A new business or a new product is a matter of risks. It is quite difficult to evaluate them at the first stage. Many entrepreneurs prefer to move forward by intuition causing great risks. Even a slight mistake or wrong budget allocation can literally kill your business at the very beginning. This article will help you avoid fatal mistakes and evaluate strength of competitors and potential benefits, taking as an example the following case.
Google has captured every product and direction of our digital life. It is the search engine that ranks first in the world by its attendance. Google’s share is 79% of all search queries, and it is 4.464 billion a day! It is a huge array of data and great potential for new companies and start-ups in terms of growth.
At first stage of our test we will use Google Trends in order to evaluate and analyze whether your business will not only pay off, but also will allow you to earn lots of money.
I really like using Google Trends since it allows predicting goods popularity dynamics and its seasonal prevalence. And it’s free of charge! We do recommend it not only for beginners in business, but for other experienced market players as well.
1. Firstly, let’s open Google Trends
2. Then enter the search word that characterizes your product or service
3. Finally, let’s analyze the chart.
It is supposed that we sell drone in the USA. This product is well-known and understandable. That’s why it’s been chosen as an example.
Please draw your attention that drones popularity is going upscale. Over the past 2 years people have started buying drones even more often! What does it mean? It means that in the future number of buyers will grow significantly. This is visible at the chart that is depicting data for the last 5 years. It is highly beneficial niche that could bring you profit day after day.
Obviously, you have noticed that there are surges on the chart, when demand increases by 3-4 times! This is a Christmas time. It is the time when people are preparing gifts for their loved ones. So that, you can get top number of orders in November and December. However, I would recommend you to prepare for such increased demand in advance. At least 1-2 months beforehand.
Okay, now you could see that your niche is in high demand at the market. So how much will it cost to get an order and how many orders is it possible to have?
For more detailed information we will use Google Keyword Planner:
– Log in to Google Keyword Planner
– Go to «Search for new keywords using a phrase, website or category» section
– Enter your goods or service keywords. Then press “Get ideas”.
It is important to know that different options exists:
– There are phrases of high demand that provide you site with great traffic;
– There are phrases of low demand, but they will be highly productive in terms of orders received.
For example, the query “drone” will give a lot of traffic, but a few orders. At the same time, the phrase “drone buy” will give you much more orders. The highest conversion rate could be given by phrases that are related to price.
This diagram proves aforesaid assumption as to the Christmas. As it could be seen, in November, there is a growth of goods demand could be observed. Taking a look at the tables, please note that the phrase “drone” popularity is high, however, I would recommend concentrating on other phrases that are more conversional.
As it showed by statistics, it is possible to get more than 18 660 requests per month. Please note, that cost per click depends on the phrase. For example, “cheap drone” is of great interest. Setting CPC of $0.38 it is possible to get 14 800 views per month. Having an average CTR (the ratio of the number of requests to the number of clicks) about 5%, you could get 14,800 * 5% = 740 clicks to your site.
It is possible to have orders conversion of 5-7% by setting conversional landing page. It will result on 740*2%=15 orders. Total cost of 740 clicks at $0.38 would be $281. And one order cost fee would be $281 /15 = $18.7
*** I highly recommend using as many conversion requests as you can. Since sometimes some requests show better percentage of orders than others. This can only be determined on the basis of testing jointly in Google Adwords and Goolge Analytics.
During 8 years of my experience, I’ve seen niches where CTR could reach 17% and even more.
It is really perspective to open an online website for drones sale. Drones popularity is increasing every day. It could be seen from Google Trends. In order to get more accurate figures, I would recommend running contextual advertising for “cheap drone” request. The cost per click is low, while the conversion rate is high. In this case, your investments will pay off in case of correct adjustment of contextual advertising along with the landing page.
Orders quantity: 14 800
Site clicks number: 740
Number of orders: 15
Total costs: $281
Cost for an order: $18.7
Any niche or business could be checked using this scheme. Should you have any questions, please feel free to contact me. It would be my pleasure to give you a useful advice.