5 Important Tips On How to Choose a Niche for eCommerce
The eCommerce market was valued at $10.36 trillion last year, with a growth rate of 14.7%, which signifies an increasing interest in the space. As of 2020, there were 24 million eCommerce sites worldwide, but not all would become successful. Many entrepreneurs notice the success of the market's big players like Alibaba, Amazon and believe they can replicate it.
While replication is possible, eCommerce business owners should focus on their niche over profit as a sole aim. This blog post will cover how to choose a niche for eCommerce.
（Copyright photo from: https://unsplash.com/photos/Px3iBXV-4TU）
What is Niche for eCommerce?
An eCommerce niche is a segment in the eCommerce industry that peddles unique products. These products stand out from others in the industry.
One can also refer to it as a specialist market segment for particular products or services. Niche products can range from health products to eco-friendly products or even handmade products. The point of success in an eCommerce niche is to find an overlooked but profitable market that piques your interest. This is a niche for eCommerce.
Why Do You Need to Choose an eCommerce Niche?
- Streamlined Audience Search: An eCommerce niche allows you to cater to a particular audience type rather than casting nets into a massive audience pool. There is a higher probability of a sale when your eCommerce store attends to a particular niche.
A streamlined audience also means that the cost of advertising reduces. You are no longer pitching to everyone but a specific set of people.
- Reduced inventory costs: eCommerce stores that operate without a niche would ultimately end up purchasing products based on the profit they perceive it can make. The profit might be possible, but at the same time, the market can shift, making that the products are no longer in demand.
Choosing a niche for eCommerce reduces inventory costs for your brand since only products specific to your niche would be stocked. The chances of niche-related products selling are higher than that of random products.
Benefits of Selling in A Niche Market
- Lower Cost of Advertising: A niche market reduces the advertising cost of a brand. Having a niche implies that you have a smaller amount of people interested in your product. There are different paid advertising platforms that offer precision consumer targeting you can use to increase your brand's exposure. Examples are Facebook ads and Google AdWords.
- Customer Loyalty: Niche products tend to have a loyal customer base. Once your store is known as a niche store, customers interested in that field would continually visit it. The guarantee that they have is that they can always find what they desire in your store.
- Less Competition: The eCommerce market has some underutilized fields that can be very profitable. Choosing a niche prevents you from vying for the same audience as other eCommerce stores in the market. A niche narrows down the amount of market competition your business would have.
Categories of A Niche Market
In deciding how to choose a niche for eCommerce, it pays to be aware of the different categories of a niche market, and the two main categories are evergreen niches and trending niches.
It is also ideal to know the difference before selecting an eCommerce niche. Evergreen niches are always in demand irrespective of season, holiday, supply, or market trends. An example of evergreen niches is the sport and fitness niche.
Trending niches are often seasonal or tied to a particular area, and once that season or occasion is over, the demand reduces. An example is an Olympic apparel niche. This niche is profitable as the Olympic season comes around.
A niche market subset often depends on:
- Pricing: Pricing in a niche market relates to the profitability of that market. Product pricing helps to determine if the niche is something that an average consumer would be willing to spend on irrespective of prices.
- Demographics: The demographics of a niche market identify audiences based on their gender, income level, age, and educational background.
- Psychographics: The market subset of psychographics determines a niche audience based on the aspirations, interests, goals, and life outlooks.
- Geographic: The geographic breakdown of a niche market postulates that the location influences the type of products we purchase. It also claims that location plays a central role in our purchase decisions.
How to Choose a Niche for eCommerce?
The first rule of sustainability for your eCommerce business is passion and interest. eCommerce businesses that erupt based on profits tend to fail more than those driven by passion. But one can always select the perfect niche in the following ways:
- Gauge consumer interest: Intensive keyword research should take place to measure consumer interest. Software such as Google Trends can be used to determine what people are searching for.
Google Keyword Planner can help determine the search volume of the keyword. For an accurate result, a search should spread across multiple platforms, including Facebook audience insights.
- Analyze Competition: In determining how to choose a niche for eCommerce, scope out the competition. Before you select a niche for your business, take note of how many competing sites exist. If the field seems saturated, it is best to pick out a different niche.
Google ads will provide that insight as a comprehensive keyword competitive degree search. The keyword competitive degree will inform you of how many times the keyword has been searched and utilized.
- Figure out margins and pricing: Determine the price of the products in your desired niche. Pricing should be marginally to decide what profit you stand to gain from the product along with its profitability.
- Propose a solution to your audience’s niche problem: There are always pain points in every eCommerce niche. If you want to stay ahead of the competition, make sure to answer your audience's questions.
- Validate your niche: eCommerce store owners that employ Google or Facebook ads for their niches tend to see higher results than those who depend on referrals. With Google ads and Facebook ad campaigns, your business is open to more trackable results.
All You Need to Grow is What We Value.
The number of eCommerce stores in existence can make entering the market seem daunting. But with the right eCommerce niche, it becomes a matter of time before your store succeeds.
AllValue is an eCommerce software tool designed to achieve the goals of your business. AllValue takes away the legwork involved in finding an eCommerce niche by determining what niche your brand would thrive in for you.
We collate data based on your interest, location, and demand to select a niche. Once we find the niche, we can create the eCommerce website, purchase products, and organize logistics for your brand. We are a result-driven brand, but if you tend to walk on the cautious side, feel free to utilize the 15-day free trial period before you commit.
Visit AllValue for more information!