After running my online store course for the past several years, I’ve discovered that helping students pick the right products to sell online is one of the most challenging aspects of running my class.
Here’s the catch-22 with niche selection. If you pick the wrong niche or the wrong set of products, you could be shooting yourself in the foot before you even begin. But at the same time, you can’t really start the fun stuff until you know what you want to sell.
The worst situation is when a student comes into the class with a preconceived notion of what they want to sell and their target market is completely saturated and super competitive.
I really hate being the bearer of bad news, but the reality is that I reject 95% of the niches that students come up with because there’s very little chance of success.
The other problem with niche selection is that there often isn’t a definitive right or wrong answer. There are many variables to consider and supply and demand aren’t the only factors.
Your chances for success also heavily depends on how well you can execute. The biggest variable is almost always YOU.
That’s one of the main reasons why I hate questions like
How long is it going to take to make money?
How fast can I launch an online store?
Instead of asking these questions, you really should be asking yourself
How “well” can you launch your store?
How can you add value to this niche?
How much consistent time can you devote to working on your shop?
But just for the sake of argument, let’s say that you’re a reasonably competent person and you can devote at least 5 hours a week towards your business. What’s the most important aspect of finding the right product to sell?
Assess The Demand
First and foremost, the demand has to be there. Most of you don’t have problems in this department because there’s always a tendency to pick commonplace items when you first start out.
For example, if I was given a dollar every time someone wanted to sell t-shirts, baby clothing or wedding accessories, my kids’ college tuition would be paid for.
On the flip side, I’ve also heard some really strange and obscure product ideas. For example, one reader wanted to corner the spanish bullhorn market as a home decor item.
Overall there are many ways to assess demand. First off, you can use the Google keyword planner to find out what people are searching for online.
You can look at EBay completed listings using a tool like Terapeak. You can also look on Amazon to see what is selling and what is not using a tool called Jungle Scout. Finding in demand products is quite simple to do if you know where to look.
Assess The Competition
Once you know the demand is there, you also have to assess your competition and there are 2 aspects to consider. For one thing, you have to figure out whether you can compete on a qualitative level.
Do your competitors have quality websites?
Can you offer a better shopping experience?
Can you offer a larger selection?
Is your pricing going to be competitive?
I’ve met all too many people that blindly go into the niche finding process without even considering who they are going up against. If you can not offer a compelling reason for someone to buy from you, then there’s no reason to even open a store.
The second aspect of evaluating your competition is from a search engine perspective. How strong are the websites you are going up against in terms of SEO? What are your chances of making the front page of search?
More often than not, if there are a bunch of super strong websites on the front page of search, then your niche likely already contains many powerful, entrenched players that will be tough to unseat.
The Most Important Factor
As part of my course, I provide quantitative guidelines on how to evaluate good niches based on the demand and the competition. But sometimes I tell my students to throw all of my guidelines out the window. Why?
The bottom line is that guidelines are just general rules. And the most important aspect of finding the right niche is the ability to provide a unique value proposition for your shop.
If you possess something that your competitors do not or if you can make your shop stand out, then the guidelines, especially the SEO guidelines, shouldn’t be a big factor.
So even if the front page of search is firmly entrenched with big box stores or if your competitor’s websites look absolutely amazing, if you can provide a compelling reason for someone to shop at your store, then there’s a good chance that you can succeed. (Of course your value proposition requires testing and validation)
Incidentally, this is why niche online stores have an advantage over the big box stores. Most larger department stores like Target or Macy’s may have large budgets, but they carry so many products that it’s impossible for them to focus on any single type of item.
Therefore if you choose a very narrow niche and be the best at selling a small category of products, you can easily outsell larger branded shops.
But make sure that you have something unique to offer or don’t even bother.
Finding That Unique Something
The natural follow on question is how do I find that unique something for my business? How do I stand out? The answer lies in your own skill set and what pains you are willing to go through to stand out.
Most people who start an online business focus on “how easy something is to do”.
But if something is easy to do, then it can be easily copied.
Instead of focusing on how “easy” something can be, focus on doing something that is difficult, hard or time consuming. If it’s hard for you, then it’s probably hard for everyone else as well.
Back in the early 2000’s, starting an online store was difficult because there was no infrastructure and no standard ecommerce platform. Therefore, the people who painstakingly created their own online stores from scratch profited the most.
But today, starting an online store is so easy to do that it’s no longer enough to just have a store to sell products. You have to work hard to differentiate yourself.
For example with our store, we carry all of our inventory in house, we import our goods from different countries and we do all of our own embroidery in house.
Sure we could dropship, source our goods domestically and contract out the embroidery but by doing all of these difficult things in house, we are in far greater control of our margins, customer service and brand.
The harder something is to do, the less competition you will have.
Recently, I just attended the financial blogging conference and I met a lot of high quality people. But I met so many finance bloggers that all of their websites started to blend together in my mind.
In fact after I left, only a few websites left a lasting footprint in my head because they offered something truly unique that nobody else had. For example, Stephanie from The Empowered Dollar runs a very memorable site because she painstakingly draws comics by hand for all of her posts.
Instead of writing about your typical dry finance topics like saving for your retirement or rolling over a 401k, Stephanie makes it fun by creating a detailed comic for each post.
Here’s one of my favorites!
Selling Something That Works
So if you are looking to start an ecommerce store or any business for that matter, make sure that you have something valuable to offer. Instead of blindly doing keyword research and looking at your search engine competition, take a very close look at all of your competitors.
Find out what they do well and what they do poorly. Buy their products and figure out how you can improve upon them. Just because the niche you want to pursue is saturated with competitors doesn’t necessarily mean that you should rule it out as long as you can convince people that your products are better.
These days, everyone is so obsessed with how “easy” it is to make money or how “easy” it is to get a business up and running.
Don’t be one of these people!
If something is too easy then chances are that it’s not worth doing in the first place.
There’s always money to made if you take the time to do something that others are not willing to do. If all that you are doing is selling “me-too” products, then you will never make significant money.
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