I don’t use product research software like Zonguru, Viral Launch, Jungle Scout, in my product sourcing or launching decisions. Everyday I’m on calls with clients helping them launch their products, learn to do market research, or grow their sales. Everyday I see people who have used product research software and are launching a product or putting a lot of money into a product and: 1. They think the market is bigger than it is 2. They’ve put all their eggs in one basket based on a bad differentiation of the product. But either way, I can usually tell that this product was found using product research software and I’m usually giving them information that makes them upset that they relied on product research software.
So let me explain the 3 reasons I do NOT recommend using product research software in your sourcing decisions. Let me just caveat that its perfectly OK to use product research software to look at a broad view of the data. It’s okay to see a list of products on jungle scout or zonguru and say “oh, that’s what’s currently selling on the market and trending”, but what I don’t want you to do is rely on that information. I want to talk about why I don’t want you to rely on this information.
The number three reason is that you have no background data on this information.
You don’t know why the product is selling. The seller could have their own shopify store and be driving traffic from a Facebook ad and just fulfilling through Amazon. Amazon is a fulfillment center you can install a plugin and have them do all the fulfillment for you. YOU HAVE NO IDEA WHERE THE DEMAND IS COMING FROM. You don’t know if people are buying this stuff in brick and mortar stores and they are just buying refills on Amazon. You are just seeing that there IS DEMAND, but you don’t know how that customer became a loyal fan and why they are buying from that particular brand and where the traffic is being pulled from.
In one example, and I have so many examples because of what I do everyday, but never the less, here’s one. I had a client that was selling a scented a candle, I did all my neat tricks, we re-branded the photos, optimized the listing and we could NOT SELL this product no matter what we did. We went back and studied the market and discovered people buy scented candles in stores and buy refills on Amazon. They aren’t willing to take a chance on smells bought online. Imagine how many giveaways you’d need to do to convince people to buy your candle a second time! This was a tough lesson to learn and the reason you don’t do product research BEFORE market research. You start with market research.
The idea could also be patented or protected, this is expensive to check and many skip this step costing them thousands in lost revenues later. Why not just start with market research and identify holes in the marketplace that haven’t yet been filled instead of copying someone else’s patented idea? You shouldn’t START with product research software but instead use it as a data point in your market research.
The number two reason is because you don’t have any differentiation or validation of the product.
Before I launch a product, I validate it. I got a question the other day about my trademark “When should I trademark my brand? Should I wait to see if I have sales before I trademark?” Well my answer is, I don’t launch a product if I haven’t’ validated that people are going to buy it and that I have a market to advertise to. I’ve already built up my interest list and marketing list, and have validated the idea. So I don’t even move forward with a product or take a chance and throw 10,000 dollars to the wind and say “hope this works!” I first research the market and ensure my differentiation matters.
You want to make sure that people are going to like and buy your product and you aren’t going to be lost in a sea of competitors. You have to understand why do people want to buy this pink version of this jade roller? Why would people buy this version over others on the market? Would people want to buy a prettier version of this product? Often I’ll see people spent a lot of money on gift boxes and packaging and making a product look really pretty; when the customer doesn’t’ give a damn. They don’t care about a gift box for this particular product. It’s wrong to assume that if you make your packaging really nice people will buy that particular product.
You need to understand why people want to buy it, what people think of your differentiation, and how they want to buy it. Do people want to buy a pink jade roller or a green coffee mug with a nice gift box? And how do they want to buy it? Do they want to buy it online, do they want to buy it in a multi-pack or as part of a unique bundle? Do they react better to Facebook ads or do they need to see it in person to evaluate it and thus you should sell in a brick and mortar store? Understanding your market is so important because you can understand how far your reach can go. If you can answer the why, how and what for a product based on market research, you will do well in validating it before the launch.
The first thing you’re doing on product research software is applying the same search filters as 20,000 other people who are following guru methods and finding the same product opportunities in the market. And because you’re not doing the market research, you’re thinking of the same differentiation’s as everyone else “better packaging, gift box, different color, paired with another product, selling in a two pack” this is very easy to replicate and you have no idea if the market will buy it. You are taking a chance and betting all of your money on black at the retail roulette table.
Take the time to find out if people want a green version of this product, what they think about your differentiation and how they want to buy the product. But bottom line, DIFFERENTIATE OR DIE! Why slap your label on a product and bring it straight to market if someone who is good at sourcing can say hey this just launched and it’s doing great during giveaways on amazon and ranking… go ahead and send 300 of those pink jade rollers to amazon and put it on their listing. You’re just asking for hijackers and copycats, or YOU ARE THE COPY CAT about to get lost in a sea of competitors and lose your investment.
The number one reason is that the data is inaccurate and can’t be trusted.
I was on a client call yesterday and asked the client what their sales goals were during their product launch. They said “well, my top competitor is selling 30 units per day so I think I can get to half that number.” OK, I said, who’s your top competitor, let’s take a look? I put the current sales rank into a free tool called FBAtoolkit.com that I trust and have been using for years, and at the current ranking, this competitor was selling just 3 units per day. My client was very upset. Rightfully so! She just found out she’d be selling 1 unit per day instead of 15. She had only used product research software to find this product and the data was extremely skewed in the wrong direction.
I’m not going to call out this software because I’ve found this time and time again with many clients and ALL of them are inaccurate or the person doesn’t’ understand the actual category ranking. #8 in kitchen and dining > knife sets > butcher knives will give you a completely different sales number than 35,000 in kitchen and dining. Many don’t understand the sales ranks and they put inaccurate data into the tool and the tool spits out mostly accurate numbers based on bad data inputs.
The data represents high demand and low competition but if you actually search on Amazon, you’ll see a completely different view. So if you see this coffee mug and you decide I’m going to launch the same one in yellow because I like yellow and its not available in yellow. But if I actually go out on Amazon and search for coffee mugs, I’ll see tons of yellow mugs and lots of competition I didn’t see on the software. I also might see version of this coffee mug being sold in different categories such as hardware or gifts. You didn’t actually go out and do the keyword research for the market of coffee mugs. When you go out and search for that keyword online so you can see the view of the entire market. Moreover, it’s important to understand why the customer is buying a product so that you can make really great market research and sourcing decisions.
Lastly, the data is not based on market research and presents a very narrow view of market opportunities. You don’t see why they are buying the blue coffee mug. You want to start with market research. I know you’re saying, this is what I’ve been taught, I don’t want to invent a product and I’m not good at coming up with ideas. BUT I want you to start by understanding the market and a particular customer. As we recommended during our seller round table session interview with Kevin King, focus on one customer. The runner. The girl who runs in the park everyday. Sell to her in the kitchen with cooking products, to her diet with supplements, to her electronics needs with a phone holder, to her fashion sense with a new pair of running shorts. You have the whole world wide web at your disposal. Go out and ask people what they need, what they think of products, what they buy and why. You could go out on that product research software now and use it as one data point. Then make your sourcing and differentiation decisions.
If you need help, contact me. I love teaching you how to turn your ideas ON! In our Canton Fair Experience course we teach this A-Z. We teach you ideation, validation, sourcing, negotiation. We teach you how to make money by sourcing at a 7x multiplier instead of the measly 3x that is recommended by most Amazon courses. We teach you to sell to all of retail channels and not just Amazon.
Thanks for reading my rant. I hope this helps you in your business decisions!