Do you mainly add products to round out your existing niche? Or do you look for products that are already selling which you think you could sell more successfully than the competition? Do buyers or suppliers suggest you sell certain products? Or are you driven by availability such as retail arbitrage or liquidation opportunities?
My product strategy is to look for items specifically in my niche and fit some general (but not hard ) criteria.
1. I like items that I can ship in smaller packages. The great majority of my items are 3oz or less.
2. I like to have items that are relatively inexpensive but either get lost or wear out. Think of razor blades as opposed to electric razors.
3. I like lines that have a lot of product depth - colors, size, or style. What I find is that retailers often only carry the top 5 of a 20 product line. I will carry a few of all the line. This has a great impact on long tail business because you can generally get a little more money for them and, more importantly, cannot be obtained locally most of the time.
4. Exclusive products. Products no one else can sell. This is rare unless I brand something myself.