As business advisors, it’s a given that we’re attuned to the fluctuations and changes that happen within business sales: it’s our job to monitor which industries are performing, and which industries remain stagnant.
With that said, it takes no special expertise to identify the fact that Ecommerce is booming. In the last couple of weeks alone, we have advised and completed on multiple Ecommerce businesses, including Sock Box Ltd and I Love My Pets.
While the Ecommerce explosion has been in-line with our analyses for a while now – for instance, our Small Business M&A Report was largely focussed on the way that the pandemic expedited a transition to digital business models, it’s also perfectly clear to anyone with access to a local high street.
By this measure, it’s also true that many an eager entrepreneur and business owner has jumped head first into the Ecommerce sector, misguided in their belief that any venture related to online sales is going to be profitable and worthwhile.
Ecommerce – Big Numbers but Big Competition
While it’s true that Ecommerce represents big bucks, it’s also monopolised by industry giants. Merely making the move to digital isn’t going to be enough to identify an audience and to differentiate your products.
According to Similarweb, Amazon.com receives roughly 2 billion visits per month, and eBay roughly 1 billion a month. Undeniably, these two sites dominate Ecommerce for many consumers around the world.
Due to last year’s tweaks to Google’s algorithm, these giants have also been further prioritised in the search results, making it even harder for the countless smaller Ecommerce outlets to gain any digital traction.
So, what’s the best approach for anyone looking to start an Ecommerce business? The answer lies in identifying a niche – one that will make your online shop a destination in itself.
What is an Ecommerce Niche?
Simply put, an Ecommerce niche is a distinct segment of a market, in an area that is often overlooked by other businesses. For instance, you’d be hard-pressed to find certain vintage or antique pieces on Amazon. Other examples of niches include handmade goods, pet food, eco-friendly and sustainable products, or trending ‘hot’ products.
By refining your intended market, you’re able to focus on product lines that have potentially been overlooked. And when you discover these niches, you increase the chance of building a business with a strong chance of succeeding. You won’t be subjected to the same level of competition and can profit from the areas that have been neglected.
Why Else Should You Go Niche?
What’s more, is that as you will likely have a smaller target audience – by definition, there will be fewer people interested in your product, you don’t need to try to advertise to everyone. This will in turn make advertising more affordable. For example, when paying for targeted ads, you’ll only have to get seen by a specific demographic.
The chances are, you’ll also appeal to a more loyal customer base. The more specific a product is, the harder a customer has had to look for it, or the more likely it is to be tailored to their personal needs. In turn, they’ll be more loyal to the brand, and often likely to buy from you exclusively.
In addition, when it comes to marketing your business, you can partner with influencers who operate within your niche, helping to drive traffic to your online store, while also adding credibility to whatever product you’re promoting.
How to Find a Niche?
The first thing to do is to look at current trends. For example, Google Trends is an effective way to examine the search habits of large groups of people. In addition to Google Trends, some other great tools include Semrush and Buzzsumo, with each adding useful data to act on.
By extension, keyword research can also help to identify a niche – tools like Google Keyword Planner and Keyword Keg can identify popular search terms, or even adjacent search terms that have less competition amongst other businesses, and therefore more potential to be utilised into your own niche.
Ultimately, paying attention to search engine optimization and keyword terms can give you unique insights that you just wouldn’t be able to ascertain from other types of market research, such as drafting user personas.
Alternatively, you can just focus on the sorts of products that you’re passionate about. It’s hard to run any business that is based on something you don’t really care about and sometimes all it takes to find a niche is to take an inward look on the sort of product that would make your own life easier.
Being passionate about something arms you with the knowledge that your competitors (if there are even any at all) don’t have. It allows you to create better content around the products and also better longtail content for blog posts and the other content that Google likes to see on a site.