How To Conquer eCommerce Through A Niche Market

By Team AmeriCommerce - Updated On 2/6/2020

One of the earliest and most fundamental decisions you'll make when you decide to take the plunge into Ecommerce is simply, 'what should I sell?' It's a question that sees many potential entrepreneurs fall at the first hurdle.

Of course, it's possible to simply begin selling mainstream products and grab a piece of those established markets. But it's often much smarter to identify a suitable product niche in which you can excel.

Niches are essentially small, nuanced market segments...and finding the right one can deliver a bunch of great benefits:

  • It's easier to identify and target potential customers.
  • There's significantly less competition.
  • It's easier to drive organic and paid traffic to your website.
  • And, since your users are generally looking for something pretty specific, this traffic often converts well, too.

But how do you find a product niche that works for you?

1. Start with something that fits you

Mark Cuban ruffled a few feathers when he called following your passion 'easily the worst advice you could ever get.' But, while we wouldn't recommend choosing a product niche solely based on your own passions without validating the idea first, it can be a good starting point.

After all, selling online should be a source of enjoyment as well as extra income, and choosing an area you already know a little about can be a great head start. It can greatly diminish your learning curve and help you identify hidden angles and opportunities.

Take a look at your own background – your experiences, skills, interests and hobbies. If anything stands out, make sure to validate the idea with rigorous research before going any further!

Equally, remember that you can be just as successful in niches you were previously totally unaware of, so don't worry if nothing stands out at this point!

2. Establish your point of difference

By definition, niches are all about specificity, and points of difference. It's important, then, to identify at an early stage exactly what makes you different. The best niches are all about identifying needs or opportunities, and delivering products that others can't (or won't.)

Whether it's your price point, product quality, personalization options or any other factor, niche marketing requires you to be different! This gives you the best chance to access untapped markets and differentiate yourself from the competition.

WordStream's Keyword Niche Finder is a great tool for generating a bunch of different ideas to explore further. You just enter a keyword and hit the 'Find Profitable Niches' button. This generates a list of hundreds, if not thousands, of potential ideas you can investigate to see if they're viable.

3. Identify your customer

Niches are generally targeted towards very specific customers. It's vital that you zone in on exactly who this is – creating buyer personas can be a good way to do this. Some factors to consider when identifying your target customer are:

  • Demographics – factors such as age, gender, location
  • Problems and needs
  • Spending power – this ensures you can choose a niche with products that are appropriately priced
  • Online/search habits – this makes it that much easier to know how you can reach them and promote your brand and products

4. Assess the Market Size

By definition, niche markets are small – but it's important that they're actually viable. You don't want to limit yourself to a niche that is prohibitively small and has little potential for growth.

Before you commit to an idea, make sure to do adequate market research. There are a number of ways to do this.

Keyword Research is a fantastic starting point. You can use Google's Keyword Planner Tool to generate ideas. This tool allows you to order keywords by how competitive they are, how often they're searched for by users, and the suggested bid price for PPC campaigns. This will help you gauge how much potential traffic you could expect from a particular niche.

It's often a good idea to go after long-tail keywords. These are keywords with a lower search volume, but which are typically much easier to rank for on search engines. They also tend to convert higher than other keywords, simply because they're so specific.

Google Trends is another useful tool. This can help you identify whether your market is growing or shrinking based on how often keywords have been searched for over a period of time. In other words, you can identify markets that are genuinely growing vs. temporary fads.

5. Brokerage Directories

Brokerage listing sites, like, are a great place to look for potential niche product ideas. Head to a website like BizBuySell.com and select 'Websites For Sale'.

You can also do some market research based on the revenue and valuation of these e-commerce websites. Some properties are even listed for sale by owner. In these cases, the owner will often post the website url and whether the products are drop-shipped or stocked. In many cases, a nicer website and a little bit of work could make for a successful start-up selling products you have researched on brokerage directories.

6. Check out the competition

It's always a good idea to make sure to do your homework on your competitors. This involves checking out which stores are already ranking for your chosen keywords and assessing which other products are already available in the market.

This is a good chance to assess what others in the field are doing well and identify any areas you could improve and do better.

7. Make sure it's commercially viable

We all want to make money through selling online rather than losing it! It's crucial, therefore – however appealing and untapped your niche is – that you make sure your numbers add up and make you a nice profit. This involves answering questions like:

  • How much will it cost to buy or manufacture your product(s)?
  • How much do similar products sell for currently?

There are a number of good places to look for products at wholesale prices – Alibaba and Made-in-China are just two! This will help you establish product availability and cost prices. The rest comes down to market research which will help you establish what is the going rate in the industry and how much you can realistically expect to make from each purchase. Remember, the little costs can eat significantly into your margin, so make sure you take a thorough, holistic approach here!

Closing Thoughts

Identifying the right niche as an ecommerce entry point takes no small amount of research and hard work, but it can be a great way to really make a splash in a particular market, which otherwise might not be possible.

About the Author

Team AmeriCommerce

We're a bunch of nerds, a few cat people, several musicians, numerous gaming addicts, countless beard aficionados, and possibly a hipster or two. Since 2005 our team has been building one of the world's most powerful E-Commerce platforms designed to do stuff other platforms can't.

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Comments
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2
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Ali4445
October 31, 2014 4:37 PM
Very good advice. It's not enough to WANT to sell. It really does have to be a researched decision, and finding a niche where you can shine is an important part of the process. Thanks for sharing this info!
Keri B
October 31, 2014 11:09 PM
So true! The importance of finding a niche isn't just true in ecommerce, it's true in many fields. In any situation, though, finding a niche can be the hard part. Sometimes you may happen to have an interest that naturally coincides with a niche market -- but sometimes you may have such an interest and not even realize it. Really, in my mind, the hard part is finding the appropriate niche. Excellent post and thanks for the great info.

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