If successful business ventures are your goal, you should take a systematic approach and choose a niche that has characteristics that help succeed online.
Why is it important to find your niche?
Niches are parts of larger markets, characterized by unique traits that distinguish them from the broader market, such as needs, preferences, and identities, which is the specialized sector of the market where you want to position your business.
In this short guide, we will explore how to find your niche and identify the products you want to sell in that area. We will also show you how to determine whether there is enough demand for your small business ideas and provide you with some tools to measure competitive pressures in those niches.
How to find your niche in 6 steps
1. Evaluate your passions and skills
Finding your niche begins by looking at your passions and skills. Some questions you should ask yourself include: Are there any topics I feel passionate about? What skills do I excel at? Do I have a favorite hobby?
These are all important factors to consider when trying to find a niche.
Suppose you are passionate about fashion and you are good at styling outfits. You might enjoy creating or sourcing clothing and working with a fashion designer for photo shoots. You can find a niche in the fashion industry by combining these interests and skills.
Or perhaps you enjoy cooking and preparing healthy recipes. You might enjoy selling kitchen tools and writing recipes for your company’s food blog. It would be easier to find a niche in the food industry with these interests and skills.
The key is to find a niche that you are passionate about and have some skills in. This will make it much easier to find a field that you enjoy working in.
2. Look for several different potential niches
Once you have an idea of your passions and skills, start researching potential niches. At this stage, you want to build a large list of niches to assess demand. You will narrow these niches down later.
You can define a niche by:
- Price (luxury, moderate, discounted)
- Quality level (premium, handmade, economical)
- Geography (populations of a certain country, city, or even neighborhood)
- Demographics (gender, age, income level, education level)
- Psychographics (values, interests, trends)
For example, selling trail running shoes is a specialized niche. Trail running shoes are part of the broader footwear industry, and the audience consists of runners, hikers, and nature enthusiasts, who have large communities.
There is no one way to find a specialized niche. But here are some ways you can use to research some niches. Start by searching on Google.
The best way to start thinking is to understand what other online retailers are doing. Let’s use “vegan shoes” as a starting point. Go to the “Shop” section where you can search by type, style, materials, and category. “Vegan shoes” is a niche worth exploring.
From there, you can find plenty of potential angles, such as non-leather unisex running shoes and vegan high-heeled shoes.
Keep searching until you find an unmet problem that you feel you can provide a solution for. Remember that even if you have competition, you can still compete by becoming more specific with your audience and building an effective marketing strategy. Pay attention to your surroundings.
Start looking outward to notice any common pain points. Personal experiences and those of others can spark ideas.
If you’re selling shoes, you might notice that both young people and seniors have difficulty tying shoelaces. Perhaps you are also searching for a specific style of shoes but no one ships it to your country.
Note
Any such problems and be that company that serves a specialized category with a unique solution.
Use Google Suggestions
Have you noticed that when you start typing something in Google Search, suggestions appear before you finish? These are the most requested keywords and queries related to the search on Google. Use them to your advantage to find a niche for your product category. You can enter “best shoes for” to get some ideas. Pay attention to Google suggestions when entering keywords, as there may be specialized ideas you haven’t thought of.
You can also use keyword research tools to check search volume and trends. This will help you identify the most viable opportunities. Look for enthusiastic communities online
The web is very good at organizing itself into communities based on shared interests, passions, and hobbies—in other words, specialized niches. Research the most active forums and listen to their discussions.
Subscribe to tags on Instagram and TikTok, such as #sneakerlovers, and you’ll find opportunities to specialize. Pay attention to tags on popular social media platforms and forums online.
Is there a big enough market?
When looking for a niche, it’s important to ensure that there is a large enough market to support your niche. You should not attempt to sell your products to a group that is too small to sustain your business.
Here are some ways to determine if there is a large enough market for your niche:
- Total Addressable Market (TAM). This is the total potential revenue that your business could generate if it captured 100% of its target market. For example, if you sell a product aimed at women aged 18 to 35, your TAM would be the total revenue generated by all companies selling products to that age group.
- Niche Market Size. This is the part of the TAM made up of your target market. For example, if you sell a product aimed at women aged 18 to 35, your niche market would be a subset of the TAM for that age group.
- Niche Market Growth Rate. This is the growth rate of the specialized niche market. For example, if you sell a product aimed at women aged 18 to 35, your niche market might be growing at a rate of 5% per year.
Conduct market research on your specific niches to see if they are a good fit. You can also input each niche into Google Trends to see the current trend.
For example, you can see below that the topic “vegan shoes” has a consistent demand over the past five years. This would be a good niche to enter as a new business owner. Google Trends can show specific data for your area and global data on search trends for keywords and phrases.
Narrowing Your Niche
Now that you’ve thought of a list of potential niches, it’s time to start narrowing it down. Here are some factors to consider while narrowing your list:
- Do you have any personal or professional experience in this niche? Is this niche something you feel passionate about? Do you have any existing connections in this niche? Is this niche too broad? Is this niche too competitive? Can you envision building a successful online business in this niche?
You don’t have to check all the boxes, but the more “yes” answers you have, the better. If you’re struggling to narrow down your list, try these exercises:
- Take a closer look at the niches you feel passionate about. What are their unique selling points?
- Do you…
- يخلق فرص التعاون. من خلال العمل في مجال متخصص، يمكنك بناء علاقات مع الآخرين الذين يشاركونك نفس الاهتمامات. هذا يمكن أن يؤدي إلى فرص تعاون مثمرة والتي يمكن أن تفيد كلا الجانبين.
your visibility. By focusing on a niche, you can increase your chances of being found by potential customers who are searching specifically for what you offer. This targeted approach makes it easier to attract and retain the right audience.
Profits. Narrowing the field allows you to identify specific groups of customers. If you can show that you are the best brand to meet their needs, they will spend more with you and more frequently.
Let’s say you own a shoe store. You sell many types of shoes in the store. One day, to attract more customers, you add shirts, hats, sunglasses, and jackets to your shelves.
If someone is looking for a specific work shoe or running shoe, will they come to you? Likely not.
Now, let’s say you focus your shoe store to be the number one place to buy shoes for nurses. You sell slip-resistant and durable shoes that provide support all day long. You spend money on targeted advertising and influencer campaigns aimed at nurses. Over time, you become the preferred destination for nurses’ shoes and establish your place in the market.
Examples of Niche Markets
Now that we know what a niche is and how to choose one, let’s take a look at some examples for inspiration.
1. Conscious Consumers
Sustainability has become an increasingly important issue, and for good reason.
Within any product mass-produced, there is a niche market of conscious consumers looking for more eco-friendly alternatives. Over 78% of consumers make sustainability a priority in their daily lives – and they are willing to change their shopping behavior to achieve it.
In the past, companies might have donated a portion of their profits to a cause, but now consumers care about how products are made. In other words, there is a subculture within green living that cares about ethical supply chains. If you’re in this field, take note.
Some examples of products are:
- Beeswax wraps that replace plastic wraps
- Animal cruelty-free cosmetics
- Vegan clothing
- Menstrual cups
? Tip: Avoid greenwashing. Make sure your environmental claims are substantiated. In this category, you can’t be perfect – that’s not how business works. Remember that greenwashing will always backfire on you.
2. Pet Owners
The pet industry alone generated sales of approximately $136.8 billion in the United States in 2022. The market offers many product opportunities concerning different types of pets, lifestyles, and more.
For instance, PupSocks sells personalized socks that you can customize with an image of your beloved pet, and they have hundreds of thousands of site visitors monthly.
PupSocks has exploited a niche in the pet products industry with its pet-inspired products.
Many people own fish, dogs, and cats, but there are also unique pets like horses, lizards, turtles, and even chickens. You can tap into any of these niche markets.
3. Locals
Even the biggest brands in the world rely on local marketing strategies through targeted campaigns. This happens because they compete with a movement pushing consumers to support local businesses.
But if you are selling only online, it can be challenging to establish a local presence. Fortunately, there are ways e-commerce sellers can leverage to attract locals.
For example, Peace Collective was founded around Toronto pride with the slogan “Toronto Against Everyone.” Now, it supports all kinds of initiatives.
Peace Collective allows online shoppers to browse collections based on the cause they want to support.
If you want to sell locally, you can create t-shirts featuring subculture slogans, city images, or local sports team logos, or even sell souvenirs and city guides. The possibilities are endless.
Tips for Finding Niche Products to Sell
While considering different niches and products to sell, there are many important things to consider. Here are some types of niche products you should sell.
1.
Fields That Heavily Rely on Accessories
Merchants rarely make large profits from high-value items and will only earn 5% to 10% from products like laptops and televisions. Where they achieve big profits is through accessories.
Accessories often have higher markups, and customers are less price-sensitive about them. A buyer may shop for weeks to find the best deal on a television, but wouldn’t think twice about spending $30 on an HDMI cable from the same place. However, there’s a good chance that the company made nearly the same profit as it did on the television.
When you choose a niche that has many accessories, you will enjoy much higher profit margins and customers who are less price-sensitive.
2. Passionate or Problematic Customers
It’s amazing how much money enthusiastic hobbyists will spend. Mountain bikers will spend hundreds of dollars on lightweight accessories to shed a few pounds from their bike, and fishermen will invest tens of thousands of dollars in boats and related accessories.
Also, if you can offer a product-based solution to a painful problem, you’ll find an audience ready to buy.
3. The $100 to $200 Range
This range is the “sweet spot” in e-commerce. It’s large enough to create an average order value (AOV) and profit per order but small enough that most customers won’t need to talk to someone before purchasing in person.
As you grow, generating most of your orders online offers significant efficiency savings compared to a phone-based approach. But if you’re selling products costing $500 or more, many customers will need personal customer service before they pull out their credit cards.
4. Hard-to-Find Products Locally
If you need garden equipment, you will likely head to your local Home Depot or Lowe’s. But where do you go to buy surveillance equipment or magic accessories? Most likely online. Choose specialized products that are hard to find locally, and you’ll be able to reach the majority of your customers while they search online.
While you may prefer something hard to find locally, you should also ensure that there is enough demand for the product. This can be tricky, and we’ll revisit this issue in the competition section below.
5. Low-Change Products
If your product range is constantly changing from year to year, you’ll be spending valuable time on resources that will soon be outdated. Selling a limited-change product range ensures that you invest in an informative website that will be relevant for years.
6. Consumable or Disposable Products
Repeat customers are essential for any business, and it’s much easier to sell to existing customers who trust you than to new customers. If your product needs to be reordered regularly – and you can maintain customer satisfaction – you’ll be well on your way to building a profitable business with recurring revenue.
Finding a great product is only part of the equation. Even if there is a niche that meets all the criteria mentioned above, it could be a poor choice in the face of intense competition or insufficient demand. Understanding the demand, competition, and suppliers for the product will be crucial for making an informed decision.
What to Do If You Can’t Find a Niche?
If specialized businesses make it easy to find potential customers and convince them to buy from you, you need to ensure there are enough buyers in that niche to make it viable.
Suppose your target audience is dog-loving nurses in Toronto, and you decide your niche is too small. You might consider shifting to professional dog lovers in North America. You won’t really know what will capture their interest until you try. Narrow the niche, increase profits
Even
If you achieve success early, the fields change, so expect to evolve with your audience over time. You may even introduce new products to your line when new opportunities arise.
Understanding the specific needs of each field makes it possible to speak to them directly in your marketing – you will have a greater chance of catching the buyer’s attention and earning their business by making it clear that your product is specially designed for them.
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How to Find Your Niche – Frequently Asked Questions
What does it mean to find your niche?
Finding the right niche means choosing the best target market to sell to. When starting a business, you want to become the top seller in a particular field to build trust with potential buyers and increase sales.
How can I find my niche?
1. Evaluate your passions and skills.
2. Research
Source: https://www.shopify.com/blog/6187532-dont-follow-your-passion-a-smarter-way-to-find-a-product-to-sell
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