How to Find A Niche for Your New E-commerce Business
03/04/2020 | Share:
E-commerce has been around for a long time and many of the mundane, everyday products are sold by e-commerce stores that already exist. If you’re looking to get started in the e-commerce industry, you need to have your own niche (or at least your own angle!). Unfortunately, the chances of you becoming the next Jeff Bezos are very slim, so to start with, it’s important to have a more focussed approach to e-commerce. We recommend starting with something small and if things progress well, it may be that you want to expand.
Perform Research
The first step is the most important. You need to put some time into researching what the markets are like for potential products. If you’re starting from scratch, there’s no point in selling something that everyone sells. It’s a demand that is well met and full of competition. Remember, we’re starting small for a chance to penetrate the market.
On the other hand, you don’t want to pick a product so obscure that there’s no demand for it, otherwise you’ll make no income.
We recommend using Google Trends as part of your research to identify trends that are on the rise and exploit them whilst you can. You never know, you may become a national leader in that product, however crazy it is.
Another thing to check is seasonality. Does demand increase at certain times of the year and can you profit from it? There’s no point trying to sell Christmas decorations in April, as demand is low. But then deciding to get started in mid-December is likely too late.
Twist on a standard product
Your product doesn’t have to be obscure to be considered a niche product. You could take a standard product and sell from a different angle. For example, instead of just selling soap, you could sell a luxury, artisan soap that is vegan and has a low carbon footprint. This allows you to connect with multiple audiences. In this example, your product will appeal to people passionate about climate change, vegans and people who appreciate independent, unique businesses. As well as people who like to stay clean!
By giving your simple product more dimensions, it makes it more dynamic and really helps to find that demand/competition sweet spot.
Check out your competition
Whether you’ve decided on a niche or not yet, it’s important to look at what the competition is doing. What product are they offering, and can you make it better? If not, where can you improve on your competition? Perhaps they’re unable to deliver as quickly as you or you can provide a 24/7 customer service. You need to make sure there’s a reason for your potential customers to choose your product over your competitor’s.
If you can, see how a number of competitors are performing. We’d recommend checking their social media channels for engagement, as this is a great indicator of their reach. If a lot of businesses appear to be failing at this, it may mean they’re not doing well. This is either a warning sign that the niche is not profitable or a risk for you to take advantage of.
Find a supplier
Once you’ve decided on a potential niche for your business, it’s time to think about whether you can gain access to a supplier. The supplier could be a wholesaler or a manufacturer. This could be the full product or it may be the components or ingredients. If you’re selling different products or require a range of materials, consider multiple suppliers.
Think About Storage and Fulfilment
Before you go ahead and commit to buying a product or material in bulk, think about how you’re going to store your product and how you’re going to fulfil orders when they start to come through.
For more information on storage and fulfilment, why not get in touch? We can talk through your project with you and explain to you how everything would work.
