Product Differentiation and the Pitfall of Viral Products
Lack of product differentiation through viral products gives “jumping on the bandwagon” a new layer of complexity for Amazon sellers.
Wanting to ride the coattails of viral products that are trending can sound like a great opportunity for quick sales, but the lack of product differentiation can put you at a major disadvantage.
To succeed on Amazon, you need to offer something unique within your product niche. Customers know that when they type in a search query, they are likely to get a plethora of products to choose from.
It is this range of choices that ultimately defeat viral products and their appeal, proving that product differentiation also means to avoid trendy items that are difficult to compete for and could stop selling in the blink of an eye.
Notable exceptions are to this rule include short-term products that have a particular end date in mind and seasonal products. The difference between these types of products and viral products is that they are much more predictable in terms of sales and demand.
The Viral Product Mentality
However, new and experienced seller alike can fall victim to the allure of selling products that have shown a jump in popularity or have “gone viral” among buyers.
Viral products refer to the concept that if Seller A is offering this kind of product and is raking in a lot of sales because of their perceived popularity, then you should start selling the same type of product too to capitalize on the product’s popularity.
There are several problems with selling viral products:
Unfortunately, being a copycat on Amazon for virally popular products is not an original idea, and you wouldn’t be the only one trying to capitalize on the opportunity.
An example of this situation is the fidget spinner craze between 2016-2018. When fidget spinners first became popular in the US and Europe, there were so many variations and businesses selling these simple toys that the number of choices was overwhelming.
When the market is flooded with everyone’s version of the same product, no one seller will make enough money to claim a substantial profit. The competition for something as viral and popular as fidget spinners were enormous during its heyday.
Just as it is with viral videos on the Internet, you will never know how long the popularity of a viral product will last. Going back to the fidget spinners, they suffered from the “everyone who wanted one got one, and now they are bored with them” situation that plagues many viral products.
Fidget spinners started losing their allure after the first year, and by then, people that wanted them had bought one already. With little to change about the product, the fidget spinner ran out of steam and interest in the toy dwindled.
Since you never know when viral products will lose their popularity, ordering inventory can become a guessing game. Every seller knows you must order enough inventory well ahead of time, so you don’t risk running out of stock.
However, what happens when you order new stock for a viral product, and then demand suddenly dries up? You are stuck with the inventory that no one wants to buy anymore. You will be lucky if you can sell off any remaining products at a deep discount to recoup some of your losses.
Limited Room for Improvement
Since most viral products will only ever have one iteration, they often will not leave much room for improvement or significant change. One of the basic tenants of product differentiation is to find ways to improve upon a competing product to make a better version of your own to sell.
In the case of the fidget spinners, their operation of spinning on ball bearings remained unchanged despite the many variations that were made available. No significant change was made to their operation or form, and so product differentiation for many of the sellers was purely aesthetic.
Product Differentiation Always Wins
While careful planning and quality can work for short-term products like in the case of Brock Johnson, viral products are unpredictable and overly competitive.
The difference between what Brock did and selling viral products like fidget spinners are the following:
- Saw the opportunity far before anyone else did
- Got his product out ahead of the event knowing the end date
- Established his reputation as one of the only sellers offering high-quality viewing glasses that would adequately shield eyes while watching the eclipse in August 2017
Product differentiation is critical to establishing your product in any niche, and viral products do not afford this calculated effort. You are better off sourcing a product that has consistent demand and can be predicted.