E-Commerce: Find your niche
Shopping online is a trend that is here to stay. For those who are looking to explore the idea of starting an online business, the first thing you need to do is come up with the right niche.
In 2021, there were more than $2Billion digital buyers, which was nearly 30% of the global population. The expected sales is expected to be over $6trillion by 2024. In 2020, Canadians generated $52.46Billion of online purchases.
The online space is busy! To cut through a noisy marketplace, finding a product or service that focuses on a specific audience or market will help you identify the ideal customer, what they need, and what you can offer to them. This helps to streamline your business and focus your marketing efforts.
What do you want to sell?
When you are looking to start an online business, you first need to think about what you want to sell. Here are some questions to help with generating ideas.
Is there a problem that you can solve?
Would you like to follow your passion or hobby?
Is there a large group of enthusiasts that need a particular product or service?
Do you have expertise in a particular area that you can leverage?
Are there trending products that you want to sell?
For those who are interested in following their passion or expertise, look to your own industry or interest groups for gaps in services or products requested by your customers. Maybe you know that your expertise is in demand and you know people will pay for it. Or, perhaps you see a problem and you have an idea for a solution. With some expertise and market research, this idea may be something you want to turn into an online business.
Maybe you just want to create a simple e-commerce website and sell a product that is trending. Some e-commerce platforms and solution providers may provide reports on what is trending in their customer’s stores. Or there may be independent research available. For example, this 2022 e-commerce research shows that pet products, subscription services, re-Commerce, eco-friendly products and others are popular.
What are people searching for online? Google Trends is a place you can go to for information about trending searches. Once you find a product or service idea, be sure to identify your niche.
What is a niche?
A niche is a specific segment within a given market. For example, you may want to sell shoes. Shoes are a broad market. A niche within this category may be running shoes made of recycled materials.
Finding your niche helps your business stand out, so your customers can find you in a noisy marketplace.
How do you know if you have the right niche?
Here are some guiding questions to ask yourself to see if what you want to sell has the potential to make money and is the right business for you.
Some of these questions require you to consider your personal goals and others may require some research. Other questions may not have answers right away, but you should keep them top of mind as you write your business and throughout the first few months of your business. Every business has some level of risk, and some more than others. Be honest with yourself and do your homework. The more research you do up front will help you understand and minimize certain risk factors.
Is there a place in the market for my product/service?
Do I have the skills and resources to launch this business?
Can this business make enough money?
If it works, how big can this get? (Potential - scalability)
What are the chances this business will work? (Probability
Does this support my personal interests, values & vision? (Proximity)
Next steps: Plan for success
There is a lot to consider when starting an online business. Just like starting any business, doing ‘your homework’ at the beginning helps to see if your initial business has to potential to make a profit and if it is the right business for you. Next step is to develop your idea and create a plan for your business.
