Market niches don’t exist for no reason, they are created after defining consumers’ needs and wishes which none the of competitors have managed to meet (or have met only partially). After that, the task of an entrepreneur is to offer a product or a service that will cover this demand. Even if a market share is small but profitable, it’s a solid reason to pay close attention to it and come up with some ecommerce business ideas.
The best guarantee of a future growth and a high income can be pretty easily explained: a company should take a special niche on the market, as this will eliminate the need to compete in price. Sometimes it’s more reasonable to have a dominant position in a small market segment than be in the top ten in a broad direction.
As an entrepreneur, you should be able to see unmet needs, market trends, and potential opportunities, regardless of the type of business you are doing. There is no magic formula that can guarantee you success in business. The most important thing is to have a good understanding of the chosen direction and, as the saying goes, keep your eyes wide open.
How to Find an Interesting Ecommerce Niche for Your Business?
There are many strategies you can use to get ahead of your competitors. They are often based on a simple principle – make a better offer at a more affordable price. But what should you do if you don’t know what to offer, as you still haven’t decided what you want to sell? You will probably be surprised when you realize that finding an ecommerce niche can be a more difficult task than, in fact, developing a business and competing with other market players.
To make the selection of a business niche more simple, use some tips that will help you to decide on your specialization.
Figure out what you are good at. No one can be professional in all spheres, but at the same time, each of us is an expert in a particular field. Moreover, it doesn’t necessarily have to be related to your main occupation. Indeed, working as a dentist in a clinic, on weekends you can make radio-controlled toys and in several years, become an expert in this field.
Thus, you can complete a list of all directions you are interested in, for instance, 10-20 positions, and then exclude them one by one until you get 2-3 options to be considered in more detail.
Go from bigger to smaller. After you define a general field of your interest, try to break it into specific components. For instance, if you want to sell digital devices, you can separate the following segments:
- Compact cameras.
- Semi-professional DSLR cameras.
- Full-frame cameras.
- Tripods, bags, filters and other accessories.
As you see, any of the aforementioned categories is quite self-sufficient. You can focus on one of them instead of splitting your efforts, time, and budget. And what is the most important, having done a successful online store in one narrow ecommerce niche, you can gradually add new sections to an existing product catalog.
Make sure that you want and can become an expert. Maybe you are already proficient in the chosen field and have some experience. Are you ready to continue studying and work hard to become a leader in your sphere? Be honest with yourself in this respect, as you cannot be first in any niche if you only do something well. You must strive to do it better than anyone else.
You are going to solve problems of people, answer questions, and face new challenges. If you liked something as a hobby, it will not necessarily preserve its attractiveness after turning into your main occupation.
Criteria for Choosing an Ecommerce Niche
Every entrepreneur needs a target market to work on. And to make the right choice, you have to define beforehand some criteria that your ideal niche must meet.
However, you shouldn’t necessarily be able to tick each of these demands. This is rather something unreal. But the more criteria from the list below your ecommerce niche will meet, the better chances of success you have.
A target audience and demand. The presence of a target audience is a characteristic feature that distinguishes a profitable business from a problematic one. Ecommerce niches are profitable because entrepreneurs working in them have a precise and clear target audience. You can offer great products and high-quality services, but spectacularly bankrupt if there is no one to buy them.
Your market segment is big enough. There are some niches where you can count market players on the fingers of one hand. This doesn’t necessarily mean that you have found a topic with no competition, and now you can go to a bank and open an account for saving a future profit. The problem may be that this market segment just doesn’t need a lot of sellers.
Hence, a business niche you have chosen must be big enough to allow you to get a good profit from the very start, not in the vague future when you may become a market leader. Potential sales should be sufficient to justify an investment.
Growth potential. Answer the following question: “Does the chosen niche have a growth potential or has it reached saturation and there is a risk of stagnation? If a niche has a potential for growth and development, your future business receives the same opportunities.
An average check. This is an unobvious but important thing. The understanding of it will help you to get a fresh look at some issues. It is logical that the case when you sell two products and earn $200 is much more preferable than earning the same $200 by selling two dozens of products, as more items take more time. If you have a chance to choose between these two options, obviously, opt for the one with a higher average check.
A short transaction cycle. Ideally, it should not exceed two weeks from the moment you process an order up to receiving the payment for it. Even if you choose a high-margin business, but will have to wait for your payment for months, you can easily run out of money despite you have sold all products in stock.
An opportunity for repeat sales. Or, in order words, you must ponder whether the chosen business niche allows to develop a base of loyal customers over time. It’s much easier and more profitable to earn on repeat sales than every time spend time and a marketing budget on attracting new customers.
Personal interest. Best things to sell online are the ones you like. Probably all of us have some interests and hobbies that we are ready to do absolutely for free just because we want it. And now, simply take a piece of paper, list such interests, and thoroughly think: maybe one of these options will become a basis for your future business? Personal interest is extremely important as it creates the motivation to act and the desire to become a real expert in a specific field.
A growing trend. Many promising markets are constantly developing which allows some lucky entrepreneurs to fit with their product/service in a growing trend. In this case, within a short period of time, they can achieve a success that many businessmen in other markets can only dream about. If you want to offer customers what they want, Google Trends will perfectly help you with that.
No strict seasonality. There some wonderful and exciting kinds of business such as selling Christmas gifts, ski equipment, designer mittens, etc. The single problem is that these businesses, unfortunately, can bring profit only in winter, moreover, during one-two months. If you don’t want to have a side job at a local diner for the rest of year, it’s better to refuse from such ideas.
A saleable product. It’s great if you have found a free niche with good demand and have enough resources to launch a business in this market. But will you have enough competence and arguments to convince potential customers and get a sales flow going? If you doubt, you’d better think how to test your abilities of a salesperson on the cheap, not to place a bet on everything you have, and eventually, be left with nothing.
As you see, the factors worth of your attention are quite numerous. And each of them can play a crucial role in the establishment and successful development of your business.
How to Decide What to Sell Online?
In fact, there are no big differences between an online store and any other business, despite the one – everything takes place on the Internet. This has some advantages, such as the absence of geographical barriers and the need to spend money on rent, yet it also creates a set of challenges. For instance, you will have to work to attract buyers from the very beginning, instead of opening a store in a crowded place, as you can do it offline.
All the aforementioned tips will be applicable only if you are building an ecommerce business. But remember to pay special attention to the potential of demand. Read more about this in our article on quick marketing analysis.
In addition, view a post “15 Important Criteria of Selecting Products for Online Store”, which also will be very useful for starting an ecommerce site. I am sure that these materials will help you while you are in search of ideas, allow to exclude unnecessary things, and avoid a lot of mistakes.
What We Have In the End?
There is no point in writing here about a possible secret of a successful business because it just doesn’t exist. But wait, it does! Yet for any practicing entrepreneur, it isn’t a secret at all, as they know that a real key to success comprises constant work, searching new ways for development, and dedication to what you are doing.
Most frequently, failures are caused by self-reliance, focusing on one’s own opinion, and lack of professional knowledge in the chosen field. Therefore, to find your niche in business, first of all, pay attention to these things.