To Evaluate Your Product Over the Long Term, You Must Understand How Demand is Constantly Changing.
The term, "Trend of Demand," refers to changes which are occurring in the total sales of the product. The trend of demand will either be climbing, level, or descending. Even if the product you are reviewing has no direct competition, it will probably still fall into a category or similar product line that is presently being sold. The evaluator is then able to use the similar product line as a rough gauge by which to measure the trend of demand. Be objective!
If your product will depend on one or more other products, be sure to check out the trend of demand for the products on which your product will depend. For example, if you're selling a new type of camper shell for small pickup trucks which has a built-in roof rack to carry small boats, but the overall sales of small trucks and/or small boats is decreasing, Look Out. You should keep your investment limited or "pass" on the whole deal.
Even though your product is new, and you'll be able to sell quite a few to owners of existing small trucks, you must be aware that unless the demand for small trucks goes up, you can expect to be selling in a declining market. You can still make money in this type of situation, but only if the payback period will be VERY short.
On the other hand, if your product is linked to a product for which there is a rapidly-growing market, your potential for profit increases dramatically. However, keep in mind that in order to capitalize on a rapidly-expanding market, you must be able to capitalize the venture sufficiently to supply the growing demand.
If you're an individual, or have a small company with low overhead, and a product which requires only a minimal investment to get to market, you may be able to justify producing a product that caters to a market segment that is level or descending and still make enough profit to make the venture worthwhile. I have several clients with products that generate profits of five thousand dollars to seven thousand dollars each and every month. Since they are selling in zero-growth markets, they're unlikely to experience a drop in monthly income because they're the sole suppliers of products that have a small but steady demand. My clients who are running these businesses are doing it from their home base. They were able to quit their jobs, spend more time with their families, and thrive happily on the profit from these products even though the same income opportunity would not interest large companies.
You can get information on trends from the "Statistical Abstract of the United States," which can be found in your local library. Your local research librarian should be able to help you. Give the library a call!
The above article was taken from James F. Riordan's classic book, HOW TO EVALUATE THE POTENTIAL FOR SUCCESS OF A NEW PRODUCT OR TECHNOLOGY. Riordan's highly-acclaimed, 36-point system is a valuable tool for inventors, product evaluators or anyone interested in the invention process. Each section is followed by a comprehensive questionnaire that can be used to evaluate your product.
The highly-recommended book can be ordered through the Dream Merchant, 2309 Torrance Blvd., Suite 104, Torrance, CA 90501. The phone number is (310) 328-1925.
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