How To Evaluate A Product Opportunity

Finding the right product to sell!

by Catherine Franz

Day after day my in box, and I'm sure yours as well, fills with opportunity propaganda on how to make money. Do this, and poof, you're rich. Become an affiliate and sell my ebook, and poof, you're making lots of money. I don't know about you, but I can't tell what's a good opportunity and what's not any more. Because of this, I created a list of nine criteria, a sort-of checklist, to use when I do find something that I don't think is full of "poof."

1. Is the product any good -- in my opinion, and in my markets?

This is especially true for me. I've found that informational fre*e products are nothing more than a tease. I just get tired of wading through 150 pages to find four pages that have anything "real." In addition, if they aren't decently organized or written, less than 2 out of 25 reach this from the hundreds I've read, how different is the information?

Why would anyone want to pay $49 or $249 for the same thing offered in a $20 book? E-books aren't books. People don't buy them for the same reason. Even if the product isn't an informational product, what is different, unique, and important enough for me to buy that I can't buy somewhere else for less? Are the solutions clear, or presented from the producer's viewpoint and give me a sale dance?

Some people don't care and sell anything. Does this producer fall into that category? If they do, it's usually apparent. I've asked website owners who sell outside products about many confess they haven't read or tried it, and don't care about its truthfulness or value, just the revenue. I cringe when I get an e-mail that personally promotes a teleseminar and then in the material it says, "first time given."

How does this build trust and credibility? Well, it doesn't. Smart people don't return. The seller now incurs the label of the producer. Please, please, please, if you come across a poor product, ask for a refund. These people are counting on you not having the courage or taking the time to ask. If this would occur more frequently, the marketplace would demand and receive higher quality. Silence keeps poor products circulating. Vote with your wallet.

2. What is the market demand status for this product?

Where on the bell curve does demand fall? The bell curve, a symmetrical curve for illustrating where a product stands in the sales process, slowly rises for new products, reaches a curved plateau, then spirals down, sometimes fast, sometimes at the same grade of its rise, depending on the product and economic market conditions. This holds true for physical or information products wherever distributed.

How long has the product been in the marketplace? Is it new, old, or been over exposed? This takes some research. Caution though, if the original producer doesn't answer your question, that gives you the answer. What plans does the producer have for future sales product? Is it being offered to just anyone? Is he just starting? One strategy for ebooks sales is to sell to early adaptors, then set up an "everyone" affiliate program. What is their definition of "everyone?"

Is the opportunity going from retail product to Internet? Some opportunities don't work well with this conversion. For instance, take Coke, it's sold retail and won't work on- line. Website hosting and domain name is now an over sold opportunity. Jumping in on this product is jumping in on a plateau product that requires major pushing for production if you want enough worthwhile revenue. Are you willing to put enough effort into it (discussed later)?

3. Who Is The Producer?

Is the producer a stable company or new? The major reason new businesses have difficulty selling is because people take a wait and see stance. People prefer to buy from successful people and companies. Statistics confirm that 85% of new business will not be around next year. People want to buy from successful ventures, successful people, people that have stability, tenure.

At this point, if I am unable to uncover any solid information about the company, I don't continue past this point. Don't have any hesitancy about emailing or calling them with questions. Many times, I can't even find a phone number. No response, drop the opportunity and move on to another.

4. Revenue Generating Realty Check

Of course, the promo material will state the highest projections and usually leave out negative particulars. Ignore this, find, and calculate your own probabilities. Since I have a heavy background in accounting, it's easier for me to do this. Not your area, then ask an accountant for assistance, take a class, find a book, and learn this calculation. The skill will serve you many ways in the future.

Remember to set your personal feelings aside when evaluating an opportunity. It distorts the facts. Sell with emotions but don't make a decision to invest your precious resources with it.

Calculate your break even point, what income you want, how many sales equal that over what period, are three questions that need an honest answer. E-books need 117,000 to 225,000 exposures to generate sizeable revenue. How are you going to get that number? Yes, that number is possible.

5. Pricing

Can the buying market afford the price? How much discretionary income does the prospective buyers make? Can they afford the product? Where does your price stand with the competitors? If you're price is higher, is there value there to justify the difference? Value in the eyes of buyers, not yours. Pricing doesn't always make or break an opportunity, however, if it's the only opportunity it can cost the company existence.

6. Is this a one-time sales product?

Finding a product that generates revenue without any expenses is hard to find and needs top consideration. One- time sale products require more marketing and cost per sale is higher. For instance, a membership access fee to all available ebooks and updates would generate higher revenue and profit than selling individually because cost of sale is less. Another example: A website hosting company has higher marketing costs to get you as their subscriber. Afterwards there is little expense to keep you. They also have the pain of transferring to another host on their side.

7. What type of marketing system is the producer using for the product?

How is the producer supporting you in your marketing success? Some companies provide all the materials, some don't. Do you have to do all the marketing production? Do you have the skills, time, or patience to do it? If they don't provide it, how much is it going to cost you? A sizable profit margin can look great until you calculate in $5,000 for a generating the marketing material needed to sell. Be very clear on this one, it is a major downfall to many opportunities. Know exactly what you need and what it is going to cost you in time and money.

8. Are you going to do the pitching, the sales calls, and the follow-up?

Be realistic, do you have the time, the skills, patience, and courage to do all these parts? If you are short on time because of a full-time job, are you willing to give up your evening hours to follow-up on inquiries, do mailings, or make sales calls? What is your comfort level with sales? If not, what is training going to cost -- in time and money? Is it worth it then, or can you pass this up and find another product that is a better match?

9. What same category spin-offs products are available?

Can you find other similar products that build on this product? Once a customer buys one product from you and they are pleased, they will consider another in the same category. You can also double up and do 2 for 1 specials or promote with a "one free with the purchase of."

In Summary

Keep your eyes open, know your boundaries with the product and the marketing. Search for the unsaid costs, the ones the company doesn't want you to discover until after you purchased or made the initial investment. Take the time and talk with others selling the product that have no connected to the outcome of your decision.

© Copyright 2004, Catherine Franz. All rights reserved.

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About the Author

Catherine Franz, a Professional Marketing & Writing Coach, specializes in product development, Internet writing and marketing, nonfiction, and training. Newsletters and articles available at: blog:

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