you to validate your product ideas with cold, hard figures.
What data is needed to validate a new product? Here’s a quick breakdown:
The current size of the market in which your product is positioned.
The dropshipping niche market is highly competitive.
Our insights can help you make better business decisions.
Next, we will show you how to use data as fuel for your product idea validation.
Digging Deep into the Data
We’ve already discussed the importance of data when deciding what products to sell online.
It’s now time to get down to the business. You’ll see our step-by-step guide for validating any dropshipping products.
However, we will need to dive deep into a specific product to do this.
Today, we’ve chosen a product that combines the two lucrative niches: sports and fashion.
Understanding the size of the market
We need first to understand the market share of these products amongst other users.
We must examine the number of products ordered in this niche during the last 30 days.
Yoga pants are currently ranked in the middle, as you can see from the graph.
Over the last 30 days, there have been around 230,000 orders, which is relatively healthy.
We need to understand the product category “Sports & Entertainment.”
Let’s look at the graph below, which breaks down the subcategories of the “Sports and entertainment niche.”
The highlighted Fitness & Body Building category, including yoga pants, is the second-most popular and has received over 49,000 orders in the last 30 days.
This analysis should help you make the right decisions for your business. If there’s no clear interest, then looking at other ideas is best.
How to Check the Growth of A Market
We know now that most orders received by merchants in the last 30 days were for fitness products, such as yoga pants.
The next step is to determine the growth rate of the market.
This will allow us to determine whether the products in this niche are selling well, are stable sellers, or are seasonal products.
To better understand the situation, let’s look at the daily fluctuations in orders for these products over the last year.
We can see in the graph that this niche received a steady stream of orders all through 2018, but there was a spike in October. It’s unclear what caused the end in charges, but one store could have run a flash sale and nailed it.
The most exciting thing about this graph is that the number of daily orders has increased significantly compared to when 2019 began.
It was great to see that things are moving in the right direction.
However, it’s a good idea to verify insights using search data from Google Trends.
We just searched on Google Trends for “yoga pants,” and you can see that there have been a high number of searches in the United States for this product over the last year.
When we looked at the worldwide searches for yoga pants…
We see that yoga pants are famous around the globe.
Dropshipping stores selling similar products have doubled sales in the last 12 months.
So far, yoga pants seem to be a top-rated product. But we are not done yet.
Learn about the Competition
The next step is to determine how competitive the niche is.
Valuing the product by ensuring it grows and gets orders is essential. If the market is saturated, then the growth of a product is not as significant.
This is the number of merchants that sell products in this niche.
In the subcategory of Fitness and bodybuilding, we found 1,500 dropshipping shops selling products over the last 30 days.
This is a good indication that many users are selling similar products. However, it does not give us a complete picture.
This will allow us to see how sales are divided between the 1,500 users.
Ifa few users place the majority of orderss, the market may be already monopolized and challenging to enter for new businesses.
If we look at the orders and see a good spread across 1,500 shops, this will indicate that a brand-new business can sell these products successfully.