The eCommerce industry is booming day by day. The lockdown effect has made several offline businesses realize the importance of going online. But how will you choose Ecommerce Niche if you don’t own any existing business?
For businesses with an established audience in the offline market, it is easier to build an eCommerce store online and make more sales. They can leverage their existing loyal customers.
But how will you, as a beginner with no established set of audience, start an eCommerce business?
The process starts with deciding a niche. A pre-decided niche gives a better idea for chalking out the strategies and marketing plans.
Giant eCommerce stores like Amazon and Flipkart can afford to sell everything due to the excess of capital and workforce. However, a small business or an individual has to start with a niche.
If you are an individual or an aspiring entrepreneur, you would need to be passionate about some products or industries. Sure, it is not a compulsion for anyone.
However, what will happen if everyone chooses to start with a high-end product? For instance, it is well known that electronic gadgets have great commissions, and people need it.
But the question is – are you passionate about that niche?
Certainly, anyone can start with that, but it becomes difficult to survive. Lack of interest for a niche mostly leads to dissatisfaction and burn out. Don’t let that happen to you.
Moreover, starting with an industry that already interests, you possess higher chances of being successful. Being updated with the trends and knowledge gives you leverage.
The best way is to note down all your interests and make a list of industries related to those interests.
Now you have the list of industries and niche ideas. The next step is to check the profitability and competition. Usually, competition and profitability don’t go together. Higher the competition, the lower is your profitability.
Most brands and companies fight with each other to give the most competitive pricing to consumers. It leads to the cutting of profits.
Use tools to research. For instance, you can use tools like SEMrush if you are willing to pay.
Otherwise, Google Keyword Planner is a free tool by Google for basic research.
If you visit the Google Keyword Planner tool on the given link, you will see a dashboard. Enter your keyword and let Google fetch all the data.
For instance, I have entered the keyword ‘sports shoes’ to check the competition.
It is obvious that ‘sports shoes’ is a highly competitive keyword, and huge brands are competing on the keyword. The bids are higher as well.
There are 3 major factors here:
This was about the Research part. Once you find a perfect niche with low competition and high search volume, you are good to go for the next step.
The next step is to identify the consumer problems within that niche.
Most of the problems that people face in their day to day lives can be turned into opportunities. Large eCommerce stores handle everything, and they cannot focus on minute things. Smaller businesses and individuals can capitalize on these gaps.
For example, Etsy has done a great job in building a handmade Card Store.
The trend of readymade greetings started growing as people started getting busier. Many people lack creativity as well.
But the handmade greetings have their essence. They are still highly valued and have much demand in the market.
So, Etsy identified this problem and started selling handmade greeting cards.
Trends play a major role in an eCommerce business. A prime example is an ongoing situation.
Till a few months ago, India was facing a shortage of sanitizers, PPE kits, masks, and other lateral products related to the pandemic.
Fast forward a few months, several brands and individuals came forward to make homemade masks and sell at low prices.
Research says that the medical face mask market is expected to grow at a CAGR of over 26% during the period 2019-2025.
The reason is well known. The trends!
You can use several tools for getting real-time trends on the Internet. I would recommend Google Trends. It is a free tool by Google that will allow you to understand the trends in a particular industry.
Visit Google Trends from the link mentioned above and enter the keywords that you want to check.
Again, for the demonstration purpose, I am considering the same keyword ‘Sports Shoes’ to check out the Trends.
It is clearly visible that the searches for sports shoes have suddenly dropped in March 2020. The reason is well known – the lockdown.
But how about comparing it with some trending product?
For that, I entered ‘Masks’ to compare with sports shoes.
And there you see a steep growth in the searches. It indicates that demand for sports shoes might have gone down, but masks are booming the market.
These were the 4 Steps to decide a profitable niche for your eCommerce Business.
Consequently, it is of utmost importance for every small business or an individual to decide a niche to get a decent idea. It helps to determine the strategies and a path to move forward.