One of my best friends is starting up a franchise business in Xi’an, capital city of Shaanxi Province in China. He didn’t have a well paid job or a predictable career path. That’s why he quit and now tries something entrepreneurial. As there are so many options ahead, he seems having none to start with. Finally he picked one of the over crowded franchise opportunities in China, a seashell accessories business.
Why a business on accessories? He thinks the accessories business sells well which has low cost with high returns. He is right. Why seashell? He told me there are people selling seashell accessories. What a classical bandwagon effect! There are many people selling a product doesn’t necessarily mean there are many people demanding that product.
As my dear friend has made up his mind to start a business in accessories, how should he select the products properly? Here are five tips every small business can try:
- Ask the targeted customers what they like. If people don’t like it at all, why should they buy your products?
- Ask the targeted customers whether they are willing to pay for the products. Sometimes people like something but are not willing to buy. I like seashell accessories, but I won’t buy them. Either I or my girlfriend likes the seashell accessories.
- Watch the targeted customers. Stay in the popular accessories stores to check out what are the products people like.
- Follow the fashion. Unless your business is well set up with abundant budget, you may want to build your success on others’. E.g., South Korea drama is very popular among the young, and many businesses benefit from selling accessories worn by those South Korea stars shown in the drama.
- Test the market. Purchase certain amount of products to sell depending on your budget. Test the market by talking to people who are purchasing and those who are not.
What else in your mind?
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