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Imagine this: You come up with a new product idea and you think “This is great, it would solve problems so many problems!”
You begin drawing up sketches, doing manufacturer research, and brainstorming catchy names for your brand new product.
But wait… you don’t even know if this is something that has any market viability. What if you end up spending a bunch of time and money building this product, and there just aren’t enough buyers to make it worthwhile?
That’s why it’s so important for entrepreneurs to do a product market viability analysis before diving head-first into a new venture.
In this article, we’ll break down the concepts of market and product viability to help you understand what you should be looking for before launching that exciting new product.
What is market viability?
Market viability refers to the likelihood that a product, service, or business model will be successful and profitable in a specific market.
It’s a measure of how well the product is likely to perform, based on factors such as:
- Size of the market
- Customer demand
- Competitive landscape
- Market trends
- Company’s capabilities to deliver and support the product or service
Ignoring market viability is like starting a road trip without a map — you may be going places, but not necessarily in the right direction.
Not adequately assessing market viability can lead to failed product launches, financial losses, and wasted resources.
What is product viability?
Product viability refers to the likelihood that a product will succeed in the marketplace, providing a return on investment.
Evaluating product viability means assessing key factors including customer feedback, scalability potential, and how well the product holds up during rigorous testing. To determine product viability you need to ask questions like:
- Does your product fill a void or need in the marketplace?
- Can it be mass-produced without compromising quality?
- Will customers complete repeat purchases?
- Will customers refer it to others?
A viable product is one that not only solves a problem but meets a need, maintains its quality as production scales, and is better than the competition,
Why market viability is an essential part of launching a new product
Understanding market viability before launching a product or establishing a presence in a new region allows you to make informed decisions, take calculated risks, and notice things that others might miss.
According to Clayton Christensen, a professor at Harvard Business School, approximately 30,000 products are launched each year and 95% of them fail. As a business owner, you obviously don’t want to be part of that statistic.
If you’ve done your research and determined that the market in which you want to sell is underserved, then your product has a chance of being successful.
On the other hand, if you set up shop in an oversaturated market and no one ends up buying your product, it leaves you in a sticky situation. At this point, you’ll have lost:
- The time it took to create the new product
- The initial inventory investment
- Funds required to store the inventory in a warehouse
- Any marketing expenses associated with promoting the product
- Brand reputation if the product is perceived as a failure in the market
Performing market viability research offers insight into what your market needs, who your competitors are and what they offer, and how your potential customers are likely to respond to your product.
8 key factors that contribute to product viability
Launching a new product can be nerve-wracking. In order to alleviate some of the stress, you should do proper planning and research to know how the market will react.
When you know what influences the success or failure of a product, you can plan accordingly and increase your chances of launching a successful one.
1. Market demand
The single most important factor that will determine product viability is market demand. If there’s no demand for your product, you’re setting yourself up for failure.
There are certain high demand products that always seem to have a ready market such as clothing, skincare, and shoes. These products often capitalise on widespread, consistent needs or emerging trends. However, being in a high-demand sector doesn’t guarantee success since trends may fade or the market is oversaturated.
Customer feedback and market research are invaluable in understanding the demand for your product because they identify problems, needs, and desires that your product can solve. The stronger the need for your solution, the higher its potential viability.
2. Competitive advantage
Understanding the competitive landscape is what will equip you with the insights needed to differentiate your business from others.
By knowing what’s already out there you can identify your unique selling proposition (USP). This could be superior design, unique features, better pricing, or exceptional customer service.
Take a look not only at what your competitors are offering but also what your competitors’ customers are saying. Read through the reviews and find the things that people wish the product had.
For example, take the review below for a salad spinner from Amazon. The customer was unhappy with the flimsiness of the product. If there were enough reviews saying the same thing, there might be a place in the market for someone to create a spinner that’s of higher quality, solidifying a competitive advantage.
3. Product-market fit
Having a great product isn’t enough in the online retail world. You need to ensure that your product actually answers a problem that people are facing in the market you’re selling to.
Bathing suits in Antarctica don’t make sense just as winter coats in the desert don’t, right?
So, keep your fingers on the pulse of your customers, get to know their pains and frustrations like your own, and make sure your product fits their specific needs.
You. may want to start small but as your brand grows, scalability will likely be a priority.
Can your production processes and supply chains handle growth?
You want to be able to turn the dial up when things are going well, and not implode because you’re ill-prepared for success.
On the other hand, what if your product just isn’t scalable? There’s such a thing as launching a product that is too niche where only a small subset of people are interested in purchasing.
Doing your research will mitigate running into this issue. You can do things such as:
- Analising the amount of traffic your product’s keyword receives
- Checking Google Trends
- Evaluating Cost per Click (CPC) on Google Ads
- Analising audience sizes in social media platforms such as Meta and TikTok
This one’s a no-brainer. Your product needs to make money.
You need to do some math and figure out your profit margin after all of your COGS and marketing-related expenses.
Cash is the oxygen of your business. Without it, your business can’t function, let alone grow. So always keep an eye on your unit economics. If your target audience isn’t willing to pay the price you need to charge, your product’s viability might be compromised.
6. Market trends
Trends come and go. But if your product can catch the upswing of a new trend then you’ve got a serious advantage.
But let’s not forget, being trendy isn’t just about hopping on the latest bandwagon. It’s about having the ability to understand which trends are relevant to your customers, and which ones align with your product’s value proposition.
Also, consider the flip side. If a trend fades or changes direction, could that leave your product high and dry? Take fidget spinners, for example.
Don’t just ride the wave, understand it. Be adaptable. Stay ahead of the curve, but never lose sight of your core value proposition.
7. Pricing strategy
Your pricing is not just a number — it’s a tool.
If you price too low, you’ll undermine your perceived value; too high, you might price yourself out of the market.
So, do your homework. Understand your customer’s willingness to pay, consider your costs, check out how the competition is presenting their pricing, and then craft a pricing strategy that works for your business.
8. Product quality and reliability
At the end of the day, your product has to deliver the goods.
Quality and reliability aren’t just about the product’s features or design—they’re about the customer’s experience. If your product falls short, it won’t matter how well you’ve done everything else.
Shoppers have limitless options at their fingertips; one bad experience can lead them to switch brands.
So, before launching a new product you have to vigorously test it yourself and refine the product development process. Does it do what you plan to claim it does? Can it withstand repeated use? Can it survive in different environments or situations that your customers might put it through?
Your reputation, and by extension, your product’s viability, is directly tied to the quality and reliability of your product.
Potential challenges and risks with product viability
Product viability is a complex and ongoing process that’s as much art as it is science. As you push toward determining whether a market is viable, it’s essential to understand the potential challenges that could undermine your efforts.
Just as you wouldn’t open a pizza place on a street that’s already filled with pizzerias, you also need to be wary of launching a product in a saturated market.
An overcrowded market could make it tough for your product to stand out, no matter how innovative or high-quality it is.
When there are so many similar products in a market, marketing (Google PPC, for example) and production costs may likely be more higher.
Evolving customer needs
Customers’ needs, preferences, and behaviours are always evolving. So, if you’re not keeping up, you’re falling behind. Remember, your product has to solve a problem for your customer, and if that problem changes or disappears, so does the need for your solution.
It’s wise to stay in the loop and adapt your products, if necessary.
Competition is tough. There’s always someone looking to build a better product. Plus, the barrier to entry into ecommerce is already relatively low.
If you’re introducing a product into a market that already has a strong retailer, you’ll face various obstacles. A bigger company with more resources could enter your market and steal market share. They might have a bigger budget, a larger marketing team, or the ability to undercut your pricing.
Supply chain disruptions
The supply chain landscape can be unpredictable. If you don’t have a reliable manufacturer or shipping provider you could end up with delayed orders, product shortages, or, in the worst case, no product at all.
Nothing can kill a product faster than the inability to deliver it. It’s important to work with reliable partners (and even diversify your network of manufacturers) so you know that you’ll receive your products so they can be sent out to customers.
A framework to test the viability of your product before launch
Whether you’re running a startup or a large-scale ecommerce brand, before going full steam ahead with a product launch, you need to validate its viability.
Here’s a four-step framework to ensure your product hits the mark and resonates with your target audience.
Step 1: Prototype testing with target users
The first step is to get your prototype or minimum viable product (MVP) in front of target users. Observe their interactions, their reactions, and their hesitations. This will give you insights into how your product is perceived, what’s working, and what’s not.
Step 2: Iterate and refine the product
Now, armed with your users’ feedback, it’s time to go back to the drawing board. This is where you iterate and refine your product based on those insights. Do users find a particular feature confusing or complicated? Make it more intuitive. Were they disappointed with the materials of the product? Source new ones.
This step might involve several rounds of iterations but it’s all part of creating a product that truly meets users’ needs.
Step 3: Conduct beta testing with a limited audience
Once you’re confident that your product has significantly improved, it’s time to conduct a beta test. This involves releasing your product to a limited audience and closely monitoring their usage, feedback, and potential issues that arise.
Beta testing is your final reality check — it’s where you get to see your product in action, in the hands of real users.
ShipBob customer Hero Cosmetics did just that. They introduced their first SKU on Amazon to see how potential customers would receive the product.
We launched our first product, the Mighty Patch Original, on Amazon in September 2017.
It was a brand new product on the market and we wanted to do some testing to see if it had traction. The marketplace is great for testing; the customers are there, the fulfilment is fast, and the reviews are a goldmine for feedback.
We sold out of our initial inventory very quickly, which blew us away. The desire for this sort of unique and very effective acne treatment seemed pent up. People couldn’t get enough, and frankly we were struggling to keep up with the demand.”Dwight Lee, Co-Founder and COO at Hero Cosmetics
Step 4: Evaluate key metrics
Throughout step 3 and beyond, you need to be measuring key metrics. This includes customer acquisition cost (CAC) — how much does it cost you to acquire a new customer? You also need to look at your conversion rate — how many visitors are turning into customers? And, of course, customer satisfaction — how happy are users with your product?
These metrics give you an objective evaluation of your product’s performance and offer insights on where to focus your improvement efforts.
Examples of successful products that demonstrate strong viability
When trying to determine whether your next product has strong market viability it’s always a good idea to look at real-world examples from companies who got it right.
Earthley, a natural health wellness brand, started with just one SKU and now offers dozens of products ranging from herbal remedies to organic skincare. Earthley’s story first began as a blog sharing how to make natural remedies at home. Through its success, eventually reaching 500,000 unique monthly readers, visitors began asking if they could just purchase their remedies directly.
Through their blog, Earthley was able to validate their products and build up a loyal fanbase of customers before they even started selling anything. Now, they’re shipping out 30,000 orders per month and growing.
Hero Cosmetics is a skincare company that uses hydrocolloid bandages to treat acne. When they first started the business, the use of hydrocolloids in the US wasn’t new — but the idea to use them for acne treatment was.
Skincare is a massive industry and Hero saw an opportunity to offer acne sufferers an alternative treatment in a niche worth over $21 billion in 2023 alone. Thanks to the success of their first product, Hero began to grow and now offers an expanded, yet targeted, number of products that all speak to their target demographic.
How ShipBob can help you scale your ecommerce product growth
Once you’ve determined your product is viable and you’re ready to scale, it’s critical to ensure your logistics keep pace. This is where ShipBob can help.
ShipBob takes on the complexities of order fulfilment and shipping, letting you focus on your marketing strategy and serving your customers.
The worst thing for any brand is to spend vast amounts of money and time to find a viable product and then be slowed down by logistics once things start to pick up.
ShipBob’s warehouse network of over 50 facilities worldwide and advanced fulfilment technology ensure every order is processed and delivered efficiently. By integrating seamlessly with major ecommerce platforms, your brand has real-time visibility into inventory, orders, and shipments.
Market viability FAQs
Below are answers to the most common questions about product market viability.
How can I stay updated on market viability in my industry?
To stay updated on market viability, listen to your customers’ feedback, attend industry trade shows, and monitor competitors. Remember, market viability is not static, and neither should be your understanding of it.
How can I improve market viability for my product?
Improving market viability involves honing in on your target customers, differentiating your product, and optimising your pricing. While you must ensure your marketing targets the right people, you also need to show customers how your product is different. Whether that be design, functionality, or pricing.
What is the difference between market viability and market feasibility?
Market feasibility is about whether a market exists for your product, while market viability is about the sustainability and profitability of your product in that market. Feasibility is a preliminary step; viability is about long-term success.
How can I determine the target market for my product?
Identifying your target market involves understanding who needs or wants your product, who is willing to pay for it, and why. Market research, customer surveys, and competitive analysis can help in defining your target market.
What are some effective strategies for entering a competitive market?
Successful strategies for entering a competitive market include differentiating your product, focusing on superior customer service, building up your brand equity, or competing on price points. The best strategy depends on your product and the specific dynamics of your market.