There is still room for new eCommerce marketers. According to Statista, electronic commerce is a $1.2 trillion industry. Getting started with eCommerce means choosing a niche that you can be passionate about, but which also has the possibility of turning a profit. It is important to select a niche so that you know which customers to target.
There are thousands of products available that you can sell online. New entrepreneurs sometimes have a hard time knowing where to start in the selection process.
Look at Market Demand
One way to choose an eCommerce niche is to see market demand that product. Let’s say you find a product you think is interesting and unique. There are some ways to determine if there might be a need for that product.
There are some basic product types you can sell. They tend to fall into these categories:
- Ebooks and Manuals
- Products that solve a problem
- Consumable products (these are items people use up and must replenish)
- Novelty items
Once you choose an item from one of those categories, you’ll next want to look at whether the product matches any trending topics on Google.
Take a look at what topics are trending on Google and see if the products you are considering the match up to one of those topics. For example, the top two trending searches on Google for December 14, 2015, were:
- Kim Kardashian
- Justin Bieber.
Can your product tie into these celebrities or music in any way? If not, move on down the trends, seeing if anything meets an interest people currently have.
Social Media Trends
According to the Pew Research Center, 65% of adults now use social networking. Following what is trending on sites such as Twitter and Facebook can also tell you a lot about any unmet needs and the interests of online leads. For example, some topics trending on Twitter in December were:
In addition to logging into Twitter and only looking to the left sidebar to see what is trending, you can use sites such as Trendsmap to break down what people in different areas of the world are talking about.
On Facebook, discovering trending topics is as easy as signing into your account and looking in the right sidebar on your home page. The top three topics will pull up, and you can view more by clicking the down arrow. For example, these topics were trending on December 14, 2015:
- Year in review
- Presidential election
- Instagram husbands
While the topics are broad, they may give you an idea of what people are currently interested in and thus a good place to start brainstorming on a product you might want to sell online.
While you don’t want to copy what others are doing, you can get a good idea of the types of products people are buying by searching bestseller lists.
- Amazon is one of the top eCommerce platforms around the world. Go to Amazon.com, click on Categories and choose one. Now, go to the top of the category page and click on the tab that says “Best Sellers” to see what the hottest products are.
- Ebay is another place to search for hot trending products. Just go to Ebay.com, hover over the tab that says “Today” and then click on “Today’s Trending Collection.” It will show you items that are doing well at the moment.
- If you’re thinking about selling handmade or artisan products, Etsy is a good place to see what is doing well and what isn’t. Go to https://www.etsy.com/market/best_selling_items directly to find out what is hot today.
What Is the Competition?
While you’re on these sites doing research, take the time to study your competition. If you click on a username on any of those sites, you can see the complete inventory of products that seller is offering.
For example, let’s say you notice that another person is selling a product on your short list of items to sell. Let’s just see it is a fishing rod and reel. You click on that user’s name and see that he also sells accessories such as fishing line and lures. Perhaps he also sells tackle boxes, targeting the same group.
You can learn a lot by studying what your competition is doing. You can learn where to advertise and even what additional products you could sell.
Learn Your Chosen Niche
Once you have a product or two in mind, you can set your niche. Let’s use the example above and say you’ve chosen fishing supplies as your niche area.
Once you’ve chosen a niche, what are your next steps?
- What products are available? Just because you like a product doesn’t mean you’ll be able to find a place to order it quickly and keep it in stock. You also have to look at the cost and if you can sell the item at a comparable price to other online retailers.
- Which products have the greatest profit margin? One way to narrow down the list of possible items to sell is to look at what price you can buy them at, what price they are readily going for online, and what your overall profit margin is. The higher the profit margin, the better your business will do in theory.
- Does the supplier offer drop shipping options? If the item is large, this can save you money because instead of having the item shipped to you and then shipping it to the buyer, you skip a step in the postage process, thus reducing costs.
- Is there a discount if you buy in bulk? If you are certain, you can sell the item, buying in bulk can drive down production costs. Typically, the more of an item you can purchase at one time, the better price you’ll get for that product.
Is the product one that sells better at certain times of the year than other times? One example is ugly Christmas sweaters. They will sell best between November and January. The rest of the year, sales will slump off.
If you plan to sell a seasonal item, have a backup plan in place for what you’ll sell during your slow months or how you’ll ramp up during the seasonal sales next year.
Can You Get Behind This Product?
Before you make a final decision to sell a product, ask yourself if it is something you can get behind. Do you think it adds value to the lives of others? If not, it will be difficult for you to sell it when you have to pitch the product.
Potential for Product to Add Value
Do you believe the product is well made and a good value for the money? Do you think it makes your customers’ lives better, even if only in some small way?
Do you use the product yourself? Personal testimonials are powerful. One example of this is the representatives of MLM companies such as Young Living essential oils. They use the oils themselves and swear by them. This passion shines through, and others want to try the product. If you wish to sell a product, then you need to make sure you’re willing to use it yourself, and you understand how it works and why it is the best of the potential products out there.
According to Entrepreneur magazine, testimonials work because they:
- Build trust
- Aren’t spammy
- Help overcome doubts
Potential for Repeat Sales
Is the product one that people will reorder or is it a product they buy one time and never again? Products that people buy once:
- Expensive tool box
- Novelty items
Products that people order over and over:
- Food products
- Beauty products
A product they love that can be used up or will wear out is one that they will likely reorder. However, don’t necessarily rule out other products. You also must look at whether there is a potential for people to order the item for other family members or gift giving.
Growth and Scalability
If you’ve ever spoken to an investor or watch NBC’s Shark Tank, then you’ve probably heard the word “scalability.” In a nutshell, this just means whether or not the sales of the item can be increased quickly or it is a product that falls flat in bigger markets.
An example of a product that won’t scale well might be a valet parking service aimed at local high scale restaurants. This is a market where you really must have a contact to get in good with the restaurants. There is a lot of competition. It is not easily taken to other markets where you might not have the same contacts. There is also high competition in other markets.
An example of a product that does have good scalability would be a baby carrier that saves on mom’s back. Perhaps the product is currently sold in a few local boutiques. However, with the right connections and work, this is an item that could easily appeal to the masses of new moms out there. It can be sold in multiple markets around the world and online.
Is the item you’re looking at scalable?
- Does it have mass appeal?
- Would it translate well to both online and brick and mortar sales?
- Do you have the ability to change it, adapt it, add similar products to it?
Of course, there are a lot of additional factors that go into figuring out scalability, but those are the basics that should help you decide between products you might be considering.
Once you decide on a product, you have several choices in how to obtain it:
- Make the product yourself (this can impact scalability later)
- Pay someone to manufacture the product for you
- Find a supplier who is already making the product and has them ready to sell wholesale
One way to find suppliers is to visit trade shows within your niche area. So, let’s use that fishing supply example again. You would attend a wholesale fishing tackle trade show. While at the show, you take notes, ask questions and look for unique products to sell.
You should collect:
- Contact info
- Company’s ability to fulfill large orders
- Information on drop shipping
Most of the people at trade shows are third party vendors. When possible, skip the suppliers and order directly from a company to reduce costs. That is where wholesale comes in.
Locating wholesalers can be more challenging than you might think. Many of the wholesalers that will pop up in your Google searches are not wholesalers at all. Their prices are not at a level that will allow you to make a reasonable profit.
Shopify has a nice list of both domestic and overseas suppliers. This is a good place to start, but you can also purchase a few products and check the packaging for manufacturer information. Contact those manufacturers directly via email, snail mail or telephone and inquire about wholesale accounts.
What Are the Markets for Your Niche?
Now that you’ve chosen a product and found a supply of that product before you spend money ordering inventory, you should make sure there are distinct markets for your niche.
Analyze Where You Can Promote and Sell Your Product
When you were studying the product and your competition, you likely already came up with a list of places the competition was selling and know you can go toe-to-toe with your competition in that market.
Now, if you want to excel past the competition, you must find additional. Think of eCommerce as a multi-forum endeavor:
- Create a shopping cart system on your website.
- Have a social media presence.
- Talk to other eCommerce owners about offering special deals to one another’s customers in a newsletter.
- Email users of abandoned shopping carts. Kissmetrics estimates that 54% of shoppers who abandon a shopping cart, but are then offered a discount, will complete the sale. This form of follow-up and outreach is something you can easily automate and do a bit better than your competition.
What Problem Does the Product Solve?
One thing you should figure out if you haven’t already is what problem the product solves for people. In the case of the fishing rod and reel, let’s say that the one you’ve chosen to sell for now allows a bass fisherman to cast farther and more accurately than any other on the market.
You now know not only who to promote to (bass fishermen), but you also know what benefit the rod and reel offers, so you know how to promote to that demographic.
How Will Customers Find You?
You can create the most beautiful website anyone has ever seen, offer discounts, and do all the right things, but if customers don’t know how to find you, you’ll have wasted your effort.
In addition to having a website, you need to make sure your website:
- Ranks well in search engine searches
- Is mobile friendly. Remarkety estimates that over 70% of customers make a purchase on a smartphone at some point. Your emails and your website should be mobile friendly.
- Has inbound links. These are achieved when you get involved in the online community for your niche.
- Become a thought leader. So, you would join forums for bass fishermen. However, be careful not to be spammy. Don’t just promote your product in the forums, but offer advice that makes sense to set yourself up as an authority.
- Add valuable content. Hosting a blog on your website is a superb idea. It allows you to add useful topics that you can point people to as added value (assuming the forum allows links).
You’ll also need to utilize some smart advertising on social media, in newsletters targeting your market demographic, and even by passing out business cards that list your website address when you meet local fisherman in person.
Filling Holes in the Market You’ve Chosen
Now that you’ve chosen your niche and started selling the product, you probably understand your chosen niche a lot better.
Look at the questions that your targeted users ask in forums or on your blog. What needs to they have that aren’t being met? Can you find or make a product solve that problem?
Finding a niche that you are passionate about means that you’ll start to understand more and more about your customers needs that have to be solved. Choosing the right niche means that your business will grow over time as you add more products and discover new ways to promote those products.