Posted November 28, 2025  |   Updated December 2, 2025  |     |   

Header Text - Product Research, Get Things Right Before You Launch Your Store

When planning to start an online store, the first decision you’ll make is what to sell. Many people make the mistake of choosing products based on gut feelings or social media trends, and struggle to start. That’s why doing product research first is so important. By selecting products based on valid information, you reduce risks, save time, and increase your chances of earning money. Here, we show you why product research matters, the different types you should do, and how to do them. We’ll also introduce you to the tools to get you started and show how using a Website Builder can make launching a small business easier.

KEY TAKEAWAYS

  • Effective product research provides evidence-based choices rather than relying on guesswork.
  • A balanced mix of market and product-based research provides the clearest picture of what to sell and how to sell it.
  • A systematic step-by-step product research process allows you to filter various ideas down to the one viable product ready for launch.
  • The right tools speed up your product research and provide sales data you can trust.
  • After doing product research, Hosted.com®’s Website Builder helps you turn that information into an online store that converts.

Why You Need Product Research for Your Online Store

The truth is, the “build it and they will come” approach hardly ever works in online sales (if at all); simply having a great product isn’t enough, you need to do your homework. You could have the most beautifully designed website and the most engaging content, but if you’re selling the incorrect product, to the wrong target audience, at the wrong time, you’re bound to fail.

Doing product research is your starting point rather than going in blind. When you take the time to research your ideas, you discover whether there is a market gap, what the competition levels are, the costs involved, and what potential customers really want. That translates to less wasted stock and listings, more profits, and faster growth for your online business.

Here’s what doing some proper product research provides:

  • A clear understanding of customer needs and market trends, so you can choose high-demand items that people want and are looking for, instead of guessing.
  • An awareness of the competitive landscape means you’ll know if others are offering similar products and how you can stand out.
  • What your sourcing, shipping, and return costs will be upfront, with no nasty surprises later on when it comes to costs and profit margins.
  • An actual solution for your customers’ pain points and preferences, increasing conversions, loyalty, and repeat purchases.
Strip Banner Text - Doing research first helps make sure you have a viable product

Product Research Methods

When it comes to research methods, you need to combine two approaches: market-based and product-based. Both work together to help you find the valuable insights you need and make the correct product decisions when launching a new product.

While something may seem like a successful idea on the surface, it doesn’t mean it is. For example, if market analysis indicates high demand, but the costs are too high or logistics are too complicated, the odds are it won’t be right for you.

Market-Based

This type focuses on product-market fit in a broader context and serves as the starting point before getting into the finer details. The goal here is to ensure there is a gap in the market and that your product strategy is viable, in demand, and unique before taking the next steps.

Here are some basics of market research:

  • Competitive analysis involves looking into what others in the same space are offering, their pricing, and their strategies. This also reveals market saturation, existing products, and identifies gaps to give you an advantage.
  • Market trend analysis tracks emerging technology, changes in customer behavior, and growth rates. The goal is to identify current trends, seasonal spikes, and long-term product lifecycles.
  • If you have the means, invest in surveys and focus groups that provide direct user feedback on your customer demographics, pain points, and buying habits, to reveal the market size and the most potentially profitable segments.

To quote personal brand consultant Dakota Robertson, in a Forbes article, “All content and offers boil down to one thing: relevance. If your offerings aren’t relevant to your target audience, they will be ignored. Market research removes the guesswork and connects you directly with what your audience wants.”

Product-Based

Once you have an idea of how you can fit into your chosen market and launch a potentially profitable product, you can be more specific. This research does what it says on the label; it focuses on the specific item and how people interact with it, to ensure it meets customers’ needs and is actually viable.

This includes:

  • The exact item you will be selling, along with the product features, size, packaging, and any variations.
  • Development, sourcing, shipping and fulfilment costs.
  • The profit margin that you can realistically achieve and your break-even point.
  • Any logistical or regulatory issues to avoid, for example, heavyweight items, perishables, or copyright infringement.

A Step-by-Step Guide to the Product Research Process

Successful product research is a process that starts with a broad understanding of the market and narrows down to the specifics that best suit your niche. By following these steps, you’ll be able to gather all the necessary data before creating your product and launching your online store.

Step 1: Define Niche & Target Audience

Start by defining the niche you wish to enter and identifying your target audience. Keep in mind that roughly 34% of new businesses and startups flop due to a poor product-market fit.

Then, consider what you want to learn from your research. This could involve improving an existing product, discovering new market opportunities, or refining features to improve the user experience.

Step 2: Identify Demand

Following from Step 1, be aware that 42% of startups fail because they create products nobody needs or wants. Utilize tools and platforms to collect data on search volumes and trend analysis, and research marketplaces, to discover whether your niche is growing, steady, or declining.

For instance, is interest increasing? Are there seasonal peaks? What are people searching for? Doing this can help you get a clear picture of whether there’s a healthy market size.

Step 3: Competitor Analysis

Look at the existing sellers in your niche: see how many listings they have, check their price points, reviews, and how their best-selling products are ranked and rated. A niche filled with many low-competition listings could be a great opportunity if you focus on offering something better with a solid marketing strategy.

On the other hand, if top sellers dominate the market, it may be a bit more challenging to enter and stand out.

Step 4: Evaluate Product Specifics

Here, take a closer look at your product development process, including sourcing costs (manufacturing, wholesale, and dropshipping), as well as shipping, packaging, and return rates. Set your target retail price and desired profit margin. Ensure you check whether you can make a healthy profit, ideally around 30-40% after expenses, but don’t price yourself out of the market. Don’t forget to include the size and weight for logistics, as well as durability and any potential regulatory requirements.

NOTE:

If you are selling digital products, most of the above costs won’t be a factor, as all you really need is the equipment (computer, software, marketing tools).

Step 5: Concept Testing

Before going all-in, test your idea thoroughly first. This involves prototyping and then moving to a Minimum Viable Product (MVP). It is essential to have an MVP, as this can result in a 91% better success rate with 67% less cost and a launch that is four times faster.

From there, you can consider setting up a “Coming Soon” landing page, running a little ad campaign, creating a small batch of inventory, or offering pre-orders or free trials.

Pay attention to how customers respond. Gather user feedback and use it to improve your product by adding new features or offerings, improving the customer experience. Taking this step helps you avoid the risk of failure when you launch for real.

Step 6: Final Prep & Launch

Once you’ve decided on your main product(s), ensure everything works, and you have a viable, profitable product. Now you can prepare to go to market.

Set up accounts with your suppliers to order your initial stock, finalize your costs and logistics, and set your pricing strategy. From there, prepare your listing (if using marketplaces), product description copy, images and videos, and any related content, such as blogs, guides or tutorials for your online store. Then you’re ready to launch.

According to the Product Management Study conducted by the Harvard Business Review, “Businesses that actively leverage ongoing market research can reduce product failure rates by up to 42%, making it a crucial investment for companies of any size.“

Strip Banner Text - Use tools to monitor trends, demand, and validate new ideas

Top Product Research Tools

To make your product research easier and more data-driven, a range of tools is available that help you spot trends, analyze competitors, find better sourcing information, and more.

Here are some of the top options to consider:

Hotjar: Provides real user behavior analytics for your online store, including heatmaps, recordings, and surveys, which can help confirm interest and show you what potential customers are searching for and leaning towards before investing in new product development.

Productboard: A product management and customer insight platform used to understand customer needs, validate product ideas, and prioritize features based on real user feedback.

Zendesk: Customer support insights can be a valuable channel for product research and development. Zendesk helps you identify recurring pain points and issues, offering a clearer view of different product gaps, areas for improvement, and demand for new features.

Sell The Trend: A leading dropshipping research tool combining AI (Artificial Intelligence) analytics with Shopify store tracking, trend detection and supplier insights. It is great for helping find viral and high-conversion products.

Google Trends: This free tool offers real-time search interest updates, making it one of the most popular choices for checking whether your product ideas are gaining momentum or declining in popularity across global or local markets.

Similarweb: This platform provides valuable insights into traffic sources, user behavior, and popular categories. It’s an excellent tool for understanding market demand and your competitors’ strategies.

PureSpectrum: Our market research platform provides quick, high-quality consumer survey data. It’s a helpful resource to confirm your product’s appeal, pricing, messaging, and buyer intent before launch.

It’s also worth mentioning that AI data tools are no longer just for analysis; they are also used to:

  1. Synthesize Qualitative Data: Automatically summarizing interview transcripts, organizing themes, and categorizing large amounts of text feedback helps make the qualitative analysis phase much quicker and more manageable.
  2. Predict Behavior: Using predictive modeling to help product teams anticipate important results such as upcoming sales, market share for new ideas, or customer retention rates. This approach offers actionable insights that can guide decision-making.
  3. Automate Insights: Automatically highlight important data points, like major sentiment shifts in customer feedback, and pinpoint specific problem areas.

This is highlighted in the 2024 The State of AI blog by McKinsey & Company: “Adopting advanced technologies such as AI and machine learning can lead to increased market fit by up to 50% and a reduction in time-to-market by up to 40%.“

When selecting the right product research tools, consider your business model, whether you are stocking inventory, dropshipping, or using a print-on-demand service. This will help you focus on the type of data that matters most to your business.

Next, your choice should fit your budget. If you are starting and want to keep costs low, many of them offer free versions, with options to upgrade for premium features. You can also use Google Trends and social search for free.

It’s also best practice to use a combination, for example, one for trend data, another for analyzing competitors, and a third for checking sourcing costs, to get a complete picture.

Finally, remember to cross-check and validate your information with different sources. While automation is helpful, even the best tools can’t replace your own critical thinking, hands-on research, and intuition.

Building an Online Store with Hosted.com®

You’ve done the research, found the winning products and are ready to bring your online business to life. The Hosted.com® Website Builder provides you with all the tools and features to get your store up and running quickly, easily, and affordably.

The builder offers over 200 professionally designed, mobile-responsive templates you can use for ecommerce or online stores. These templates come pre-loaded with essential pages like a shopping cart, checkout, and product galleries.

Use the drag-and-drop editor to change colors, fonts, and layouts to match your brand’s aesthetic. From there, upload high-quality images, copy and paste product descriptions and choose from a range of ecommerce tools and plugins.

A store can’t function without money changing hands. The Website Builder simplifies things with popular payment processing and gateway integration, including PayPal, Stripe, and more, to securely accept credit cards and other forms of payment directly on your site.

As an add-on to our cPanel Web Hosting plans, you get an environment optimized for ecommerce with fast loading speeds, 99.9% uptime, a free SSL certificate and all the essential security features built in. Our plans are designed to be scalable, not only to handle traffic spikes but also to grow with your business.

By using the correct platform, you ensure that your effort in product research is not undermined by poor site performance or a difficult user experience. With Hosted.com®, you get the reliability and support to focus on what you do best.

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FAQS

How long should I spend on product research?

There’s no fixed amount of time, but aim for at least a few days of deep research before committing. Rushing increases risk.

Can I skip product research if I already have a niche?

No, even in a niche you already know, research helps refine product selection, pricing, and understanding of the competition.

What’s a good margin for selling products online?

A good profit margin is usually around 30-40% after all costs (product, shipping, fees, marketing), though this varies by niche and the product type.

What’s the biggest mistake people make when doing product research?

Many people focus solely on trends, rather than considering long-term demand, competition levels, and profit margins. This can lead to investing in products with short lifespans or poor profitability.

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