Finding the perfect niche market
Let's say you've decided that e-commerce is the right business model for you. Now it's time for another important decision: deciding which specific niche you want to build your online business in.
Your niche is your specialty. It's what sets you apart in the market. Your niche falls within a narrow category of products you sell to meet the specific needs of a specific group of people. To find your identity as a brand or online retailer in the competitive world of e-commerce, you need to identify the industry and niche you want to focus on.
For example, women's clothing is a broad category: clothing is a universal need. However, the sustainable and eco-friendly sportswear niche is considered much narrower, as it caters to the specific wants and needs of a specific demographic.
The example above might seem like a good idea for a product niche, but with the nearly limitless possibilities offered by the Internet and online marketplaces, you'll be faced with a plethora of potential niches and business opportunities to enter.
It can be a bit overwhelming to choose a product niche from the vast multitude, but it is a necessary and vital step in building a successful online business.
The importance of choosing a product niche
You may be wondering why you should choose a product niche and only sell a narrow category of items when you could have access to so much more, especially with dropshipping.
While your options may be vast, try to keep in mind that even large retailers like Amazon started out as niche-focused businesses that sold only books online for years.
Having a niche is especially important for a new e-commerce business because if you appeal to everyone, you might as well appeal to no one.
Your marketing message can't appeal to everyone, so it's best to choose a niche and an ideal target market that will most relate to your products and business. Then, once your online store is up and running, you can take it from there to grow and expand, if you wish.
Just remember that choosing a niche for your online business is one of the key building blocks of a solid and profitable online store. It's also the first step you need to take to help you determine which products to sell and to whom.
How to choose the right niche
One of the biggest mistakes anyone can make with their online business is jumping in too quickly without properly considering the right product niche. This is a strategic and important decision you must make for your brand to succeed.
Here are some of the things you need to consider when choosing a niche:
Your passion
This is a natural beginning. Creating a business and choosing a niche that focuses on your passion and interests can be a powerful force that can drive your online business to success.
Many people dream of finding ways to monetize the things they are passionate about, and working on your passion can provide you with long-term benefits through the ups and downs of business.
If you're passionate about your work or hobby, the drive to be the best in your industry should come more naturally than something that doesn't provide the same interest or motivation. You'll be more likely to abandon a project or niche you're not interested in. At the same time, you'll also be working with a target market that shares your interests, which means you'll have a better understanding of their wants and needs because they align with yours.
However, being passionate about something doesn't necessarily lead to the success of your business. Your passion could even be detrimental to your e-commerce business if not everyone shares your interest. There must be an existing and sufficiently large target market to sell to.
You need to be aware that your hobby won't necessarily lead to profitability, and in business, you'll still need to take an objective stance and make practical business decisions based on facts and figures.
What you can do to solve this passion-versus-practical conundrum is to identify and list your interests and determine a niche that can balance passion and real profit, giving you the motivation to persist and persevere.
Don't be too hasty
This is exactly why so many e-commerce businesses fail. Popular niches attract businesses like flies, but they also kill them like flies.
Even if you build a store by narrowing your niche to selling the hottest summer trends and marketing with every imaginable strategy, you'll likely still be drowning in the torrential waters of your competitors. You'll find thousands of other sellers to contend with, all selling the same thing.
Therefore, don't be afraid to look for smaller subsets of the broader category. Narrowing your category will help you stand out and lead you to a niche with less competition and a smaller target audience to serve. Less competition will help you dominate your target market.
Do more research
Now that we've determined that you can't just jump into the first oversaturated niche you find, it's time to do some more research.
You can start your research as you normally would, with a simple Google search: "trending niches" and "low competition niches." There are also many other tools available online to track the rise, fall, and stability of various niches using keyword searches. One such tool is Google Trends, which will show you graphs showing the peaks and declines of people's interest in a specific niche.
A web search for trending categories should yield niches that are extremely popular now and those expected to become profitable in the coming months and years. These are very attractive because they are full of potential, but they also attract fierce competition.
Social media platforms like Facebook and Instagram are also great places to observe audience demand for a specific niche. You need to be sure to assess people's interests because you can narrow your niche based on what specific groups of people want and need.
Ideally, your niche should hit the sweet spot by not being too popular, but already having an existing target market that's sufficiently interested in it. For example, pet care is a lucrative e-commerce niche, with many pet owners purchasing accessories and grooming products for their dogs and cats. Narrowing your niche to something like high-quality, grain-free, and sugar-free cat food might be an option. You have an existing target market and a narrower niche. Or, for another example, focus on selling grooming accessories and clothing for a specific dog breed like the Pomeranian.
Ask yourself: is this niche a passing fad?
Fads are something you can practically count on to suddenly surge in popularity, have a brief and powerful influence on people's spending habits, before fading into nonexistence and obscurity once again.
Fads seem promising when they're at their peak, but in reality, they leave very little time for a company to capitalize on their success. If you build your business around a passing fad, your business will die when the fad passes.
The bottom line here is that you might want to look at a niche that's been around for a while, one that already has an established consumer base that has stood the test of time. If you want to build a brand around a niche, think long-term, not short-term. Tools like Google Trends can also help you track the growth and decline of potential niches you want to explore. It's a handy map of people's interest landscapes.
Consider the sustainability of the niche
Once you’ve determined whether your niche is a passing fad or a trend that has stood the test of time, you still need to consider the future of your niche by considering its possible lifespan.
You have to ask yourself, will it be profitable in a year? In five years?
These are questions you need to ask yourself about the future of your niche because it's also the future of your business. For example, according to Oberlo, watches were the best-performing niche category in 2018, while The Insider predicts that analog watches will become obsolete by 2020. There's no way to say whether the analog watch, with its traditional dial, a classic style benchmark, will be overtaken by smartwatches, but these are just the kinds of things you need to consider when choosing your niche.
The sustainability and longevity of your niche is difficult to consider because no one can predict the future.
Conclusion
The niche you ultimately choose will define your brand and your online business. It's a crucial choice you must make that will determine the success of your online business venture.
To find your ideal niche, you can first look at your passions and hobbies to see if you can profit from sharing your passion with others.
Ultimately, the key to choosing the right niche is research. You need to observe trends and find an ideal niche that falls within a narrow category and aligns with the needs of an existing target market you can serve.
Selecting a product niche to build your dropshipping business requires some time and thought. We recommend writing down all your niche ideas, doing your research, and seeing which one you think is best in terms of profitability and sustainability.
Choosing your niche may seem like a difficult choice, but it's important and requires time and research. If you're still unsure which niche is best for you and your online business, contact Yastime. Together, we'll find the best niche for your successful online business.
