December 9, 2016 by Andrew Minalto - 0 Comments

Why Should You Stay Away From 
BRAND Dominated Products?!

Welcome back!

Let’s talk about market research and specifically – the manual research part you do when Terapeak numbers have confirmed a potentially good product to sell on eBay.

Yes, you still need to do manual research on eBay before you make your final decision! You can’t just blindly follow Terapeak numbers. While sales data is super important, you need to carefully check at least the first page of search results on eBay to see what’s going on there, what the competition looks like etc. And with this research, you’ll often find a certain percentage of your listings is for branded items.

How do you know when it’s okay to compete with branded products and when you have to drop that product completely?

This is exactly what Ben asked in a recent email to me:

Hi Andrew,

You mentioned in the EAB course to stay clear if a product is dominated by a few brands.

But are you referring to the product brand or the company brand?

For example there is an automotive parts business that sells the three most popular air freshener brands (California scents, Jelly Belly, Little Tree’s).

Are you saying that it’s unwise to try and compete with these air freshener juggernauts by branding my own imported air freshener? Or are you saying that I should simply steer clear of niches that have a very uneven distribution of revenue?

Hope that makes sense!

Cheers, 

Ben

Thanks for your email & question Ben.

First of all, let’s define what I mean by branded product and brand domination.

Branded Products

These are products that are branded e.g. have a brand name/logo on the product itself and/or packaging. Essentially any product that has a logo on it could be classed as a branded product BUT my reference is little bit different.

I use this term to describe products that are made by well known brands, for example:

  • Samsung TVs
  • Gillette razors
  • Apple phones
  • Beats headphones
  • Netgear routers
  • etc.

Basically well known brands, many of which are household brands even a 3 year old child can recognise (trust me, I just tested this with my son! 🙂

So it’s not like every item with a logo on it is classed as a branded item. Well, technically they all are branded of course, but they are not well known brands. Many Chinese products selling on eBay and Amazon also have logos on them, but customers in general don’t recognise those items as premium brands.

Brand dominated Products

These by default will be branded products, using our previous definition, BUT with a twist – by Brand Dominated products I refer to products where there are very strong market leaders in that space. Brands that take the MAJORITY of the market share! 80+, 90+ sometimes even the whole 100%.

By that I mean – if you search for that product on say eBay or Amazon, you’ll only see those brand products being sold and nothing else.

This is very common in specific, high end markets like same LED televisions, medical devices, cars etc.

But not always.

There are products that are relatively simple, but are still for some reason dominated by just a few large corporations and brand names – like the same men’s razors market which is dominated by Gillette, Wilkinson Swords and BIC.

Mostly this is because of how old and established these companies are, their massive marketing budgets, traditions etc. Whatever it is – in these product categories the majority of people WANT to buy a BRANDED product and nothing else. They trust that brand and it would be very hard to convince them to buy something else.

For example – when I shop for a new TV, I would only look at Samsung, Sony and LG. I wouldn’t even consider some weird, little known Chinese brand.

Yes, of course, people who are looking for the cheapest possible option would still consider unknown brands when buying a TV but they will be the minority NOT majority.

What you need to do is THINK from the customer’s perspective! If you were the buyer for this item, HOW IMPORTANT would the brand be in your decision making process?

Ben uses car air fresheners in his email – I personally wouldn’t call this item/niche as brand dominated. Yes, there are some well known brands there but I don’t think that’s the biggest factor for the majority of buyers.

Other things are more important, like:

  • Scent
  • Shape
  • Price
  • Packaging
  • Uniqueness (extra-long scent life, unique way to use the item, natural scents etc.)

The product itself is so much more important than the fact that you may be aware of popular brands in this market. In fact, with items like car fresheners, even small, little known brands can actually make the item very attractive by just designing the product/packaging in an appealing way, maybe even targeting specific groups (natural scents I mentioned or say baby friendly scent formulas etc.).

Remember, I’m talking in general here – there are always exceptions and you should always use common sense when evaluating these situations. It could be that the item is brand dominated, yes, BUT you can offer a better product for HALF THE PRICE of the branded version. This would be a real selling point to customers and increase your chances of getting those sales in.

Think about compatible ink cartridges for example – in the past they were not that popular at all (I can’t even re-call them) but now – they are super popular and probably make more than genuine, branded cartridges – sales wise.

Because there was a HUGE problem with genuine cartridges – they were super expensive! In a case like this, offering a price that is several times cheaper seems very attractive to customers. And this movement of compatible inks and re-filled inks actually made manufacturers lower their prices for genuine cartridges too. As suddenly everyone realised that paying £25+ for an ink cartridge is way too much!

Ok, it turned it longer than I wanted but I hope I made my point here. If at all possible, stay away from brand dominated products UNLESS your product is very unique or much cheaper or carries some kind of particular SELLING POINT to your customers.

It’s much easier to compete in niches where customers are OPEN to trying out new products and new BRANDS, rather than trying to convince me that Takosh LED TV is as good as the latest Samsung! 🙂

As always, feel free to send in your questions via my support desk here and I will personally reply within 24 hours, Monday – Friday! Even though just one question is picked for the weekly Reader’s Question post, I still reply to ALL questions that are sent in.

Have an awesome weekend everyone!

Andrew

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