How to choose an ecommerce niche

If the internet does one thing right, it’s niche marketing. No matter how weird or obscure your passion is, you can find other like-minded individuals somewhere on the planet thanks to the interconnected world-wide web. 

For ecommerce, that creates huge opportunities for targeting untapped markets. But if it’s such a good idea, why doesn’t everyone do it? Because choosing the right niche for your online store takes research, experimentation, planning, and a fundamental understanding of the niche consumers you’re catering to. 

In this article, we break down the basics for choosing your ecommerce niche. 

 

What Are You Personally Passionate About?

Think of a niche like a nation’s culture. If you grow up in America, you can understand American culture well. But take a trip to Japan, and you might have no clue what’s going on, no matter what you read about in books. 

Niche markets online are the same way. Unless you have a personal understanding of what niche shoppers want and need, their pain points and preferences, it will take decades before you understand how to sell to them. 

Avoid this problem by choosing a niche you yourself are passionate about, or at least understand. Then you can draw on personal experience to give your shoppers what they want. No one knows better than a gardener which gardening tools are best — and which aren’t worth buying. 

It also gives you an insider advantage for marketing if you know where the niche community “hangs out.” You can start advertising on certain sites you’re already familiar with, not to mention already knowing what kinds of publicity would be most effective for niche members. After all, you’re a member of the community too, so what incentivizes you to buy?

Not all of your passions are fit for ecommerce, though (but hopefully you have more than one passion to choose from). We recommend checking out ecommerce trend publications to see which niches are most fruitful for online stores. Here at Ecomdash we release a Top 10 list of the most trending ecommerce niches every year — you can see the best niches for 2020 here

 

Is Your Niche Market Profitable?

Of course, it takes more than passion to be successful in an ecommerce niche. Depending on the types of products, popularity, and attitudes of the community, some niches may not to be “healthy” enough to sustain a profitable business. 

For gauging popularity and competition, Google Trends is the perfect tool for finding your ecommerce niche. It can show you how many people search for topics in your niche, over time, and give suggestions on related queries to help inspire new ideas. Not only is it free to use, but it also gives you a head start on selecting SEO keywords for when you’re ready to start marketing. 

You also need to research the top products in your target niche: the standard prices and their demand. From here, you’ll have to do your own calculations to determine if you can get enough substantial sales to stay afloat. Again, personal knowledge of the niche community comes in handy here. 

You’ll also want to consider other factors, such as special shipping costs or prohibited materials. A lot of people like exotic animals, but there’s not much of a market for them online because no one wants to pay to ship a Capybara from Uruguay. 

 

Where Do You Source Products? 

Similarly, if the products for your niche are difficult or costly to acquire, you won’t turn a profit either. Locking down a supplier should be one of your earliest steps, especially so that you can more accurately estimate your costs to see if you can break even. 

If you’re an active member of your niche community, you should check the popular hubs and forums for advice on finding manufacturers or suppliers. Alternatively, you can start with a product you want to sell and follow its thread until you find its source. 

Some niches even encourage you to create your own products. Artisanal and homemade products are the backbones of niche-markets, so you might want to search for an actual craftsperson instead of a product. 

 

How Hard Is It to Break Into the Niche Market? 

Even if your niche is technically profitable, that doesn’t mean it’s profitable to you. You should always research the saturation of the market, and what strategies your competitors are using. Dog toys are a prime example — not everyone is a dog-owner, but that doesn’t stop millions of brands from targeting and oversaturating the dog toy niche. 

Before you move forward, make sure you have a firm Unique Selling Proposition (USP). A USP is what sets your brand apart from others, in other words, why should people buy from you instead of your competitors. The most successful USPs benefit the shopper, usually either lower prices or better quality goods. 

For niche markets, though, your USP can revolve around features, namely features that the niche community wants but other sellers don’t provide. For example, in the last decade, we saw a rise in kids books aimed at children of gay parents — this “feature” went largely unnoticed by book publishers who had little concept of what growing up with gay parents was like, but once a few pioneers proved the demand was high enough, suddenly lots of publishers were doing it. 

Once again, personal knowledge in your niche comes in handy. Is there anything you see largely lacking from other stores that you could provide instead? 

 

What Is a Micro-Niche?

Sometimes, the best way to get out of a hole is to dig down. If your niche market is too crowded, try making your niche more defined, which is to say, “narrow it down.” Too many people selling dog toys? Why not sell dog toys specifically for golden retrievers. Too many golden retriever toys, narrow it down more to toys for golden retriever puppies

This isn’t always fool-proof, though. The more you narrow down, the smaller the market gets, and presumably at some point there aren’t enough customers to keep you afloat. If you’re going the micro-niche route, you have to double-down on research to make sure you don’t head down a dead-end. If you already have a more general online store, you can test the waters slowly with a single product or two in the micro-niche — if they fail, it won’t sink your whole operation. 

 

Takeaway: The Power of Personalization

The truth is, there’s no such thing as normal and every market is a niche market in its own right. The smaller the niche, though, the stronger the personal connection it has to its members — what you call a niche market, the community calls an identity. 

With that in mind, you can see how personalization is crucial in ecommerce niche marketing. You want to show your customers that you understand them at every point in the shopping experience, from hand-picking your product range to personalizing their shipping. This may seem like a lot of extra effort, but the results are worth it — no customers are more loyal than those in niche markets! 

 

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Ecommerce Product Sourcing Strategies for Every Business Model
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Ecommerce Product Sourcing Strategies for Every Business Model

Product sourcing is where skill and talent come together for online retail. But like any other skill, you’ll perform better with proper training and instruction. Here, we cover the best and most practical advice on product sourcing for the 8 most common business models.

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