Simon Kolz

A weblog by Simon Kolz

How To Evaluate A Product Opportunity

Day after day my in box, and I’m sure yours as well, fills
with opportunity propaganda on how to make money. Do this,
and poof, you’re rich. Become an affiliate and sell my
ebook, and poof, you’re making lots of money. I don’t know
about you, but I can’t tell what’s a good opportunity and
what’s not any more. Because of this, I created a list of
nine criteria, a sort-of checklist, to use when I do find
something that I don’t think is full of “poof.”

1. Is the product any good — in my opinion, and in my

This is especially true for me. I’ve found that
informational fre*e products are nothing more than a tease.
I just get tired of wading through 150 pages to find four
pages that have anything “real.” In addition, if they
aren’t decently organized or written, less than 2 out of 25
reach this from the hundreds I’ve read, how different is the

Why would anyone want to pay $49 or $249 for the same thing
offered in a $20 book? E-books aren’t books. People don’t
buy them for the same reason. Even if the product isn’t an
informational product, what is different, unique, and
important enough for me to buy that I can’t buy somewhere
else for less? Are the solutions clear, or presented from
the producer’s viewpoint and give me a sale dance?

Some people don’t care and sell anything. Does this
producer fall into that category? If they do, it’s usually
apparent. I’ve asked website owners who sell outside
products about many confess they haven’t read or tried it,
and don’t care about its truthfulness or value, just the
revenue. I cringe when I get an e-mail that personally
promotes a teleseminar and then in the material it says,
“first time given.”

How does this build trust and credibility? Well, it
doesn’t. Smart people don’t return. The seller now incurs
the label of the producer. Please, please, please, if you
come across a poor product, ask for a refund. These people
are counting on you not having the courage or taking the
time to ask. If this would occur more frequently, the
marketplace would demand and receive higher quality.
Silence keeps poor products circulating. Vote with your

2. What is the market demand status for this product?

Where on the bell curve does demand fall? The bell curve, a
symmetrical curve for illustrating where a product stands in
the sales process, slowly rises for new products, reaches a
curved plateau, then spirals down, sometimes fast, sometimes
at the same grade of its rise, depending on the product and
economic market conditions. This holds true for physical or
information products wherever distributed.

How long has the product been in the marketplace? Is it
new, old, or been over exposed? This takes some research.
Caution though, if the original producer doesn’t answer your
question, that gives you the answer. What plans does the
producer have for future sales product? Is it being offered
to just anyone? Is he just starting? One strategy for
ebooks sales is to sell to early adaptors, then set up an
“everyone” affiliate program. What is their definition of

Is the opportunity going from retail product to Internet?
Some opportunities don’t work well with this conversion.
For instance, take Coke, it’s sold retail and won’t work on-
line. Website hosting and domain name is now an over sold
opportunity. Jumping in on this product is jumping in on a
plateau product that requires major pushing for production
if you want enough worthwhile revenue. Are you willing to
put enough effort into it (discussed later)?

3. Who Is The Producer?

Is the producer a stable company or new? The major reason
new businesses have difficulty selling is because people
take a wait and see stance. People prefer to buy from
successful people and companies. Statistics confirm that
85% of new business will not be around next year. People
want to buy from successful ventures, successful people,
people that have stability, tenure.

At this point, if I am unable to uncover any solid
information about the company, I don’t continue past this
point. Don’t have any hesitancy about emailing or calling
them with questions. Many times, I can’t even find a phone
number. No response, drop the opportunity and move on to

4. Revenue Generating Realty Check

Of course, the promo material will state the highest
projections and usually leave out negative particulars.
Ignore this, find, and calculate your own probabilities.
Since I have a heavy background in accounting, it’s easier
for me to do this. Not your area, then ask an accountant
for assistance, take a class, find a book, and learn this
calculation. The skill will serve you many ways in the

Remember to set your personal feelings aside when evaluating
an opportunity. It distorts the facts. Sell with emotions
but don’t make a decision to invest your precious resources
with it.

Calculate your break even point, what income you want, how
many sales equal that over what period, are three questions
that need an honest answer. E-books need 117,000 to 225,000
exposures to generate sizeable revenue. How are you going
to get that number? Yes, that number is possible.

5. Pricing

Can the buying market afford the price? How much
discretionary income does the prospective buyers make? Can
they afford the product? Where does your price stand with
the competitors? If you’re price is higher, is there value
there to justify the difference? Value in the eyes of
buyers, not yours. Pricing doesn’t always make or break an
opportunity, however, if it’s the only opportunity it can
cost the company existence.

6. Is this a one-time sales product?

Finding a product that generates revenue without any
expenses is hard to find and needs top consideration. One-
time sale products require more marketing and cost per sale
is higher. For instance, a membership access fee to all
available ebooks and updates would generate higher revenue
and profit than selling individually because cost of sale is
Another example: A website hosting company has higher
marketing costs to get you as their subscriber. Afterwards
there is little expense to keep you. They also have the
pain of transferring to another host on their side.

7. What type of marketing system is the producer using for
the product?

How is the producer supporting you in your marketing
success? Some companies provide all the materials, some
don’t. Do you have to do all the marketing production? Do
you have the skills, time, or patience to do it? If they
don’t provide it, how much is it going to cost you? A
sizable profit margin can look great until you calculate in
$5,000 for a generating the marketing material needed to
sell. Be very clear on this one, it is a major downfall to
many opportunities. Know exactly what you need and what it
is going to cost you in time and money.

8. Are you going to do the pitching, the sales calls, and
the follow-up?

Be realistic, do you have the time, the skills, patience,
and courage to do all these parts? If you are short on time
because of a full-time job, are you willing to give up your
evening hours to follow-up on inquiries, do mailings, or
make sales calls? What is your comfort level with sales?
If not, what is training going to cost — in time and money?
Is it worth it then, or can you pass this up and find
another product that is a better match?

9. What same category spin-offs products are available?

Can you find other similar products that build on this
product? Once a customer buys one product from you and they
are pleased, they will consider another in the same
category. You can also double up and do 2 for 1 specials or
promote with a “one free with the purchase of.”

In Summary

Keep your eyes open, know your boundaries with the product
and the marketing. Search for the unsaid costs, the ones
the company doesn’t want you to discover until after you
purchased or made the initial investment. Take the time and
with others selling the product that have no connected
to the outcome of your decision.

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