Starting an ecommerce business

Start an Ecommerce Business – Part 3. Understanding Market Demand

By October 10, 2017November 21st, 2017No Comments

Understanding Market Demand

To begin to understand market demand ecommerce business, we’re going to look at and use a few tools that will help in addressing our know who is interested in our product if there is any at all?

 

Google Keyword Planner Tool

Lets start with the Google’s Keyword Planner Tool. Our example product choice will be a camera accessory for your smart phone. The Google Keyword Planner Tool allows you to search for keywords on the google search engine. This information helps determine how many searches are there per month for term your looking for. It provides how much competition there is competing for it and related search terms. This is a great start point for understanding potential demand.

To use Google’s Keyword Planner tool you need to have a Google Adwords account which you can get for free. Once you have an account, login and select Tools from the top menu, then select Keyword Planner. On the next screen, click Search for new keyword and ad group ideas.

On the next screen enter your product idea (Note: You may want to try several keyword variations for best results). Double check your settings under Targeting to make sure they’re to your liking. In particular, you want to make sure you are targeting the countries you plan to sell to.

For our example, we entered “camera accessory for smart phone”. We selected Australia as the primary market we would likely target. This information we will want to get our validation from those same markets.

On the next screen, it will be on the default tab Ad Group Ideas, change that to the tab labelled Keyword Ideas.

The first column will list the keywords you searched for. It will also show the various search queries related to the keyword you entered. The second column shows you the number of searches being performed each month in the geographic area you specified. The third column is the level of (Google Adwords paid advertising) competition for each keyword.

 

List Results to focus on

In your list of results, there are two things you want to pay attention to:

Long-Tail Keywords – Long-Tail keywords are keywords that are made up of 3 or more words. You’re not just looking for long-tail keywords, but long-tails that are closely related to your product.

High Search Volume – This can be subjective however you want to look at long-tail keywords that have a decent search volume each month. The higher the search volume obviously means the more people looking for your potential product. This can start to give you a good understanding of how in-demand your product is.

We looked through our results for “camera accessory for smart phone” and sorted the results by the highest search volume:

There is no minimum number of relevant searches per month we would recommend but it’s important to recognize the current potential. Based on our product idea, with a total of over 100,000 searches per month we would feel pretty strongly with this particular product choice, especially since many of the keywords are lower competition. The lower competition of the keywords generally means that it would be easier to rank for these keywords and cheaper to purchase ads based on these keywords.

 

Validating Geographic Demand

To understand market demand ecommerce business, we know that people will for what your selling. For locations people will search for camera accessory information and products for their smart phones in Australia. But who exactly are these people are where in particular do they live? Sometimes products and trends can be very specific to geographic regions. For that reason, it’s worth investigating where demand is coming from a little more.

To do that, you should use Google Trends. Not only does Google Trends display the overall trend for your keyword; it can also show you the top countries and cities that are searching for your particular keywords.

Which countries are searching for “Camera Accessories for Smart Phones”. This shows the Philippines and Japan are in the top countries searching for our potential product. With this information we may want to consider marketing and shipping to these countries when we move ahead.

What cities in particular have the highest number of searches for “Camera Accessories for Smart Phones”?

Much like the trending countries, the cities searching for our potential product give us insight into the distribution of interest. It will also give insight into where you should focus your marketing efforts should you decide to move forward.

 

Social Media Demand

Now that you’ve validated search interest from a search engine interest perspective, it’s time to look at interest on social media.

Twitter is an effective source for looking at market potential and product interest. You can use a service like KeyHole to search for the total volume of tweets per day mentioning your particular keywords.

We used KeyHole to search for the total volume of Tweets each day mentioning the words “Camera Accessories”, and “Smart Phones”” in a single tweet.

From the Keyhole graph we can see that everyday approximately 150-250 people are tweeting our keywords. To get a better sense of what exactly they were tweet about and the sentiment of their tweets we also did a search on Twitter.

Here were just a few examples that in particular, hinted towards buying intent:

Using social media to research your product not only reveals the volume of conversation surrounding your product idea but it also helps you discover the language your potential customers are using. This can be helpful when creating ads or writing product descriptions down the road.

 

Bringing It All Together

You can see here that understanding Google’s Keyword Planner to uncover search demand by searching for relevant keywords to your product validation. This supports you in using Google Trends and to better understand who is searching for your potential product along with the countries and cities they live in. Finally, you can see how to use KeyHole and understand demand by how many public social conversations were happening each day around your product. In the next part we will calculate competition and margin into your product to assess profitability.

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