One of the hardest aspects of running a brick-and-mortar or ecommerce building is keeping tabs on supply and demand. Most of the business ventures which fail involved a product with little or no demand, or the supply was so great that customers were never pressured to buy. They could buy whenever they felt like it.
Most business owners overlook the importance of supply and demand when they set up a marketing campaign. They are more interested in SEO, and banner exchanges. They explore Pay Per Click programs, and traffic generating opportunities. All of their time is spent learning how to gain exposure. Very little is spent on learning about their customers, and measuring the supply and demand of their product.
A Good Product Addresses The Demand
One of the most important aspects of marketing is a good product. It is amazing how many ecommerce businesses start without a product to sell. The business owner believes that their drop ship store is their product. Or, they believe that their ebook is the product.
This is not a product. Your product is not something tangible which people will pay for. In fact, most products can be found in a dozen places, so there is no reason for anyone to feel pressured to buy before leaving the website.
The product is what the customer will leave the website with. A book on property management, a training course on stock investing, a starter kit for a work at home business, these are not products.
All products fall into three categories:
1. They solve a problem.
2. They make life easier.
3. They help people improve.
If a website sells a starter kit for work at home businesses, then it should address these three aspects of the product. What problems will this product solve? How will this product make the business owner's life easier? How will the business owner get an edge over the competition with this product? The answers to these questions are the 'real product.'
That is why one website can make thousands of dollars a month, selling ebooks on investing, while others fail. Take the website www.fool.com as an example. This website has mastered the art of selling their 'problem solving' products. Yes, you can arrange a mortgage through one of their brokers...but the reason why you sign with their broker, is because they promise to help you save money, or #2 on our list.
Supply
Another important aspect is to address the supply. There are thousands of websites selling Ipods for less than retail. There are hundreds of thousands of sites that help people start a business. The supply is big. However, is there a demand?
The demand can be drastically reduced by addressing singular problems involved with starting up a business. For example, many websites tell small business owners to visit their local municipal offices and learn what is involved with importing or exporting. However, a website that doesn't tell people this, instead, it offers a quick importing/exporting tutorial will have a problem solving product.
The Ipod store, which includes every single Ipod accessory, including places where it is legal to download songs will do better than an ecommerce store that lists thousands of electronics.
Supply & Demand
Put them together. Demand is convincing people that there is some reason they need to buy the product now. It doesn't matter if there are 40 000 other websites selling the same product. Focus on 1 - 3 problems that your product will solve and broadcast it across the net.
Supply does not necessarily mean the number of product for sale. Instead, it means the number of product that your customers have available to them. There may be 1000 ebooks on property investing - each one good. However, yours may be the only one entitled 'How to Build a Property Portfolio Without Loosing Your Family Home.'
Now, the supply has narrowed to - 1 - You.
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