One of the most common questions related to eCommerce that people ask is ‘which niche is profitable?’
10 Foolproof Strategies To Pick A Profitable Niche For Your Online Store
The answer to this question is not simple, nobody can answer this right away.
Reason?
Selecting a niche depends upon a myriad of factors such as passion, knowledge, objective, experiences, etc. These factors are not constant for everyone which means, selecting a niche is an individual process for everyone.
People make the mistake of selecting a niche based on a demand for a certain product. For instance, tech enthusiasts get crazy when a famous brand launches tech-goods, and they are ready to pay any price for it.
So, does that mean you should start selling high-tech products? Selecting a product to sell just because it is in demand, is a wrong place to start, and such a business will not last long.
Did you know that around 42% of online businesses collapse because they fail to find a profitable niche?
You don’t want that to happen to your startup, right? Therefore, before you jump to finalizing a niche, we would recommend you follow the below-listed 10 foolproof strategies for selecting a profitable niche for your business.
But before we proceed, let’s walk through the term ‘niche,’ and understand why it is important to select a profitable niche for your online store.
What Is A Niche?
A niche can be described as a fragment of any market or an industry with a specific audience who needs a solution to their problems. Providing a feasible solution to that particular audience is how you’ll select a niche.
A niche can further be subdivided if you are looking to target a specific section of the audience to address their problem.
For instance:
An industry can be of pets. It can be further divided into pet food, pet accessories, medicines, toys, toiletries, etc.
Let’s pick up the niche of toiletries. Now you can again divide it into further niches. The categories can be soaps and shampoo for cats, dogs, rabbits, etc.
If you select the sub-niche: toiletries for dogs, you can further narrow it down. You can sell toiletries for a specific breed of dog such as Pomeranian, German shepherd, Siberian husky, Pug, etc.
Pet > toiletries > toiletries for dog > toiletries for Pomeranian
This can be done for every industry that you are interested in.
Do You Need A Niche?
After having understood what niche is, let’s now ponder upon if it is really necessary to select one.
When people plan on starting an online store, their first thought is to have a store that sells everything, like Amazon, eBay, Etsy, or Alibaba.
What people forget is that Amazon, eBay, and many other giants like these, are not run and managed by one person or even a small team. There is an army of people to manage these stores and to cater to the needs of the customers.
In the beginning, it is always a good idea to focus on one niche and once your business starts to grow you can include another niche in your business.
Keeping more than one item will involve more expenses, and not to mention the risk.
Therefore, play safe. Start small, and focus on one niche.
10 Foolproof Strategies To Pick A Profitable Niche For Your Online Store
1. Follow Your Passion
If you enter into the niche market about which you are passionate then it won’t be difficult for you to fetch hefty profits from that market.
Imagine a person is passionate about books. He would know better what kind of content will people prefer, which books are trending, or which writers will attract the most customers, etc. By having enough knowledge and experience with different authors and genres, he’ll be in a better position to lure customers who are like him; passionate about reading and books.
Another benefit of following your passion is that you would already know where to find the people who have the same interests as yours. For instance, a makeup lover would be a part of groups and communities that discusses makeup products and famous brands. It also makes it easy to market your online store.
The things that you are passionate about might not be as profitable as you think. List out a few things you are really passionate about and then select the profitable one.
2. Keyword Research
The next strategy after making the list of your passions is to begin your research for keywords.
Thanks to keyword research tools like SEMrush, KWFinder, Ahrefs Keyword Explorer, Google Keyword Planner, GrowthBar, Long Tail Pro, etc. you can check if people look for the niche that you are planning to select.
Lookup for the keywords or phrases in the search box and then start your search for the keywords.
Start from a broad category and then narrow down your options to find keywords that will fit the niche or sub-niche that you have selected.
Scan the options that come up. Make a list of the keywords that resonate perfectly with your niche. It will let you know how people will find you or how you can curate your content to reach them and capture their attention.
Furthermore, the keywords will allow you to develop an effective content marketing strategy.
3. Check The Competition
Before you finalize your niche, don’t forget to research the prevailing level of the competition in the market and identify who you’ll be competing with.
If the niche you want to select is already occupied by some tough competitors, then you should reconsider your selection. Let’s face it, people will always prefer a renowned brand over a small start-up. If you will establish your business under a niche that has a lot of fierce competition, then be prepared to face the music.
To check the level of competition in the market you’ll have to take help from Google and for advanced search, take help from SEO tools to know who your competitors are.
Start by entering the niche you are interested in, let’s say you enter ‘toiletries for a dog.’ It will generate the data that you’ll be needing to analyze the competition in the market. It will display the name of the brands that are already dealing in this field.
To collect further data, you can enter your niche on the search query of Google, check which brands popup on the search engine result pages. Decide if your business would be able to compete with theirs or not.
4. Target High-Dollar Product
The majority of the people who enter the world of online selling, often aim to sell numerous low-priced goods instead of a few pricey ones.
Many of them are of the view that selling lower-priced goods will increase their sales and they will be able to attract more customers because of the lower price.
This approach is not suitable to generate high profits from your eCommerce store. Instead of going after cheaper goods, aim to sell high-priced goods. Many sellers are dealing in cheaper goods, but there are comparatively lesser sellers who deal in selling expensive goods.
To sell high-cost items, you will have to research more about the products and how to market your online store to the prospective audience.
5. Assess Your Resources
By assessing your resources you will be in a position to start something that you already have in hand. For instance, you want to sell cakes and brownies in your online store. If you have an oven, and other ingredients at home, then it will be a good option for you to start with something that you already have.
This prevents you from investing extra costs in the startup. By starting your online business with the things that you already have in hand, you’ll be ahead of your competitors and the cost that you saved on buying the supplies, and other assets can be spent on marketing your business.
So, before searching the internet, look around your house, who knows you might find something to start your business. It can be anything from paints to the yards of fabric lying useless in your house.
6. Solve A Customer’s Pain Point
Identify what problems the customers are facing. Try to come up with a solution for that problem and it will be a profitable business for you.
For instance, aspirins are the solution to treat minor headaches, fever, inflammation, etc.
What pain points will your product solve? Research about what problems the customers are facing with the existing products. Don’t worry, you don’t have to go door to door to collect the information.
You can start by observing people around you, your family members, friends, and even yourself. Look at the products that you are using, are you and the people around you content with them? Is there any way they can be more effective?
A perfect example of this would be the introduction of fancy masks made with fabric. With the advent of COVID-19, every person was required to wear a mask. The surgical masks were irritating to some people, some found them boring and unattractive, and many people simply didn’t like the idea of wearing plain green, blue, or white surgical masks on every outfit.
Many businesses identified this pain point of the customer and introduced facemasks made with soft printed fabric to make them more comfortable and attractive.
7. Get Innovative
Ask yourself: How innovative can I get with my products?
If you are making up your mind to select a niche, then don’t forget to think about your niche from this perspective. If your products are innovative, then your potential customers will be attracted to you.
Being innovative helps your business to survive and grow in the competitive world. Without innovation, your business will become stagnant after some time it will be forgotten by the people.
People love to try things that are different and unique. Don’t forget to think from this perspective.
A simple example, in this case, would be Uber. Though it’s a cab service, the innovative point is that a cab can be called just by a few taps on the screen. Similarly, Netflix is another example to quote in this regard. It has changed the way we used to watch series and movies.
8. Capitalize On Trends Early
With the advent of social media, it is easy to keep up with the trends of the market.
Identifying, and then building your business according to the market trends can be a plus point for the business. By starting early, you can capture a large chunk of the audience and make your place in the market. If you delay it, somebody else will take advantage and you will have to face the competition for making your place.
However, bear in mind that ‘Fad’ is not a ‘Trend’. Many people often interchange them.
Trend refers to a new or innovative way of doing something. For instance, in the beauty and fashion world, a trend has started of heatless curls. Instead of curlers and irons, people opted for heatless methods to get the same result. This led to the sales of rollers, pins, and other accessories for this purpose.
On the other hand, fad comes into the glare of publicity because of a gimmick. No wonder fad-products sell quickly, but their demands also fall quickly because of the inability to satisfy the need of the customers.
If you want to start a business based upon a trend, then make sure to dive in quickly before the popularity of the trend fizzles out.
9. Consider Your Skills
Having an online store doesn’t necessarily mean you have to sell a tangible product, no. This is the beauty of the online store that you can sell almost anything from fresh veggies to counseling services.
Instead of selling a product to sell, why not sell your services? Or combine both product and services to sell it to your customer?
For instance, if a person is a good artist, he can offer his services for making a sketch, painting, calligraphy, etc. according to the demand of the customers.
To make it more interesting, he can use his skills on a product and then he can sell it in the market. He can sell hand-painted cups, t-shirts, cell phone covers, etc.
10. Test With Ads
The final step before you close the file of selecting the niche is to test your idea and check if it is demanded by people or not.
Thanks to the social media ads that you can check how many people are interested in your product. Test how many people arrive at your store, what they explore, which products they view, etc.
This will allow you to know if the niche that you selected is profitable or not.
Conclusion
Selecting the right products and niche is a pivotal decision for a business. The products that you decide to sell, will decide the future of your business in the market; either it’ll grow or become stagnant like many others.
We sincerely hope that the 10 foolproof strategies listed above will help you to pick the most profitable niche for your online store.
Good Luck!
Author Bio:
Productivity by ClickUp
