Choosing what to sell: filtering products for demand, margin, shipping and return risk

In online selling, the product you choose quietly decides almost everything that follows: your margin after fees, your courier bill, how many parcels come back, and whether you will be fighting 300 other sellers on price. Many Indian sellers spend months on a logo and a website for a product that could never earn money once shipping and returns were paid for. This lesson gives you a filter you can run on any product idea in an afternoon, before you commit stock or cash.

What you need to know

Visible demand, not imagined demand. You need evidence that people already search for and buy the product online. Useful signals you can check for free: the auto-suggestions that appear when you type the product into the Amazon, Flipkart or Meesho search bar; the number of ratings on the top 10 listings (a rough proxy for sales volume over time); Google Trends for seasonality; and Google Keyword Planner ranges for search volume. One viral reel is not demand. Twenty competing listings each with hundreds of ratings is demand, though it also means competition.

The price band decides your per-order economics. Every online order carries fixed costs that do not shrink with price: forward shipping, packaging, payment or collection charges, and fixed marketplace fees. On a ₹199 item, these can swallow the whole margin; on a ₹1,200 item they are a manageable share. A common rule of thumb for a new seller is to prefer products where the selling price is at least three times the product cost, and where the product sells for a few hundred rupees or more, so that fixed per-order costs do not dominate. Very high-ticket items bring their own problems: higher COD refusal risk, more fraud attempts and buyers who want to touch the product first.

Shipping profile. Couriers bill on the higher of actual weight and volumetric weight. Volumetric weight in kg = length × breadth × height (in cm) ÷ a divisor that is commonly 5,000 on Indian courier rate cards (some use a different divisor, so check yours). A light but bulky cushion in a 40 × 40 × 15 cm carton is billed as 24,000 ÷ 5,000 = 4.8 kg even if it weighs 700 g. Also check fragility (glass, ceramics), liquids and aerosols (leak and restriction risk), and batteries or flammables (some couriers restrict them).

Return and RTO risk. Some categories invite returns by nature: apparel and footwear (size and fit), products where colour on screen differs from real life, and electronics with setup issues. Products bought on impulse through COD also see more refusals at the door (RTO, return to origin). You cannot avoid this entirely, but you should know which risk you are taking and price for it (lesson 03).

Competition and differentiation. Look at the first two pages of marketplace results. If every listing shows the same factory product with a different brand sticker, you are entering a price war. You need at least one real differentiator: a better material, a size or pack that others do not offer, a regional craft story, a specific use case (for example "for small Mumbai kitchens"), or a bundle that solves a complete need.

Repeat potential. Consumables (tea, spices, skincare, pet food, refills) can be bought again and again, which lowers the cost of each sale over time. One-time durables need a constant flow of new buyers. Neither is wrong, but your marketing budget and business model change completely.

Compliance load. Some categories need licences or certifications before you can legally sell: food needs FSSAI registration or licence; cosmetics have manufacturing or import requirements; many toys and a number of electrical and electronic goods fall under compulsory BIS certification; all pre-packaged goods need Legal Metrology declarations. Check the current requirement on the official portals (FSSAI's FoSCoS, CDSCO, BIS) before you shortlist, not after you have bought stock.

Supply reliability. Can you get the same quality again in 30 days? Check minimum order quantity (MOQ), lead time, whether the supplier gives a GST invoice, and whether a second supplier exists. A bestseller you cannot restock is a ranking you will lose.

Step-by-step method

1. Write down 15 to 20 product ideas that connect to an unfair advantage you already have: a family trade, a manufacturing cluster near you (Tiruppur knitwear, Moradabad brassware, Jaipur prints, Rajkot kitchenware), a community you understand, or a skill.
2. Strike out any idea with a licence or certification you cannot obtain within 60 days.
3. For each remaining idea, record demand evidence: number of ratings on the top five listings, typical price band, and whether Google Trends shows a steady line or a single festive spike.
4. Get a real product cost from at least two suppliers, excluding GST if you will be GST-registered and able to claim input tax credit.
5. Measure or estimate the packed dimensions and calculate volumetric weight for each idea.
6. Estimate a per-order cost for shipping, packaging and platform fees from a courier or marketplace rate card, and subtract it along with product cost from the likely selling price.
7. Rate return risk, competition, repeat potential and supply reliability from 1 (poor) to 5 (strong).
8. Score every idea on the scorecard below and rank them.
9. Order samples of your top three, photograph them, and show them to 10 potential buyers before placing any bulk order.

Common mistakes

• Choosing a product because you personally like it, without checking the number of ratings competitors already have.
• Calculating margin on actual weight and then discovering the courier bills volumetric weight at double the slab.
• Picking a ₹149–₹249 item and hoping volume will make up for fixed per-order costs that eat the entire margin.
• Entering a category where your listing will be identical to dozens of others, with no reason for a buyer to choose you except the lowest price.
• Placing a large MOQ order before testing samples with real buyers and real photographs.
• Discovering the BIS, FSSAI or labelling requirement after stock has arrived.

Ask the AI Business Tutor

• "I plan to sell [product] online in India at around ₹[price], with a product cost of ₹[cost] and a packed size of [L × B × H cm] weighing [weight]. My advantage is [advantage]. Score this idea on demand, per-order margin, shipping profile, return risk, competition, repeat potential, compliance and supply, show the volumetric weight calculation, and tell me the two biggest risks I should test before buying stock."