Stories of success in e-commerce are sexy. They usually sound something like this:
“A friend of mine started selling jewellery online. She quit her job and makes twice as much as she did working 70 hours a week before. She goes to the beach whenever she wants.”*
That friend found product-market fit. Not quite so sexy a story, but that’s the neat little equation that will define your success in e-commerce.
You need a product, and a market that wants to buy it. Simple, right? Well, yes.
Sure, you’ll need to develop or source your product. And you’ll need to setup your online shop. Then spend some time or money marketing your business. But all these steps are support structures for your product-market fit.
The mistake most of us make is creating a product then set about finding a market for it. The problem is you’re acting on your own assumptions. Due to a psychological tick known as confirmation bias, you’ll seek to affirm things you already believe, regardless of evidence to the contrary (if you’re interested in understanding confirmation bias in greater detail I recommend reading Dan Ariely’s Predictably Irrational and Dave M’s You Are Not So Smart – they’re both fun to read).
You invest in inventory, web development, rent, without any certainty that revenue will follow. This is a risky strategy, based on hope rather than any semblance of certainty. You’ve got no idea who will buy your product.
Broke ain’t sexy.
Knowledge is powerful (and profitable)
Reversing the product-first-market-second mentality above is the best place to start tipping the scales in your favour.
Look for a market and then find a product that fits that market.
It’s a simple shift, but one that has profound implications. You’ve shifted from your own assumptions to the needs of your customers. This is powerful. They win, you win.
By understanding your customers you’ll come to know who will buy your products. And, critically, whether there’s enough of them to justify those 2,000 Grumpy Cat t-shirts you were about to order.
Smart is sexy.
Check back fore the next part in this short, 3-part series. In part 2, I’ll look at techniques to find markets and in part 3, how to test your market. Check back here or enter your details in the field below and I’ll send an email with part 2 and 3 right to your inbox!
*I do have an acquaintance who’s story played out like this. I don’t know about her hours, income or how much time she spends at the beach, but she does make some truly lovely hand-made jewellery. She’s found product-market fit. Visit the 32.4 website to take a closer look.