How to Recognize Game-Changing Product Opportunities
E-commerce is subject to the “80/20” rule: more than 80% of the revenue will come from less than 20% of the product offerings. And even among the 20%, there is likely to be disproportionate impact from a few winners.
One of the beauties of e-commerce is that you get daily, valuable sales feedback. Winning and losing products are apparent long before they would be in traditional marketing--and with fractions of the dollar risks.
You have the opportunity to “chase the winners” but the absolute key is to execute a plan and to do it quickly. You also want to spread the word about your winners in order to attract the products you most want to handle.
Here's how to “chase the winners.”
RosettaBooks had its first major opportunity in December 2009, about one year into its informal alliance with Kindle, when we signed the worldwide English-language digital rights to The 7 Habits of Highly Effective People by Stephen R. Covey.
The 25-year-old book in its print editions sold more than 15 million copies and with over 150,000 copies sold annually, it is one of the most successful backlist business books in any publishing catalog.
We knew this was an opportunity that required quick action. Our e-book edition of 7 Habits made international news. Over a two-year period, digital unit sales began to rival print unit sales, which remained stable. 7 Habits became a merchandising staple at Kindle--and the title emerged as the number one title in our catalog.
We had a similar experience in 2011, when we expanded our five-title Kurt Vonnegut collection to 18 titles.
These titles--among a catalog of more than 500 titles--are transformative, and made us a leading competitor to sign the best available titles remaining for e-book licensing.
To ride the wave, you have to spot it.
Not all good opportunities are the same. To become a small company that performs in a big way, you have to “ride the wave.” How do you “spot the wave”? Often it is not hard.
You are looking for an opportunity to market something through e-commerce that is already very valuable in another medium. Even when something or someone unknown breaks through, the opportunity is probably to align rather than the “lottery chance” of creating the phenomenon to begin with.
- What is trending in e-commerce in your field?
- How can you become part of it? What are you already offering that can become part of the digital marketplace?
- Where is there opportunity for crossover--introducing to a new market something that is common to yours?
Try and sign the broadest possible rights in the most exclusive way possible. At that point, approach the biggest channels of distribution. The existing channels of distribution will match you with their millions of buyers. Later, you can take on the challenge of finding your own.