Competing with the Amazon’s and Walmart’s of the retail world needs a substantial investment. Perhaps hundreds of millions of dollars.
Here’s an example. Ecommerce entrepreneurs Marc Lore, Mike Hanrahan, and Nate Faust launched Jet.com in July 2015 after about 350,000 people had used the website in a beta period. At the start, Jet had a reported 4.5 million products. Clearly, it had been built to sell everything to everybody.
In short order, the organization raised $820 million from investors. And in August 2016, Walmart acquired Jet.com for $3.3 billion. You could call it a success.
If your ecommerce company can increase $820 million, by all means give this approach a try. Otherwise, consider a smaller market with fewer opponents and a much better chance at success.
The Significance of a Niche
Lore, among those Jet.com founders, began with a market. Back in 2005, Lore and Vinit Bharara launched 1-800-diapers. The website became Diapers.com.
In its first year, the company sold an estimated $2.5 million in baby products. A couple of years later, Diapers.com and sister websites Soap.com and Wag.com sold for over $500 million. So it’s still possible to produce a whole lot of cash in a niche product industry.
An ecommerce market has at least three benefits for most businesses.
Less competition. As soon as your company serves a product market it must face relatively less direct competitors. This is true even if Amazon or Walmart sells a specific item.
Take an example from brick-and-mortar retail. Walmart sells bikes, but there are still many successful specialty bike shops. There are lots of reasons for this. Walmart tends to concentrate on cheap bikes, while specialty stores offer greater quality inventory. Walmart associates aren’t bike experts and ordinarily will not help to repair a bicycle, but a local specialty store will.
More voice. If your company uses content marketing, it’s much easier to position your business as a market leader and specialist in your specialty.
Think again about a neighborhood bike shop versus a enormous department store. A local store should have more product knowledge and can otherwise position itself as bicycling experts.
Search engine optimization. New ecommerce companies often live or die on SEO. General keyword phrases can be more challenging to position for than long-tail, niche phrases. Therefore, it could be a lot easier to generate site traffic for market products.
Then let’s consider four measures to select a product niche.
4 Steps to Discover a Niche
1. Research the product. There’s a substantial difference between creating a product which does not exist and aggregating available products into a market.
In the former instance, to make a product that you would ask questions about client issues, needs, and needs. But when your purpose is to build products for a market, you’d typically focus on service and convenience.
Here’s an example. There are a few million vegans living in america. Some of those vegans have selected the diet because of its health benefits. They wanted to be thinner. Or they’d suffered from joint pain.
The next group of vegans chose the lifestyle due to the animals. These vegans believe that consuming meat is animal cruelty. The group not only won’t eat a hamburger, but also won’t wear leather, silk, or any clothes or shoes made of animal products. This is a product market opportunity.
Most men’s dress shoes are made from animal skin leather. If a vegan needs to purchase a dress shoe, he’s got to research several shoemakers to identify the a couple of styles that each generates from plant-based materials.
An internet retailer could make this far more convenient. This merchant could identify all the vegan styles available from 50 different shoe makers and aggregate them into one shop.
You can identify similar product markets by asking convenience and service questions.
Try this. Compose a list of some of your hobbies and interests. How can those hobbies or interests affect your shopping behaviour? What can be done to make shopping for those items easier, quicker, or more suitable?
You could ask business partners and friends to complete this identical exercise. The objective is to get a list of fairly narrow product markets. Use the list to continue your study.
- Men’s vegan dress shoes.
- Rooftop gardening supplies.
- Loose leaf tea and accessories.
- Electric bicycle conversion kits.
- Dog training equipment.
- Women’s hunting apparel.
2. SEO. For each item in your list, research keywords for SEO. One reason to seek out an ecommerce market is the potential to rank for significant, product-related keywords.
SEO research will also help you determine if your niche is too small or too big. It may give you an idea of just how much traffic you may have the ability to create for your ecommerce business, and it may help you ascertain how much competition you could face.
Consider the instance of rooftop gardening supplies. You could use an search engine optimization tool such as Ahrefs to vet this market.
It turns out that the specific term”rooftop gardening supplies” gets hardly any searches in a specific month. So you could alter the expression, trying”rooftop gardening” and then”rooftop garden”
Ahrefs reports comparatively low search traffic to the term”rooftop garden” The term also includes a key word difficulty score of 15.
For “rooftop garden,” Ahrefs reports an average of 4,400 monthly searches and a keyword difficulty score of 15. This means the term might be a little work to rank for, and may not have enough monthly search traffic to warrant an entire niche.
Let us try another ecommerce market thought,”electric bike conversion kit” With this period, Ahrefs estimates that the expression gets 6,400 monthly searches on average and it would be easy to rank for it.
“Electric bicycle conversion kit” includes a little more traffic (even though it’s still a relatively small number) and an extremely low key word difficulty score.
The associated term,”electric motorcycle kit” gets about 12,000 monthly searches and contains a key word difficulty score . Electric bike kits may be a market with potential.
There are other search engine optimization study tools besides Ahrefs. Use your preferred method. The intention is to determine if you believe there’s sufficient search traffic to make your ecommerce market lucrative, and determine if your website could rank for important keyword phrases.
3. Supplier research. Once you’ve identified a couple of possible product niches, it’s time to start searching for potential suppliers. The purpose in this step is to obtain a list of the specific products your ecommerce company could market.
This may require some work. For instance, if you would like a loose-leaf tea organization, you could search Google for”tea wholesaler” or”tea importer” to create a list of a few dozen companies. You’d then contact each, obtain prices, and learn about their payment provisions and minimum order requirements.
Some businesses have supplier directories. There are supply chain solutions, too. Worldwide Brands, by way of instance, publishes a directory which includes suppliers for many product categories.
Again, get a catalogue or listing of available products from every supplier you’re contemplating.
4. Item analysis. Now you can examine the available products from the respective suppliers.
By way of instance, Algopix can identify product opportunities for market sellers. But it may also be a great indicator of product demand and profitability.
You may be still exploring the electric bike kit market. You’ve got a supplier willing to deliver a BAFANG BBS02B 48V 750W electric bike motor with an LCD screen for $250. If you hunt Algopix for this, you can obtain some interesting insights.
Algopix provides insights about how a product could sell in marketplaces. This, in turn, might help you decide if there’s excellent potential for your specialty.
By way of instance, Algopix doesn’t recommend the product for marketplaces. Shipping costs, payment processing fees, and market fees add up to about $69. And you would perhaps require another $44 in pay-per-click advertisements to get a sale, further adding to the cost.
Algopix also projects a relatively low need. It estimated that you could sell 20 in a month on Amazon and eBay. But 20 a month could create $2,800 in gain. If your market ecommerce company had 50 comparable products, you could grow to maybe $140,000 a month in profit.
Here you do not need to select the recommendation of a tool. Rather, decide if you are comfortable with the products you’re contemplating.