Do Ecommerce Niches Really Lead To Riches? How To Identify Overlooked Product Opportunities To Increase Revenue
Do Ecommerce Niches Really Lead To Riches? How To Identify Overlooked Product Opportunities To Increase Revenue
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According to Similarweb, Amazon.com gets around 2 billion visits a month and eBay gets about 1 billion visits a month.
These two sites dominate the ecommerce landscape in many countries around the world.
According to PipeCandy, by 2017 around 2-3 million ecommerce companies were operating around the world (excluding China) and approximately 1.3 million operating in the US and Canada.
That’s a lot of companies vying for the user’s hard spent dollar.
With some recent tweaks to Google’s algorithm we have seen their traffic and keyword counts rise steadily over the last year or so. The big guys continue to push the little guys out of the search results. Google is continually tweaking how their search results look as they get ready for the mobile-first world and try and maximize their ad revenue.
(visibility data via Sistrix)
So if you want to start an ecommerce business, what do you need to do?
What can you do that won’t get lost amidst the big players and the smaller players that have been around for years?
The answer? Enter the niche market.
You need to find profitable niche areas that others have failed to capitalize on or choose not to focus on. There are plenty of opportunities out there if you know where to look and how to go about building a niche online store.
Ecommerce entrepreneurs face many challenges, especially when it comes to growing your customer base and attracting new potential buyers. But, the best niche ecommerce stores have found nooks and crannies to fit in where they can attract super loyal customers to their store, without spending a ton on advertising. If you have a product that can be served to a niche, it may be worth it to push it.
What is an Ecommerce Niche?
An ecommerce niche is a distinct segment within any given market and often an area that is overlooked by other businesses. Examples of niches include handmade items, pet food or pet owners, trendy t-shirts, eco-friendly products, beauty products, gadgets, or other trending products. By narrowing down how you look at a market, you are able to find areas and sections that haven’t been tapped into.
When you find these niches you can build a business that has a good chance of succeeding — you aren’t necessarily going to be going up against the big boys, and you can find and profit from the areas that others have neglected.
5 Benefits of Finding a Niche For Your Online Business
So what are the benefits of finding a niche that others haven’t capitalized on?
As with any business, you need to do your due diligence and make sure that you are going to be able to make a profit from it.
Here are some of the best reasons to start selling in a niche market.
1. Lower costs of advertising.
Since you have a smaller amount of people that would be interested in your product, you don’t need to try to advertise to everyone. I would always recommend that you start with Google Adwords, but you may find that there are other paid advertising opportunities depending on what niche product you are selling. Both Facebook and Pinterest are good alternatives and (depending on the product) you won’t have to spend a lot of money to achieve a great ROI.
2. Attract a more loyal customer base.
Anything from vegan dog chews to hemp backpacks have loyal customer bases, especially since they’re niche. It’s often the more specific and niche a company/product is, the more loyal customers will be to buying from them exclusively.
Plus, from a marketing perspective, you can easily partner with influencers who serve the niche you are targeting. This helps drive traffic to your online store, while adding authenticity and credibility to the specific product you are marketing.
3. Stand out in your category.
Niche products tend to be specific and can be different than most standard products within a category.
Not only will your potential customers know this when they come across it — they are more likely to tell others about your product. Being different and standing out can help impact old fashioned word-of-mouth and customers sharing your products on social media platforms.
4. Be part of successful trends.
Trends rise and fall, but some can carry on into the mainstream.
If your niche product follows along the wave of a trend, it could attract a lot of potential customers.
It is essential here to make sure that your niche product is part of a trend that has an upwards trajectory.
5. Higher-priced inventory.
Since niche products aren’t usually mass-produced, they tend to be limited and will cost more. This means that you can be a higher-cost option for some. People are willing to pay that little bit more for products that they can’t generally get their hands on and when they can rest assured their receiving a high-quality ecommerce product.
5 Best Examples of Niche Products
So what are some examples of excellent niche products and what makes them so good? They need to fit with an emerging trend and often are an improvement to a traditional product category. Here are a few examples that will get your mind thinking about both niche ideas and product ideas.
1. Beard oil.
It’s not just for men, it’s for men with beards.
Beard oil is a classic example of something that wasn’t particularly popular 5 years ago and has continued to grow year over year since. Understandably it peaks around the holiday season when people are looking for the perfect gift for their bearded loved one.
Those that got in on this trend early will definitely have profited and will have a website that has more trust in Google to those who found the niche later.
Old Spice Barber Shop offers hair and beard products for men. Beard Oil is offered as an individual product or as part of the Smooth Kit. The product description also gives customers more insight as to why the product is so essential to their beard care routine.
2. CBD for pets.
CBD is a niche itself, making it for pets could be a super-niche.
I am particularly fond of a niche within a niche. CBD has been particularly popular in the last year or so — but how many people do you think are promoting and selling CBD for pets? Significantly less!
If you can pick a niche that allows you to drill down further if it starts to become popular, then you are building an online niche business that has the potential to outlast the competition.
Think to the future all the time.
Imbue Botanicals offers various CBD products, but the one that stands out? Their K9 Comfort-Plus for dogs. They also carry CBD products for cats and horses.
3. Vegan cosmetics and makeup.
Vegan cosmetics and makeup are a classic example of a secondary niche that already exists within a more significant niche that wouldn’t be worth creating a new product, site or business around.
In the image from Google Trends below, you can see how this one has been a bit of a slow burner, and it also highlights how important it is to do your research — “vegan makeup” looks like it might where you further your research over “vegan cosmetics.”
Aurum Rose focuses on clean beauty, including incredible vegan based cosmetic products. Their website makes it easy for customers to explore different types of cosmetics and learn more about the ingredients used to create them.
4. Lots of subscription boxes.
Subscription boxes came on the rise a few years ago, they offer everything from organic feminine care to different monthly teas.
The beauty of this type of niche product is that because they are subscription based, you can get your customers into six months of yearly deals, and that creates recurring revenue for your business.
One tip I have here is to not neglect your current subscribers when you are trying to find new ones. It is much harder to find new customers than it is to retain your current ones. In the image below, you can see how important it is to research different potential areas within this kind of niche.
BigCommerce merchant, Beer Cartel, offers a great beer subscription service to its customer base. With an option to choose between a monthly box or an expert box – which each have their own array of more options – customers can find a box that works for their lifestyle and interests.
5. Handmade jewelry.
Handmade jewelry is a classic niche but if you look at the Google Trends chart below you can see that it has remained steady for some time now. This is where you need to dig further and concentrate on specific items like bracelets or statement necklaces.
Set yourself apart from the competition by narrowing your focus. This is also the perfect chance to research on sites like Etsy for inspiration.
Dogeared Jewelry is a prime example of a successful handmade jewelry brand. Dogeared offers more than just handmade necklaces, bracelets, earrings and rings. To make it easy for shoppers, they also include ‘Gifts’ and ‘Sale’ sections in their main navigation.
5 Strategies for Finding Your Niche
So how do you go about finding your niche? You don’t want to find yourself staring at a brick wall, you need to have some tactics up your sleeve so that you can get started quickly.
1. Look at current trends.
You can notice trends anywhere or use Google Trends to see when people have been searching for something. In addition to Google Trends, some of the places I like to look for upcoming nor new niche opportunities are in tools like Semrush and Sistrix. Coupled with Google Trends data, this gives you some compelling data to act on.
2. Find a need.
There are a few reasons people would buy a niche product. They either can’t get it close to them, or the current alternatives aren’t good enough.
Selling products in an area where there is less competition can be the key to success for your small business.
There is a well-known phrase that says “necessity is the mother of invention” and it couldn’t be more accurate than it is here.
3. Look at things you’re passionate about.
It’s hard to run any business on something you don’t care about, so see if there is anything in your life that may be missing a niche product.
Being passionate about something arms you with the knowledge that your competitors (if there are even any at all) don’t have. It allows you to create better content around the products and also better longtail content for blog posts and the other content that Google likes to see on a site.
4. See what others are searching for.
Keyword research can help out with this. Others may be searching “dog food without meat” or “vegan dog food” but competition on that keyword could be very low, meaning there is a chance their needs aren’t being fulfilled. While the Google Keyword Planner tool can be helpful here, you will need an Adwords account to get the best data. But don’t worry there are alternatives.
Keyword Keg is excellent for this kind of research and provides additional data that you don’t get in Keyword Planner. One particularly helpful metric is CTR Scope, this gives you an indication on how likely a user is to click on an organic result over a paid result.
At the end of the day, paying attention to search engine optimization (SEO) keyword terms can give you impactful insights that will help you find the right niche to sell in.
5. Scan through the category.
Sometimes just looking through a product category shows what is missing.
I like to dig through some of the more prominent sites like eBay, Amazon, and Etsy to see what is already out there and what is missing.
It’s easy to focus on the best-selling products, but, if you are passionate about the niche that you are looking into, you will find that you’re able to spot gaps much easier.
2 Ways to Find Customers For Your Niche
So now you know what an ecommerce niche is and you know the strategies for finding the best ecommerce niche you need to make sure that you know where your customers are. Where are they talking to people with similar interests? Where do they hang out online?
Luckily there are several approaches that you can take here to locate your potential customers and people that can become your brand advocates – even if it is on a small scale.
1. Find social media groups that have an interest.
Content marketing on social media will go a long way for your niche ecommerce business.
If you have been smart enough to base your online store around something that you are passionate about then this becomes less about work and more about play. You may want to start with the obvious, find hashtags to follow on Twitter and follow people with bios that mention your niche. Followerwonk is an excellent tool for this.
Facebook has millions of Groups, and there is bound to be some that are relevant to your niche product. As with any social based activity you need to make sure that you are offering value to the group and not just spamming them with your product.
Billing itself as the front page of the Internet, Reddit is another excellent place to look for people who could form part of your customer base. According to Similarweb, Reddit receives around 1.5 billion visitors a month — that’s more than the New York Times.
It may sound a little daunting when you know that there are over a million different subreddits, but it has a great search function to help you find the groups that are related to your niche ecommerce business. There are also tools like Redditsearch.io that can help you uncover these subreddits.
One word of warning though. Reddit groups are notoriously against self-promotion, so it is always wise to check the rules and guidelines of each subreddit you join up to (each and everyone is slightly different).
After you have looked at the obvious you need to dig a little deeper, there are hundreds of niche social networks out there that could help you find potential customers and brand advocates. Here is a giant list of 60 to get you started.
Did you know that there are specific cat and dog social networks? They could be perfect for you to find customers for your CBD for pets business. Advanced search operators in Google can help you locate these smaller and lesser known social communities, join up and participate, let people know that your niche product exists.
2. Search for shared interest within groups and forums.
Forums are often forgotten about when trying to locate potential customers for your niche ecommerce business, people think that they are stuck in the past.
The truth is that they often have very loyal and active member base to this day. A few email exchanges with the moderators to explain who you are can be enough for you to be able to start interacting.
As long as you are not overly self-promotional they can be a great way to get the word out about your product and often send a steady stream of referral traffic to your website.
You may also want to try Display Advertising on these forums – for minimal cost you can have your product in front of your target audience on the sites they often visit daily. While a slow burner this can be an excellent tactic for bringing a steady stream of visitors to your site.
Dropshipping Can Help
Dropshipping can really help your niche ecommerce business take off.
There are many advantages — it minimizes risk, it can help you lower your cost and boost profits and offers convenience for you.
Drop shipping is about outsourcing one of the most costly and inconvenient parts of your niche business.
Many ecommerce niches lend themselves to dropshipping, from wireless devices to clothing and fashion but how do you go about setting that up?
1. Find the niche need.
Before you even consider dropshipping as an option, you need to make sure that you know the needs of your niche and that you can meet them with your niche ecommerce business. Only then will you be able to track down the companies that can provide you with the dropshipping services that you need.
2. See if a supplier exists for that need.
If you can’t find a general supplier, you may need to get in specialist to order specific units for your niche product. Don’t be worried about approaching as many as you can find — you need to get the best price for the highest ROI.
Business owners need to make sure they find quality suppliers as well. It cannot be stated enough that the quality of the suppliers is crucial to the success of your business. These can be local, or they can be online — gather up as many as you can and do your due diligence.
3. Search around niche competitors.
See if anyone else is selling what you could dropship, even if they are it may be from a different supplier. You will need to carry out some simple market research around their best products — how they source and sell them.
You need to be able to make sure that you are going to be able to make a profit. The research doesn’t have to be detailed, you need to be able to make a decision pretty swiftly so that you are not investing too much time early on in the products you can make a profit on.
4. Offer supplier’s products on your site or a marketplace.
Choose whether to dropship on your own site or on a marketplace. Marketplaces can be very attractive when you start out — there is a minimal upfront cost, but you need to think carefully. If your profit margins are tight, the fees that they charge could leave you with not much profit for a lot of work.
The other option is that you sell via your own website to avoid the ongoing fees. This may mean that you have to invest a little more time and money upfront. Luckily there are many options for building a site yourself on a budget – BigCommerce is an excellent example of this. If you don’t have lots of products at the start you can set up a site yourself in a day or two – and you don’t need to be a developer to do so.
Starting from Scratch: How to Manufacture Your Niche Product
So you have done the research, and you know what niche you are going to work in. You know that it is trending upwards and that you can expand the niche further in the future. You know there are customers out there, and you know where they hang out online.
You have decided on whether to create a website or use a marketplace, and you have started to generate interest.
What comes next?
You need to get your product or products out there.
1. Survey the market for your niche.
It is likely that when you were doing your research that you may have come up with some ideas for products, but you need to make sure you survey the market again. Starting a niche ecommerce business doesn’t just happen overnight, and you need to make sure that there are no new emerging trends that you can jump on — or that interest hasn’t shifted away from where you were heading.
2. Come up with your great idea.
Okay, so it may seem like this has come a long way down the list — shouldn’t you have a great idea at the start?
Well, I would say not. It isn’t very often that ideas just appear out of nowhere. The combination of working in a niche that you love and spending the time to understand the potential customers and what they need is what leads to the best ideas.
Ideas that come out of in-depth research often turn out to be the best ones. Ideas that emerge from understanding your potential customer’s pain points often turn out to be the best ones.
You have to reject 99 bad or okay ideas to find that one idea that can really hit the spot.
Don’t just think products. Think about how you can add value to the niche that you have chosen. This is the key to success.
3. Create a prototype/design of it.
Before you go any further, you need to prototype your product. You need to know that whatever it is that you have created will work in the real world. You need a prototype to be able to solicit feedback and improve where necessary. You don’t want a substandard product entering the market because it will leave your business doomed to fail.
Don’t forget you don’t have to create the prototype yourself, you need to make sure that it is made by a professional and to a good standard. Your prototype is vital as the finished product.
4. Contact suppliers to make it.
If you have followed the process that has been set out in this article, then you should have a list of potential suppliers. Now is the time to get into contact with them. Don’t be afraid to haggle here. Getting your niche products produced at the very best price can be the make or break for some niche ecommerce businesses.
Be confident and don’t just accept the first offers that come your way. Be bold if you want to make the most money for your business.
5. Start building initial interest.
You can do this through social media or even crowdfunding campaigns. If you have already built up a small following on social media with the tactics mentioned earlier, then you are already going to have people that are wanting to see what it is that you have to sell.
If you created a website early on in your niche adventure, then you can add a holding page that hints and what your product might be or look like. You can also add an email capture form so that people can sign up to be the first to hear about it. This simple tactic can form part of any email marketing campaigns that you run in the future.
One of the most popular ways to drum up interest in the last few years has been with crowdfunding campaigns. The most popular site for this is Kickstarter, but there are plenty of niche crowdfunding sites out there. Patreon has become popular in the last few years for more creative work. There are even crowdfunding sites that concentrate on very niche projects like Crowdsupply that only has projects for computer hardware.
6. Release your product.
Now the time has come, and you need to release your product, and all the hard work that you have put in will come into play. Product releases need to be coordinated and well planned out schedule – from day one. You need to make sure that interest builds quickly and that you can spread the word via the channels that you have tapped into. Momentum is a powerful thing.
Set up waves, go after the opportunities that you identified as the most important in the first week, moving into the smaller ones later.
That’s niche ecommerce business in a nutshell. The competition out there might be fierce, and there are a lot of other companies trying to compete for the same business. If you are smart, then you can still make money with a niche ecommerce business.
You need to go niche.
Pick something you know and love and then use that knowledge to find an area that hasn’t been tapped into yet – or at least doesn’t have that much competition. Passion and knowledge are what makes a business tick. You may be looking to make money from your business but you need to love what you are doing at the same time.
When you are working on something you love then finding the places that your potential customers are participating in is not a chore, it’s something you will want to do – and you have the knowledge to help while still letting people know that your product, business, and website exist.
Do it for the love of the niche first and the money second.
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