You might have thought about starting an online business to earn passive income but you are not sure what to sell or maybe you have already started one but you have not been very successful at your venture and you asking yourself what went wrong.
Today’s markets are very saturated with online businesses mushrooming all over the internet. Consumers have many choices and became very sophisticated about the price and the quality of the product they are looking to buy. This shift has made many businesses struggle and led to the closing of thousands of shops on the high street.
Choosing a niche product has never been more important for your online store. Choosing a niche product will put your online store in the driving seat when it comes to marketing and sales. When it comes to selling, you need to be specific about which customers you want to sell to online. As a business you need to put yourself in the position of your customers and ask yourself why I should buy this product from your online business and not from a competitor.
So how do you identify a niche product?
A niche product is identified when customers look hard and long for a product to buy and they do not find other alternatives. In simple words, a niche product is a product that is sought by customers but not to many merchants offer it.
Entering A niche market is excellent strategy if you want to build your online store because it makes so many things much easier. A niche product will have niche search keywords that are easy to rank for on the search engine making the process of customers finding you online much easier.
A niche product puts your online business in a strong position because it makes customers look for you rather than you look for them. It also offers higher profits as you can set your prices more freely than competitive markets.
You can follow the following steps to identifying your niche products:
Identify a problem/need
Identifying a need is the first step to finding a niche product. You might be asking yourself how to identify a need in the first place. You can do that from personal experience in dealing with others or at work or on online forums such as Reddit or Quora where people meet in groups to discuss issues.
Find the solution to the problem/need
Now you have identified a need, you can find a product that satisfies this need. You can use technology to satisfy a need or solve a problem.
Create a product
Create your product from scratch or buy it from a supplier if it already exists.
- Verify your concept by conducting market research on existing competition if it exists.
- Look at your potential customers and get their feedback.
- Set your prices in a realistically.
- Start your online store on an ecommerce platform.
Create a marketing strategy:
Before launching your business, create a clear marketing strategy that includes the following items:
- Identify the customer that you want to sell to: this includes their geographical distribution, age group, income and preferences. It is easier to identify your target customer online when you are a niche because you have been specific and not generic.
- How to reach the customer: you have two choices either create paid marketing campaign or follow and search engine optimization “SEO” strategy. A paid marketing campaign could bring quick results but it costs more than SEO. SEO takes longer but once you establish good ranking with Google, you will start to get traffic for free.
- Keyword research: search online for your niche keywords. When you are a niche you will find that you have less keywords to target but these keywords will have higher buyer intent to buy.
- Use your blog to create niche content: blogging about niches is a great way to get traffic for customers that are looking for information before they buy your product.
Examples of Niche markets:
- Vegan meat:
The Beyond Meat is an example of a niche market that has a few competitors. Beyond meat is an innovative company that saw a need in the market for a vegan population to serve. Their meat is just as tasty as lamb or beef but it is made with plant. Beyond Meat concept is very simple that there are many people feel guilt when they eat meat and kill an animal.
Their CEO massage is very simple:
The company has managed to address a niche market that want to sustain the planet and not feel guilt when eating burgers.
The exciting thing about Beyond Meat is that you can buy their product to re-sell it online so this could be a great business opportunity for your online store.
Grammarly is a software company that offers digital writing assistant tools for people who their first language is not English. Grammarly opens the door for writers from non-English speaking countries to work in translation as a freelancers and earn their living. So if you have an online business idea and English is not your first language you could work as a freelancer using Grammarly to gain confidence.
Lefty’s is a store that specialises in selling items for left handed people. They specialise in a niche market. Their online store offers everything from jugs, scissors, mugs, can openers for left handed people.
They have addressed a real problem in the market by offering the left handed community a solution to their needs. You could re-sell their products if you are thinking of starting your online store.
- Bompas & Parr:
Bompas & Parr has unveiled their first London ‘Vegan’ hotel suite. The suite is located at Hilton Bankside Hotel where its furniture is completely free of leather, wool and other materials that are considered not sustainable. Instead Bompas & Parr has the created the bedroom, setting area and bathroom from a vegan material called Pinatex. Piñatex is a vegan-friendly fruit leather made from the cellulose fibres of the pineapple.
Everything in the suit from floors to beds have been made using plant-based materials.
Bompas and Parr really opened the door for a new niche market for people who are concerned about using unsustainable resources.
Karshare is a UK company that allows people to let cars to each other. it is basically the Airbnb of the car hire industry allowing everyone who owns a car to make a passive income. the company makes hiring a car a community based activity. this market has long been in the hands of big car hiring firms such as Europcar and Zipcar.
When COVID 19 pandemic hit, the company offered its services for free to doctors, nurses and NHS staff. The pandemic made it completely perfect for the company to kick-start its business as people felt less safe to travel in buses and taxis. They also earned very good reputation for helping out the community during their time of need with many people became suddenly unemployed, their private car became their only source of income.
Scooters are a handy way of moving around busy cities quickly. They became very popular lately for office workers who want to make the journey between the station and the office quicker.
There is a very big market for scooters amongst young people who live in big cities and kids who want to play in the park. Thanks to advancements of battery technologies, Scooters became commercially viable for merchants who want to start online business in this niche product. It is estimated that the scooter market is worth $20bn in 2020.
The pandemic gave scooter market a very big push as people want to avoid getting on public transport. scooters have the advantage of being environmentally friendly as they do not emit greenhouse gases.
- Electric Bikes:
Electric bikes have become very popular recently with people who live far away from city centres as a medium of transport to avoid crowded trains and buses and save big money on train tickets who keep going up.
They are very fast compared to traditional bicycles. They are environmentally clean and good for your fitness. The government has introduced schemes to help people buy bicycles. Many other finance providers have offered interest free credit on bikes. they are definitely a good candidate for anyone who wants to start an online business in a niche product.
It is estimated that annually there are approximately 50,000 to 60,000 electric bikes being sold in the UK annually.
- Shared office spaces with childcare:
As remote working became the norm, shared office spaces are here to stay with many people are finding it difficult to work from home for parents who have kids. There are many companies who started shared office spaces to solve the need for a safe and quite office space away from the family home.
Some shared office companies realised that there is a need for your parents with young kids not yet in school to offer shared office space with childcare during certain hours to free up time for parents to work productively.
Shared office spaces are offered on a Pay-As-You-Go basis and you can book online at any time. Cuckooz Nest is an example of a company that offers this great service for young working parents with kids at a very reasonable rate of £14 an hour. You can also sign up for a fixed monthly subscription.
This is a truly niche product for anyone who want to start an online business and provide a great value to parents.
RS Bike Paints is a company that specialises in the bikes and scooters’ paint product niche. They have in their database 45,000 paint colours covering 160 brands. Customers can use their website to choose their car’s make, model and year of manufacturing and colour. RS Bike will send the customer paints matching to the original colours which is very unique. There are not too many companies that serve this niche market.
The company’s customers are a mix of individuals, body shops and main dealers. The founder, Phil Allen, says that “It’s a niche market that’s about an inch wide, but a mile deep.. Nobody else does what we do” All paints they provide to customers are hand mixed and normally dispatch within 72 hours so if you want to have a totally bespoke colour then that is absolutely possible. All customers can pay online.
It is estimated that the car paint market size was around $9bn in 2018 so if you are thinking about entering this market it is a very lucrative market.
Starting an online store is not easy if you do not find a niche product. finding the right product for your online store is the key to your success. As the saying goes “The Riches are in the Niches”