Over the last couple of weeks I decided to open an online store so I could take our readers step by step through the entire process from beginning to end. What niche will you be selling, you may ask? Well, that’s the biggest question of them all.
We know that when it comes to eCommerce ‘following your passions’ isn’t enough. The secret to finding a niche is about finding a balance between your passions, your skills and the demand of the market.
Before I could decide what I was going to sell I needed to think about the niche I was going to sell in: the most important step in fulfilling any aspirations to be an online entrepreneur. I totally understand how trying to find a niche can be frustrating and demotivating; which is why I put together this guide. But, first…
What exactly is a Niche Market?
A niche market is a specific market that a product is focusing on. In other words, which specific market’s need is a specific product satisfying? A niche can be further broken down into smaller market segments that will be determined by things like demographics (age and location) and buying power. For example, the niche of a sneaker could fall under athletics, fitness or fashion, depending on the product and the need it’s fulfilling and of course your targeted shoppers.
Why Should You Concentrate on Finding Your Niche Before Selecting Your Products?
This is two-fold. Firstly, choosing a niche allows you to think about, research and understand your target audience. It allows you to put yourself in the mind of your possible consumer, to see what types of products you should be pushing to fill their needs. Secondly, as any seasoned online store owner knows, product popularity fluctuates.Marketing to a specific niche means that regardless of what products you add or take off, you have a stable niche you’re marketing to.
Whether you’re a potential store owner or a seasoned store looking to expand your niche, then hold onto your hats and join me on the journey to find a profitable niche in seven steps.
Step 1: Look at What You’re Passionate About
One of the biggest reasons online stores fail is because store owners pick a passion and run with it without doing due diligence… Which is researching whether there are potential shoppers or customers out there willing to pay for the products you will be selling, i.e, is there a demand? So why look at your passions? Because your passions will point you in the initial direction before you get your research on. It will also ensure that no matter what makes it to your short list, you will enjoy what you’re selling.
Make a list of all the things you are passionate about and/or knowledgeable in. For me that was simple to do: travel, photography, copywriting, coffee, more coffee, the beach, John Grisham novels on a rainy day and snacking. But, how to materialize that into a possible online store niche? To do that I broke my lists down further. For example, for travel, possible niches include travel gear, travel books, travel destinations and so forth.
Then, for each item on the list, I followed the remaining steps to see if the niche was indeed profitable.
Step 2: Identify Your Audience
For each possible brainstormed niche, the next step is to look at the audience potential: to look at the type of audience that would be interested in the niche before digging deeper to segment.
For example, one of my possible niches was travel, which in itself is very broad. This can include a wide range of ages, locations, and financial standings. A student backpacker will have a lot less to spend and have different needs to fill, than a professional business traveler. So, I broke it down into different types of possible audience segments within that niche. These included:
- Product store aimed at backpackers and digital nomads
- Product store aimed at family vacationers
- Product store aimed at luxury travel lovers
- Product store aimed at people who want to experience different countries
- Product store aimed at business travelers
- Product store aimed at travel hobbyists
Write down the broad niches you are passionate about, interested in and know something about, without censoring yourself, and then break it down further to get your list of possible of store niches.
Step 3: Ask Yourself These Important Questions
Can You Add Value?
To really break into a niche you need to be able to add value within it. The thing is, there will be hundreds of other stores selling the same products within the same niche. You need to ask yourself whether your store is able to solve problems or provide for the needs of your potential shoppers in that niche, and whether you can provide value – or offer a unique spin – to make your store stand out.
Being an expert in your niche allows you to provide informative content and position yourself as the go-to expert within that niche, making your store, your products and your brand more trustworthy, knowledgeable and helpful and ultimately more profitable. If you can add such value, you’re providing more than just a product, but a service. This will also allow you to charge premium rates as people are more inclined to pay more for better service from people they see as ‘experts’.
For me, as a frequent traveler, I know I could build on ‘expert’ status with regards to travel hobbyists. But as someone who had never backpacked as a student, who doesn’t have knowledge on the couchsurfing culture per say, if I chose this niche, it would be more difficult to position myself as an ‘expert’ and therefore provide the value needed. I am not saying you absolutely have to be an expert, but it definitely will give you a step up.
Is There Customer Interest?
Next, ask yourself if there is customer interest. Is there a significant number of people as passionate…