Understandably, when you are brand new to eCommerce, you've got enough things to think about and learn. You are so unfamiliar with the notion of selling online, many things that seem apparent to people who have been doing eCommerce for awhile are not even considered by a newbie. You don't have the experience (and heartache) only gained through failure to guide you.
Keyword research is the foundation that practically every successful website business is built on. Get that wrong, and everything you do moving forward is almost guaranteed to be a waste of time. Before you even start researching keywords, it's important to know what to sell and what NOT to sell online. There are definitely some product types that always do well and others that are usually doomed for failure, no matter how great the search numbers look.
Before you start using a keyword research tool, you really need to use the most important tool of all - your brain. A little common sense goes a long way in this business! Knowing ahead of time what to sell online and what NOT to sell online might be even more important than knowing what the best keywords to target are.
What NOT to Sell Online
There are definitely some product types that you don't want to sell online. There are many reasons that a product niche can be very bad for online sales. In every case, it makes complete sense why you wouldn't want to sell these types of items. That is, once you are told why or you figure it out yourself the hard way. I'll go over them one by one:
Don't Sell Products that are Widely Available Locally
If someone can run down to the local WalMart, Home Depot or Bed, Bath & Beyond and pick up pretty much every product you sell, chances are, you will make very few online sales. You'll never be able to beat the Big Boys on price - at least in a way that leaves you meaningful profits.
People are impatient, too, and want what they have decided to buy the moment they have made the decision. Why would a customer wait for a product to be shipped to them when they can drive down the street, see the actual product and pick it up? You'll never be able to compete with the basic human urge of "I bought it; I want to use it now."
EXCEPTIONS: There are very few exceptions to this rule. If your niche involves products that are being sold to handicapped individuals who cannot easily shop for things locally, it might be a very good niche. Home grocery delivery, convalescent products and things bought by blind people, for instance.
Another exception would be if your products are extremely heavy or bulky (which we outline as a potential reason NOT to sell them, below). If someone does not have a truck or a means of getting an item home, they may prefer to buy it online. In this instance, more than anything, it depends on whether or not local stores have a delivery service available or not and whether or not your shipped price is better than the add-on price for delivery that a local store would charge (your price very well may be better because the local store is essentially having to pay to "ship" it twice - once to themselves and another time to deliver it to the customer).
The other exception may not be around for a whole lot longer but if you are selling very expensive items (which may not be a good idea - see below), the fact that online stores only have to charge sales tax to people within their own state gives them a pretty big advantage over local brick and mortar retailers. A 6% sales tax on a $100 product is $6 - a little annoying; a 6% sales tax on a $1,500 product is $90 - a MAJOR savings!
Of course, customers really aren't supposed to be saving anything on sales tax when they buy online because they are supposed to voluntarily pay it to their states, themselves, which is a whole other can of worms worthy of an entire article in and of itself. That's not your problem, though (yet).
Don't Sell "Emergency Need" Products
Unless there is absolutely no way to pick up a product within a 100 mile radius of where someone lives, selling emergency need products is never a good idea online. There are definitely some things that people can't wait several days for; they need it NOW!
This is why selling things like air conditioner parts or car engine parts rarely works online. Nobody is going to wait several days (or more) for an air conditioner component and suffer 90 degree heat; few people are going to be without their car for days while they wait for a part to arrive. In "emergency" situations, people will pay anything and travel considerable distances to get their problem solved immediately.
EXCEPTION: If there is absolutely no way at all for someone to get an "emergency" product locally, by all means, set up a website for it! Make sure you offer several different expedited shipping methods and use that as your selling point - not price. It's very rare that you can find a niche where price is the least important thing to a consumer. Of course, you better make sure that they are products that your supplier always has in stock!
Don't Sell Seasonal Products
Yes, you can definitely clean up by selling Halloween costumes because there aren't a whole lot of local places selling a heck of a lot of variety. Likewise, you can probably do very well selling handmade specialty Christmas ornaments. What do you do when that one to two month selling window is over, though?
Selling something that people only buy 10% of the year is rarely a good idea. You have monthly website expenses to pay for and it's pretty tough marketing a website just a couple months per year. Unless you are making a TON of money during your very short selling window, seasonal products simply aren't worth the time setting up a website and marketing.
EXCEPTIONS: If you have a website that sells specialty products for every single holiday season, by all means, go for it. The moment one holiday season is over, another one begins!
If you are selling a summer-only or winter-only product and are selling WORLDWIDE, summer in the northern hemisphere is winter in the southern hemisphere and vice-versa. From a global perspective, the grass really IS greener on the other side (of the equator)! There ARE problems selling worldwide, though, which I point out in the final section of this post - "Don't Sell Products Subject to Credit Card Fraud."
Finally, if you already have other websites that make you good money, you might have noticed that the summer and fall tend to be slow times of the year. People go on vacations and spend a lot of money during the summer so they either aren't around to shop online or they have no money left. We don't know what the problem with the fall is, but it probably has something to do with all the money they spent on vacations in the summer, combined with buying things for the new school year combined with having to save money for the biggest shopping season of all - the Christmas holidays. If you can find a niche that is summer-only or fall-only, the income earned can be a welcome relief during what is a "dead" time of year for most other websites.
Don't Sell Tactile or "Fine Eye" Products
One of the worst product types you can choose to sell online are ones that people like to touch or feel before they buy. If someone needs to feel how soft or sturdy something is before becoming convinced to buy it, words alone are usually not enough to convince those people.
Similarly, products that you need to examine closely before you decide to buy them aren't exactly conducive to online shopping. How many times have you seen an ad for a gemstone ring that looked great on TV or online but the ring was not nearly as impressive when you saw it in person at a store, either because it did not shimmer and shine like you thought it would, the color was not the same or it was much smaller than it looked on TV or your computer?
Then, there are products that fail on both counts. Products in the furniture niche always seem to have good search numbers but most online stores that sell any kind of furniture fail. Not only do people need to feel the fabric, they need to see how solidly pieces are built. People who do not have a decent grasp on dimensions simply cannot fathom the size of things until they see them in person. Not only that, but the texture or the color they thought they were going to get may not match what they see on their computer screens.
Bottom Line: If you DO manage to make a sale, count on getting an inordinate amount of returns!
EXCEPTIONS: Obviously, there are places selling furniture and jewelry online that are doing very well. Wayfair has built their entire empire around online furniture sales, after all, and their are numerous well-known jewelry chains that seem to do just fine online. They have many years and tons of marketing/branding under their belts along with stellar reputations and trust, though.
If you have truly unique pieces, you might very well carve out a niche for yourself with either one of these product types. The Big Boys don't specialize in unique jewelry or furniture and seldom have much, if any, selection to choose from.
Don't Sell Ultra Complicated Products
Although sometimes it can be a good thing to sell a complicated product online, there are some products that are so complicated, you can't even figure them out.
If there is no hope of you ever understanding how a product works, how will you be able to help customers when they have questions or problems with the products you offer? How will you be able to recommend one over another? How will you ever be able to convey online (or on the phone) that you know what you are talking about?
Even if you do know the product inside and out, if it is extremely difficult for a layman to understand, you could waste a ton of time trying to explain things and hand holding. Sometimes, all of the extra time spent on customer service isn't worth it!
EXCEPTION: There is most definitely an exception to this rule. If you are confident that you will ultimately be able to show people how your complicated products work and why one is better than another in a way that they can understand, it may be a golden opportunity to carve out your expertise in a niche. For that reason, complicated products are also listed in our What TO Sell Online article.
Don't Sell Very Expensive Products
The price point that you sell items for is definitely a major factor in how well it will sell as well as how much you can make. Although the profit per sale is generally higher on expensive products, there are definitely some drawbacks to selling high ticket items online!
Expensive products are almost never bought spur of the moment. The more a product costs, the more that price becomes the number one consideration and serious price shopping occurs. If the manufacturer does not have M.A.P. (minimum advertised price) in effect, cutthroat price slashing could occur and there will almost always be someone selling the product for a lower price.
Usually, the more expensive a product is, the less of a profit margin there is. While profit margins are the last thing I worry about, there is always a chance that a fraudulent order may get through. If you are selling a $2,000 item that only nets you a $120 profit, can you eat an $1,880 loss if someone buys it with a stolen credit card? If there are enough legitimate sales AND you set up a reserve just in case a fraudulent order gets through, no problem. Few people have the discipline to not spend the profits as they come in, though!
PLEASE NOTE: For all websites, we definitely recommend handing fraud detection over to the experts. We use a company called NoFraud on most of our websites, which gives orders a simple "Pass" or "Fail". They'll protect you and cover your losses on anything that gets a "Pass", but you're all on your own if you end up shipping something to a customer who got a "Fail". Click here to learn more about NoFraud.
If you are using pay per click advertising, expect your conversion rates to be extremely low on expensive items. You can also count on paying MUCH more for a click.
Finally, expensive products usually require a lot more customer hand holding before a sale is ever made and that extra time may not be worth it.
EXCEPTIONS: This really comes down to profit margins. If you have very expensive items AND good profit margins (20% or above), it may well be worth building a website around. You won't sell things as often, meaning very little time processing orders, and making $400 on a $2,000 sale is certainly worth answering a bunch of questions. Those huge profits also make pay per click advertising a no-brainer and you may never have to worry about ranking your website organically!
Once you've got a store or two under your belt and you know what you are doing and have solid anti-fraud measures in place, it's definitely worth exploring high end products in the $1,000 up to $5,000 range. Even just a 10% net profit on a $5,000 purchase is nothing to sneeze at and it leaves you all the room in the world to pay for advertising.
Don't Sell Cheap Products
Although inexpensive items certainly will be purchased by people without a whole lot of price comparison shopping going on, they, too, have their problems.
If very little money is made per sale, you certainly won't have any money left over to consider pay per click advertising. That means you will have to spend much more time link building and could wait a considerable amount of time before the website is getting organic traffic. Waiting 6 to 12 months for your first sale is not something most people have the patience for - especially if they only make a few bucks for that sale!
Also, your time is definitely worth money. If you only make $5.00 per sale and it takes you an average of fifteen minutes to process a sale (from acceptance, to ordering it from your supplier, to sending tracking information, to answering questions and resolving customer issues), is your time worth that? Sure, that's $20 per hour but if you only make two sales per day, that's only $300 per month. The website is going to cost money to maintain every month and you are certainly going to need to spend time getting it to rank well in the search engines.
EXCEPTIONS: One exception to this rule is only an "exception" if you don't differentiate between "profit per sale" and "profit per product sold." I have had several successful websites that had products with only a $4 gross profit. The average customer bought 10 of those products at a time, though, which means the average SALE was a $40 profit. You can most definitely make good money with a website selling cheap products if people buy a lot of them every time they order. That's how Dollar stores make all the money they do, after all (how many times have you ever walked out of a Dollar store with one item?).
If you are selling relatively cheap items and sourcing them from China where they only cost less than $7.00, shipped to your customer, and you sell them for $35-$40, that's a great margin (and an OK profit), which opens up advertising on Amazon (they only take 15-20% of the sale price as their commission) as well as Facebook marketing if you have the right type of product - something we discuss more in the Store Coach Academy.
Don't Sell Unreliable Products
Some products simply are not well made and result in a lot of returns. Returns cost you extra money in back and forth shipments. More important than the cost of shipping defective items and replacements back and forth is the cost to your reputation. It's hard to build up a loyal customer base when everything you sell them is junk. You can kiss referrals from those customers goodbye, as well!
I shouldn't have to say this, but absolutely do not sell knockoff products! Not only will it kill you as far as repeat and referral customers are concerned, but when you sell fake products, you are committing fraud and are setting yourself up for massive legal problems. When you are caught (and you WILL be caught), the financial ramifications will absolutely bankrupt you! Still need convincing? Check out the recent $144.2 million lawsuit Gucci recently won against online counterfeiters (ouch!).
EXCEPTIONS: Sorry, but when it comes to having reliable, genuine products, there is nothing more important than your reputation. There are no exceptions to this rule!
Don't Sell Products That Are Bulky or Extremely Heavy
Shipping is the hardest thing of all to get right with an eCommerce website; nothing will get tweaked more as you start receiving orders. Shipping heavy or oversize items just complicates things even more.
When you decide to go with a product that is extremely bulky or heavy, your shipping options become limited. You are forced to abandon all normal shipping channels like FedEx, UPS and the U.S. Postal Service and have to go with freight forwarding companies, instead. That can be a problem!
The cost difference between shipping to one part of the country versus another can be substantial and, because you cannot use any of the real time rate providers, you have to build the cost of shipping into the product or add it during checkout. If you build it into a product's price, you could lose a TON of money if the shipping destination is on the opposite side of the country. If the destination is very close, your price may be too high and you won't get the order. If you tack it on at the end using a table rate to approximate costs, customers get an unexpected "surprise" during checkout and you can absolutely count on extremely high bounce rates! Shipping large or heavy items worldwide? Good luck!
Unless a customer wants to pay considerably more for shipping, they will be required to either pick up their product at an area warehouse or they will only receive the product dropped off at the curb. It can cost more than $100 if they need the product transported into their home because they don't have any way of getting the item from the curb (or warehouse) into their home.
There are even more problems, though. If there is a problem with the product, arranging for that item to be picked up and transported back to you or the manufacturer can be extremely frustrating and ultra expensive. The shipping, alone, is often far more expensive than the profit you make on the sale!
Finally, although they may not have the exact same product that you offer on your website, if a local brick and mortar store sells something that is close enough, the extra cost of the product due to shipping can keep someone from buying that product from you regardless of whether you hide the shipping cost in with the product price (a.k.a. "free shipping") or not. While it is true that the local store has to pay to have the similar product shipped to them, because they buy more than one at a time, the per product freight cost is considerably lower!
EXCEPTIONS: If you are dropshipping heavy/oversized items and your supplier is taking care of arranging the shipping - especially if it is built into your cost already - you should be able to ignore this rule. Before you decide to ignore it, make absolutely sure that your supplier will cover the costs of shipping any returns and replacements to and from the customer for defective items.
Also, if you are killing it in profit (say $300-$500 per sale to most places after shipping) you can definitely afford to lose some money if you're built-in "free shipping" price is wrong for certain regions of the country. Keep in mind that of others are dropshipping heavy'bulky items, they've figured it out, so copy whatever they are doing, shippngwise,
Don't Sell Products With a High Turnover Rate
Although the first eCommerce website I ever set up was profitable, I would never get into that niche again. It sold NASCAR collectibles and, while there is certainly a high demand for those products, the turnover rate of merchandise is ridiculously high.
Every few months, all of the drivers would change their hats, shirts and even sponsors. It was impossible to keep up with. By the time I was finished changing all of the old products to the newest style, they were changing them again.
The best websites are ones that rarely have to change their products. Sure, you can add a new one here and there but if you are having to constantly upload new products and get rid of old ones, your products will never be online long enough to rank well. Besides, I guarantee you that you'll have far more important things to do than spend all of your time creating new product pages!
EXCEPTIONS: If you only sell a couple dozen products and they don't change more often than once a year, you can probably find the time to write new, unique product descriptions for each of them annually. The only way your products stand a chance of ranking well organically is with quality unique descriptions, after all.
If you are selling hundreds or even thousands of products, it's another story. The only way it would make sense to accept a high turnover rate on a large number of products is if the manufacturer supplies you with a feed that you can use on your website AND you don't care if your website ever ranks well organically. That means your profit needs to be pretty high - at least $50 or more dollars per sale - because you will have to get the vast majority of your new sales by paying for advertising!
Don't Sell Products Prone to Credit Card Fraud
Last, but not least, I should mention credit card fraud. Although with most websites, credit card fraud is pretty rare, some product niches are more prone to it than others.
Products that target teens are particularly vulnerable to credit card fraud. That's because some parents leave their credit cards in places where their juvenile delinquent children can get their hands on them. The kid places the order online, the parent knows nothing about the order, claims that they did not make the purchase and you get a chargeback as the result of stolen credit card information. Even if you provide proof of delivery, you might still lose the chargeback with some payment processors (like PayPal).
You should also be wary of selling small electronics or jewelry items. If you've ever seen someone selling products out of a van or the trunk of a car, those are the products that are most often bought fraudulently. The goal of the fraudster is to buy a bunch of something that can be moved quickly and those are the perfect products for that!
As long as I am on the subject of credit card fraud, I should also caution you to NOT sell products worldwide. Many countries are well known for the amount of credit card fraud that emanates from them online. In particular, I should warn you about selling to all of the Middle East, Africa, anything that used to be part of the Soviet Union, France, Germany, South America and all of Asia. Your "safe" countries would be the United States, United Kingdom, Republic of Ireland, Canada, Australia and New Zealand. Anything not on the list is a crap shoot.
Finally, there are definitely ways that you can lower your risk of taking orders made with stolen credit cards. Check out Anita Campbell's 10 Tips for Preventing Online Credit Card Fraud!
Don't Give Up Yet!
Yes, I admit it; this was a pretty negative article. There are certainly a lot of things to consider before you dive headfirst into a niche, no matter how great your keyword research looks. It's far better to know what not to sell online now than it is to find out much further down the road!
Finding a product to sell online is not all gloom and doom, though. While it's certainly important knowing what NOT to sell online, knowing what TO sell online is even better. Fortunately, that's the subject of another article - What TO Sell Online - Products That are Always a Hit!.