The E-commerce business is a fast-growing world, there are millions of eCommerce stores, based on etailinsights.com there are currently 7.1 Million Online Retailers in the world and 1.8 Million of them are in the United States. Today we will talk about Niches and e-commerce business, what you need to know.
With such a big amount of competition, every e-commerce business needs to find a way to stand out and get ahead in this highly competitive market.
One of the first things to stand out is to find a niche to do it. And we will share everything we know about Niches.
What are e-commerce Niches?
In simple words from big commerce, an e-commerce niche is a distinct segment within any given market and often an area that is overlooked by other businesses.
A niche is often divided into these categories:
- Demographic: characteristics of individuals including age, gender, income, education, etc.
- Geographic: based on customer location
- Psychographic: characteristics of personal thoughts such as attitudes, interests, lifestyles, principles, etc.
- Pricing: similar to income level, from premium to affordable
Let’s take an example, you want to sell clothes, but how are you going to make an impact when there are so many clothing lines? Choose a niche that will make you stand you.
It can be a slow fashion brand focused on baby clothing, or a hand made embroidery t-shirt. The point of a niche is to make you stand out.
Why is it important to have a niche?
First, it will help you lower your cost, the fewer people you have to advertise to, the easier and cheaper it will be to create successful campaigns. Not only you will save money on marketing, but on listing too. Because listing hundreds of products on 5 different channels that charge listing fees isn’t a smart strategy. There is less risk when listing a limited product line that you know will sell.
Second, it’s often the more specific and niche a company/product is, the more loyal customers will be to buying from them exclusively. Rather than trying to serve a mass audience, you can sell the product that a specific audience is looking for. Once you find the right audience, you can expand your product selection to focus on products related to your niche.
And third, you will stand out being different, and standing out can help impact old fashioned word-of-mouth and customers sharing your products on social media platforms. It is all about targeting the right people.
How to Find a Niche?
When choosing a niche, there is so much you can do. But let’s put it into bullet points to understand each.
- Follow your passion: Starting a business in a place you don’t like won’t make you last. Make sure you first understand your passion, what do you like. Besides, marketing your products when you truly understand them and are passionate about is more effective.
- Research: What are the trends of the moment. What are people more interested in? Understand how you can develop in that specific category you are choosing.
- Check the competition: Checking the competition will allow you to understand what is missing from your business and what you can improve. Checking on your competitor is always a good way to make sure you don’t be left behind.
- Assess your resources: What do you have to start? Money to invest, a place to start, can you do it at home? How much do you need to invest? Those are important questions you need to ask before launching and before deciding to start in that niche.
- Look beyond the category and find the gap: If you are passionate about a category you want to start in, it will be easy to locate places lacking with options. You will know from a customer’s point of view what would you want to find and purchase if it was only easier, faster, better you name it. Find the gap!
Pros and Cons of having a Niche
We think there are more pros than cons when it comes to niching. But we can mention some of each to give you an idea.
Some of the disadvantages can be:
Smaller market = limited growth: This can be harmful to your social media because you will have limited growing options since you will be targeting a very specific audience.
Less competitors = lost opportunity to improve: Healthy competition is always good. Being in a specific niche where you have little to no competition is bad for business. If there’s no competition maybe it is because it is not a good niche. Without competition how can you expect to improve, it is possible but it can be harder. Because you will have to wait until you are making a mistake to be able to address what could’ve been improved.
We hope this clarifies what you need to know about niches and e-commerce, why is it important.