Almost anyone giving advice to eCommerce entrepreneurs will stress the importance of finding a customer niche to market to. Though it’s tempting to skip this step, if you want to make money online, you have to have some idea of what kinds of people you want to attract to your online marketplace. This might sound like it’s limiting your customer options, but it actually gives you a great deal of guidance as far as where and how to advertise, designing your website, and even how to expand your options as your business starts to grow. Finding a niche helps you to define the character of your business, which is a critical step in today’s internet-savvy world. If you don’t stand out, you’re not going to generate much business.
So how do you find a niche? The easiest way is to look at your own passions and interests. If you were going to shop for clothes, beauty products, software services, or whatever it is your online business sells, what kinds of things would you want to see? Have you ever been shopping for something online and thought to yourself “I wish they had X,” or “I wish they sold this product for/in/with X.” Whatever “X” is, that’s your niche. That’s the X-factor you can bring to your eCommerce business to make it unique, interesting, and appealing to a certain group of people. The fact of the matter is, if you have ever found yourself thinking “I wish they had X,” then someone else has probably found themselves thinking the same thing.
In a similar vein, another great way to find a niche is to look at problems in your field or industry that your business can solve. If you’re selling soap, for example, then peruse online forums or marketing data websites to see what customers who buy soap commonly complain about. Look at reviews of soaps on Amazon or other big online marketplaces. Are there any common themes that keep popping up? Pay attention to reviews or feedback along the lines of “I only wish they had this in…” If you can offer a solution to those common complaints or problems, then your products will appeal to a corner of the market that isn’t currently satisfied with the products on offer.
Another way to find a niche is to look at the competition. Find other sites that are offering similar products or services and ask yourself “What is their niche? What kinds of people is this site marketing to?” See if there is some kind of demographic or logistical hole in the competition that you can fill up. For example, maybe most soap-selling sites out there are marketed toward women. If you start marketing to men, that’s a niche market that your competition has overlooked. Or maybe those soap-selling sites are marketing to women using very traditional feminine colors or scents. If you start marketing your soaps in an alternative, feminist, or tradition-defying way, you’ve again found a niche customer base that your competitors aren’t satisfying.
However, before you settle on a niche, you want to determine the profitability of marketing to that specific audience. To continue with the soap business analogy, if you decide that your niche is soaps for men, you’ll want to do a bit of research before you start designing your website. Are there any men out there complaining that they can’t find any good soaps? Are there other websites that have attempted to market to that niche before? How successful were they? Sometimes there’s a good reason that your niche isn’t being covered by the current market. A good niche is a customer base that’s unsatisfied with the current offerings, not a customer base that just isn’t interested in your particular product or industry.
Finally, if you feel like you’ve found a good niche, a great way to determine what kind of market you realistically have is to do a few test sales. Setting up pre-sales, competitions, or free-gift opportunities will tell you what kind of interest is actually out there for your product. If your pre-sale generates a decent amount of buzz, that tells you that there is potential for your product in whatever niche you’ve chosen.