Let’s say that you have now decided that ecommerce is the right business model for you. That’s great! Now it’s time for you to make another important decision, deciding what specific niche you want to build your online business on. 

Your niche is your specialty. It’s what sets you apart on the market. Your niche falls into a narrow category of products you’ll be selling to target the specific needs of a certain group of people. For you to find your identity as a brand or as an online seller in the competitive world of ecommerce, you have to identify the industry and the niche that you want to focus on.

For instance, women’s clothing is a broad category—clothing is a universal need. However, the niche on sustainable and eco-friendly athletic wear is considered much narrower, as it targets specific wants and needs of a certain demographic.

The example above could be considered a potentially good idea for a product niche, but with the nearly limitless possibilities that the internet and online markets provide, you’ll be faced with heaps of possible niches and business opportunities to get into.

It might be a little overwhelming to choose a product niche from the vast multitudes, but it is a necessary and vital step to building a successful online business.


The Importance of Choosing a Product Niche

You may be wondering why you should choose a product niche and sell only a narrow category of items when you could have access to so much more, especially in dropshipping.

While your options may be vast, try to keep in mind that even the big players like Amazon started as a niche-oriented business that only sold books online for years.

Having a niche is especially important for a new ecommerce business because if you target everyone, you might as well target no one.

Your marketing message can’t speak to everyone, so it’s better to choose a niche and an ideal target market who will relate to your products and your business the most. And then, when your online store is on a steady roll, you can take it from there to grow and expand if you like.

Just remember that choosing a niche for your online business is one of the primary building blocks to a solid and profitable online store. It is also the first step you have to take that will help you determine what products you will be selling and to who.


How to Choose the Right Niche

One of the biggest possible mistakes anyone can make with their online business is getting in too fast without proper consideration of the right product niche. This is an important strategic decision that you have to make for your brand to become successful. You don’t want to rush into an unprofitable choice.

Here are some of the things you need to deeply consider when choosing a niche:

Your Passion

This is a natural start. Creating a business and selecting a niche centered on your passion and interest could act as a powerful force that could enable the success of your online business.

Many people dream of finding ways to monetize the things that they are passionate about, and working with your passion can provide you with long term advantages through the ups and downs of business.

If you are passionate about your niche, then the drive to be the best in the industry should come more naturally than if you were working on a niche that won’t provide you the same interest or motivation. You’ll be more likely to abandon a project or niche that you don’t care about. At the same time, you’ll also be working with a target market that shares the same interests as you, meaning you’ll have a better understanding of their wants and needs because they align with yours.

However, being passionate about something doesn’t necessarily lead to the success of your business. Your passion could also be detrimental to your ecommerce enterprise if not as many people share your interest. There needs to be an existing and large enough target market to sell to.

You have to be wary of the fact that your hobby won’t necessarily lead to profitability, and in business, you will still have to take an objective stand and make practical business decisions based on facts and figures.

What you can do to solve this passion vs. practicality conundrum is to identify and list down your interest and determine a niche or an aspect of a niche that can balance passion with real profit, giving you the drive to stick it out and persevere.

Don’t Be Too Quick To Jump In

This is precisely the reason why many ecommerce businesses fail. Popular niches attract businesses like flies, but also have them dropping like flies.

Let’s talk about a niche that performs as one of the highest in terms of profitability— women’s fashion. Sound good? Well, maybe not. It’s not as simple as finding the niche that is making the most money and joining in on the fray.

As it turns out, the highest-ranking niche categories also happen to be a tough road of steep competition. Even if you build a store by narrowing down your niche in selling the hottest summer trends and marketing it with all conceivable strategies, chances are, you might still drown in the torrential waters of your competitors. You’ll find thousands of other sellers to contend with, who just so happen to be selling the same thing.

Choosing the right niche for you may not be about the hottest craze and jumping on it, because everybody is probably on it already, and crazes don’t last. It’s also not going to be about getting into the widest category imaginable and selling everything under the sun.

Instead, don’t be afraid to look for smaller subsets of the larger category. Narrowing down the category will help you stand out and will lead you to a niche with less competition and a narrower target audience to serve. Less competition will help you get on top of the game to dominate your target market.

Do More Research

Now that we have determined that you can’t just jump into the first over-saturated niche you find, it’s time to do some more research.

You can begin your research as you normally would, with a simple Google search on “trending niches” as well as “low competition niches”. There are also many other tools available online for you to track the rise, fall, and stability of various niches using keyword searches. One such tool is Google Trends, which will show you graphs on the peak and decline of people’s interest in a specific niche.

Searching the web for trending categories should yield niches that are wildly popular now and the niches predicted to become profitable in the coming months and years. These are very attractive in that they are brimming with potential, but also attract some tough competition.

Social media platforms like Facebook and Instagram are also great places for you to observe public demand for a specific niche. You have to make sure that you are gauging people’s interests because you can narrow down your niche based on what specific groups of people want and need.

Ideally, your niche should hit the sweet spot by not being too popular, but already has an existing target market that has sufficient interest in your niche. For instance, pet care is a profitable niche in ecommerce, with many pet owners buying accessories and care products for their cats and dogs. Narrowing your niche into something like high-quality, grain-free and sugar-free food for cats can be an option. You have an existing target market and a narrower niche. Or another example, focus on selling grooming and clothing accessories for a specific dog breed like the Pomeranian.

Ask Yourself: Is This Niche a Passing Fad?

Fads are a thing you can pretty much rely on to suddenly skyrocket in popularity, have a short and powerful influence in determining people’s spending habits, before ultimately sputtering out into non-existence and obscurity once again.

Fads seem promising when they are at their height, but in reality, they leave a very small time margin for a business to profit from its success. If you build your business around a fad, then your business will die when the fad comes to an end.

The conclusion here is that you might want to eye a niche that has been around for some time, a niche that already has an established consumer base that has withstood the test of time. If you want to build a brand around a niche, think long term, not short term. Tools like Google Trends can also help you out in tracking the nature of growth and decline of potential niches that you want to explore. It’s a handy map on the landscapes of people’s interest.

Consider the Sustainability of the Niche

When you have determined whether the niche isn’t a passing fad or trend that has withstood the test of time, you still need to consider the future of your niche by considering its possible ongoing lifespan.

You need to ask yourself, will this be profitable a year from now? Five years from now?

These are questions you need to ask yourself about the future of your niche because it is also the future of your business. For instance, according to Oberlo, watches fell into the highest performing niche category of 2018, while The Insider is predicting that analog watches will become obsolete by 2020. There’s no way of telling whether the analog watch, with its traditional clock face—a classic style staple, will be overrun by smartwatches, but these are just the kind of things that you have to consider when choosing your niche.

The sustainability and longevity of your niche is a tough one to consider because no one can predict the future.


Back to You

The niche you ultimately select will define your brand and your online business. It is a crucial choice that you have to make that will determine the success of your online business venture.

To find your ideal niche, you can first look to your passions and hobbies to see if you can make a profit off of sharing your passion with others.

Ultimately, the key to choosing the right niche is in research. You must observe the trends, and find an ideal niche that fits into a narrow category that aligns with the needs of an existing target market that you can serve.

Selecting a product niche to build your dropshipping business requires a little bit of time, thought, and deliberation. We advise that you write all your niche ideas down, do your research and see which one you think is the best in terms of profitability and sustainability.        


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At Ecommerce Pro, we help entrepreneurs and business owners build better and more successful ecommerce businesses. Have a question or a project in mind? Get in touch with us today!

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