Online stores often ask us at Konigle, how to find winning products ? So what is a winning product and how to find one. Here's an example of a winning product from the S.E.A Aquarium in Singapore. But first let's explain what are the characteristics of a winning product.
What is a winning product ?
Across our 1000s of customers we have observed is that winning products are those that help online stores make real money. These products are also referred to as Hero Products by e-commerce merchants. As highlighted in this remarkable post that distills the essence of how to make money selling online, a winning product has :
Pricing power : You can charge a premium over competitors without losing out on sales.
High Conversion Rate : Winning products sell by themselves, people come and people buy.
Low Customer Acquisition Cost : It does not cost a lot to acquire customers for a winning product. It has a pull effect rather than a push effect, ie, you spend a lot less on performance marketing and marketing in general.
No dead stock : Winning products almost never have a dead stock problem. In fact, they suffer from the opposite problem of being out of stock.
High Average Order Value : A winning product usually has a high average order value driven by fear of missing out.
High Customer Life time value : A winning product is bought multiple times over and hence, an online store's hero product drives a high customer life time value.
Low Costs : As a winning product has high and predictable sales, an online store can drive costs down through economies of scale and ordering more.
The Cotton Candy at S.E.A Aquarium in Singapore
One such winning product is the Candy floss at the S.E.A Aquarium in Singapore.
This is no ordinary cotton candy. Why ?
Pricing Power : This glowing fluff of sugar sells for SGD 8 (USD 5.99) a piece. That is a lot of money for a cotton candy. A cotton candy retails for around USD 1 a piece. That's almost a 6 times premium that they can charge.
High Conversion Rate : The cotton candy is sold at the 'Deep Ocean Habitat' , where visitors sit and watch the miniature ocean. This is exhibit is situated bang in the middle of the aquarium. Hence, the cotton candy stall sees thousands of potential buyers primed to make a purchase.
Low Customer Acquisition Cost : In addition to having a captive audience, who essentially pay an entry fee to the S.E.A Aquarium for the opportunity to purchase glowing cotton candy, the cotton candy itself is a major draw. As it glows like a unicorn, it attracts the attention of young children in the audience, who then pester their parents to buy it. This makes it a pull product rather than a push product.
No dead stock: Going to the aquarium on a busy day can lead you to wait for minutes as the vendor would refill the cotton candy machine.
High Average order value: Being a product popular with young kids, parents of multiple kid families typically end up buying a cotton candy for all their kids, increasing the average order value.
High customer life time value: The glowing cotton candy never gets old, every time a family visits the aquarium they end up buying again.
Low Costs: According to our estimates, a cotton candy costs no more than 50 cents at scale helping the S.E.A Aquarium make an almost 1100% profit on each cotton candy sold.
The glowing cotton candy at the S.E.A Aquarium is a truly winning product. Hats off !