How to do Market Research for Drop Shipping.
How to do Market Research for Drop Shipping.
In this post we're going to be talking about what you need to know and do to do market research on your drop shipping business. We're starting out with some general guidelines for how to navigate the world of researching your business, then will move into how to actually go about doing that research.
The first step in doing any type of market research is figuring out what type of information you need, which is often a mix between quantitative data (numbers) and qualitative data (your impressions).
Quantitative data can either be numbers that you can measure (i.e. prices, revenues, etc.) or percentages (i.e. how often people do something). The second type of quantitative data is much harder to come by and often requires surveys to get the information out of people (which we won't be covering in this post).
In terms of qualitative data, this is all your impressions that you gain from either talking to people or actually going to a place and watching how people interact with the stuff that you're interested in.
For example, you might want to sell shirts online and want to know whether selling $30 or $40 shirts is better – this will be quantitive data – so we'd look at sales records and sales volume.
But what about 'marketing'? Is selling shirts worth it? This will be your impressions – so I've got to set up a pitch for my potential customers and go and pitch them my shirts.
Once you've gotten all the pieces of quantitative and qualitative data, you can then put that into a grand spreadsheet to identify patterns and trends. There is no hard and fast rule for this, but it's usually just putting all the pieces of data together as one big spreadsheet.
The final step is to use all the data you've gathered and do a SWOT analysis. This will help you to figure out what your strengths and weaknesses are, as well as identifying your opportunities and threats.
As with everything we cover here on eCommerce Marketing, we're going to give you some simple tools that you can use – they're not official or perfect for all situations, but they will work just fine for most people.
To get started, we're going to need a few tools:
Google Alerts: This is a great tool that you can use to keep track of any and all information you might be interested in. You can set up keywords and Google will email you any time there is a new hit on your keyword in Google search results.
This can be incredibly powerful for monitoring changes in Google rankings, news stories, or even new market opportunities.
You can also use it to keep track of the changes in product prices, but you'll need to be careful doing that – Google can track the price on every page of your website, so you'll need to pick some sort of exclusivity so that people don't start figuring out how you've changed the price on all your pages.
Google Trends: This is an incredibly powerful tool that lets you see how many times your search term is being searched. You can also run multiple searches at once to see how often your terms are showing up on Google search results over time.
For example, you can do a search for "t-shirt dropshipping" and see how often it shows up – tracking this can help you to figure out the competition (what other people are doing) and to keep up with changes.
One of the biggest things that Google Trends lets you do is to track the seasonality of your keywords – this is extremely helpful if you're trying to determine how many orders you should expect each month; or even what your peak times of year will be.
Google Analytics: Google Analytics is the tool that you will be using to keep an eye on your visitors and what they're doing. This allows you to find out how people are finding you as well as how they're behaving once they get to your site.
This kind of data helps with making decisions by answering questions like "how many people came from Facebook ads?", "how many people came from organic search?", or even "what is my overall conversion rate?".
You can also use Google Analytics to find out what type of people are visiting your site – how old, what gender they are, their geographic location, and even their interests. This is incredibly powerful for figuring out what kind of traffic you're getting and how to modify your marketing strategies.
These are the big three that you'll need to keep an eye on your market research. We're not covering any fancy stuff like PPC (Pay Per Click) or SEO (Search Engine Optimization) here – this is just the basics. If you're interested, you should definitely do your own research into those tools.
In Conclusion
Market research is an important part of any business, and you should definitely make time to do it. It will set you up for success in the long run.
Using these tools, you can figure out what your competitors are doing, where new opportunities are popping up, and more. It's not perfect, but it'll work fine for many different eCommerce businesses and niches.
You don't have to spend a lot of money – just set these tools up and then let them work for you. It'll save you a ton of time and allow you to figure out how the market in different niches are doing.
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