Chapter 7: Finding the Right e-Commerce Niche that You Can Dominate

The first step to eCommerce business success is finding a profitable niche.

Look around you.

Every successful eCommerce business owner started in a niche.

You may want to blow in and make it all big like Amazon but guess what.

Even Amazon started in a niche.

By selling niche products and choosing a targeted audience, you have a good chance of succeeding because you know whom to target rather than the “general audience.”

This chapter gives a step-by-step guide on how to find a niche market.

1. Research Product Subcategories To Identify The Best Ecommerce Niches

Before choosing a niche and the product or service to sell, you need to do your research upfront.

You don’t want to spend money on a niche that falls away just after you launch.

Research here doesn’t mean you see the most trending product and decide to sell it only because it trends.

Step 1: Identify Niches That You Can Add Value

Pick a niche that represents your interests and passions.

If you’re selling in an industry that you don’t care about, you’ll lose interest along the way and quit way too early.

If you want to have a good chance at selling, identify niches that you are passionate about and can add value.

You can get ideas from:

  • One on one conversations with people
  • Quora, Reddit, and other forums
  • Amazon products and reviews

Also, think about complementary products or a micro-niche.

Say bike accessories or boat accessories for example.

Step 2: Evaluate Those Ideas

Evaluation helps you identify the strengths, weaknesses, opportunities, and threats of your niche selection.

Without it, your chances of selling are random.

Evaluation includes looking at:

  • Your competition, low or high
  • Marketing potential
  • Profitability/turnover
  • Understanding your target audience
  • If it’s a steady trend, fad, or growing one

Step 3: Validate Your Ideas With Test Selling

After you’ve evaluated your niche and have a much better understanding of all the factors surrounding your choice, you should then validate your idea.

Not validating your niche before you go into business is a big mistake. It may spell business failure from the start.

To validate, create a real-world online store setting and attempt to sell your product to your target audience.

You can use a landing page or mockup store and direct traffic at it.

Since you are just starting, the practical ways to get traffic is paid ads and referrals.

As you test those niches, stay true to them.

2: Do Keyword Research to Evaluate Your Chances

Don’t go into a niche you have no idea about ranking in.

Too many people watch someone succeed in a niche and assume that they will also.

It’s not that easy.

You don’t know the background work they had done.

Check out how hard it is to rank in your chosen niche.

Don’t get caught in an over-saturated niche/market.

To find out if big brands are ranking in your chosen niches and if small brands have a chance:

  • Use Ahrefs to find out how many high domain rating websites there are
  • Check if you can see low domain rating sites as well
  • Take note of the keywords of those top domain rating sites
  • Research keyword search volume

Tip 1: Don’t Be Greedy

So many people do keyword research and choose a niche all because there is a search volume in hundreds of thousands.

It’s exciting, but it’s a mistake that will cost you sales because there is much competition

Tip 2: Find A Balance Between Search Volume And Competition

Whatever you do, don’t get caught at either end of looking for low competition or high volume keywords.

If there’s a LOT of search volume for your keywords, there’ll be HIGH competition as well.

In this case, it’s senseless trying to rank for keywords that you have no chance of ranking for, especially as a new brand.

On the other hand, if you choose keywords with virtually no competition, it either means they have no buying intent or no brand has discovered them yet.

The latter is highly unlikely.

If you fall victim to landing on either end – competition or volume -, you’re going to end up burning out your cash and resources either competing against incredibly competitive keywords or ranking for a bunch of keywords that have do not create sales.

Tip 3: Know Your Niche Products In And Out

If you are going to rank on Google, you need to know what you are selling. 

Writing/buying thin copy isn’t foolproof anymore.

You need a copy that has grit.

Meaning, you need to enough about your product to create stories and amazing pieces around them.

Consistent pushing is key so just having awesome copy may not get your core products, especially if you have heavy competition.

Consider a variety of products that you can add to your core products.

3. Think Beyond A Single Product

Planning around only one product or service limits your business.

You’ll take more to the bank when you plan around solving customer lifetime value instead of selling one-off.

As you choose other products and upgrades to increase customer lifetime value, don’t put quantity over quality.

One thing startup founders worry about is the price of their products.

In a bid to ensure that price is not a hurdle for customers and they still make enough to keep sailing, they bombard their store with a lot of cheap products.

Tip 1: Look Above Only Financial Reasons

If you pick a niche only for financial reasons, it won’t keep you going because you don’t know much about your industry and audience.

However, if you’ve picked a niche that you love or know a lot about, you know the TA you’re going after, what they want and how to sell them on it.

Tip 2: Don’t go too big

If you choose an audience that’s too broad, you’re not targeting anyone.

To target your customers right, pick a single pain or an expensive problem that many people have, and build your store around solving that pain.

With every product you add, contribute to solving the pain of your customers.

From that, you can get your unique offering.

The unique offering should be easy to explain.

Some people fill their talk with so much fluff that after ten minutes, you don’t get what their store is about.

Explaining your unique offering shouldn’t take that long.

4. Try to Create an Advantage Over Amazon

If people are looking for a product online, they will check Amazon and other marketplaces first.

Create a competitive advantage that sellers on Amazon do not have.

Tip 1: Think Of And Craft Your Advantage

You better realize that you need to be different from every other business and offer value enough that customers will move to pay for it.

Brilliant customer service and popular niche products are not enough.

If you have a business with no competitive advantage and can’t think of any reason for someone to buy from you, then you are not ready to start a business.

Also, find out if your products are on Amazon.

In many cases, people or Amazon itself already sells them.

The reason why anyone would leave an already established Amazon with tons of product reviews for you is your competitive advantage.

Tip 2: Continue To Invest In Your Brand

The best eCommerce niches do not have more competitors than demand.

If you find a niche market not already infiltrated by Amazon and other mighty brands, it won’t be long until tough competitors spring up.

Anything that’s successful will be copied.

5. Find Out The Margins to Evaluate The Profitability of The Niche

The end goal for starting an online business is profit-making.

As such, before committing to a niche, you need to know if you will make enough turnover from your niche products.

Choose niche products that have enough margins.

You can get a rough calculation from suppliers of your niche products and your competition.

If similar products are sold at $20, and suppliers sell at $10 per unit, you can say your potential margins can fall between $5 to $15.

6. Test With Ads to Be A 100% Sure It Is Profitable for You

Tip 1: Set up ad campaigns

Test with ads to promote what you are selling and figure out if people are willing to buy from you.

You can send test traffic to landing pages through social media ads to collect email addresses and see what the interest level is.

Depending on the number of impressions, clicks, and conversions, you can figure out if there is enough demand and commercial intent for the niche ideas you’re testing.

Tip 2: Test the readiness of the market

You don’t have to spend so much money on testing your ideas.

Instead, spend time thinking through your offering and strategize towards building a loyal customer base.

Also, use marketplaces or sites like Kickstarter to get a feel for market readiness.

Build your community first, launch with them, and you’ll already have a loyal base, and a tested, tried, and true product.

That’s the way to success.

7. Plan Towards Getting Customers Not Playing At Business

The most important thing is getting your first customers.

Acquiring customers is essential.

To get them, you need to know the platforms they visit, their pain points, how you come in, and how much they are willing to pay for a solution.

These days, most people are on at least Facebook, Twitter, LinkedIn, Instagram, and Pinterest.

That doesn’t necessarily mean you need to be on all.

Your content type, industry, and product also come in place here.

If you sell athleisure, LinkedIn may not help you.

If you send short, actionable content to the service industry, you shouldn’t ignore Twitter.

8. Choose Trending Niches Not Trending Products

When deciding products to sell online, choose trending niches, not just trending products because the use of a product might fade away or be replaced with another product at a certain point.

You can use Google trends to find out which of your niche ideas has a steady and growing trend.

Don’t go for a fad or spike in interest.

In addition to the points above, your chosen niche should have good growth ticks in:

  • Market data or forecast
  • Customer interest and growth rate
  • Search volume

Some of the trending eCommerce niches to build your online business with are:

  1. Baby Care Products
  2. Athleisure
  3. Organic and natural beauty
  4. Men’s grooming products
  5. Subscription boxes
  6. Pet supplies

Bottom Line:

The global industry is expected to net $202.6 billion in 2025 with a  CAGR of about 5%. The US market is booming, taking the bulk or about 50% of all that.

You have a passionate audience in need, and many upsell and cross-sell opportunities in this niche.