Profitable Niche Business Ideas : How to find!
When you take the time to build a quality e-commerce store, you have the opportunity to make a very decent living. And once people figure this out, they get stoked to start building that online shop and watch their bank account grow.
Suddenly, you've got ideas flowing out of your ears, and everything looks appealing and fresh. You have so many industries to choose from and your research proves that it can be done.
But then your world comes to a screeching halt. Why? Probably because the next box on your check list is to pick a niche. And not just any niche – you want one that will bring in the money and make all your hard work worth it.
Finding a profitable niche is much easier said than done and can really hold you back when you’re trying to set up your store. What’s worse is getting it wrong, and spending several months or years putting time and energy into a non-profitable niche.
The good news is we’ve laid out three solid methods for finding a good niche. Here they are:
#1: Find a niche that needs an authority figure
There are many reasons people spend time online, but two of the primary purposes are to be entertained and to be educated. We use Google to research products and gather information so that we can make the best purchasing decisions for us.
When you add value to your products by giving people accurate information and reviews (and more than just a few sentences worth), you'll find that you can gain trust faster, and get people more involved in a dialogue with you.
Here’s a great example from the BBQ Guys.
While they have branched into a few other categories beyond grills, everything they stock encompasses spending the day grilling out. And they offer expert reviews from a BBQ chef that has gained authority within the niche. You can also see they have free shipping, sweepstakes, and basically have designed an outdoor cooking haven.
On top of that, they've made their niche audience clear and easy to market to (which we'll get into shortly).
Now lets look at Amazon’s page with grills:
While it is still good e-commerce, it's pretty underwhelming compared to the BBQ Guys. They don't have the expert reviews and, they haven't developed an authority in the niche.
Most people who just need a grill to throw out back for the summer will go to Amazon and grab one. But if you’re a BBQ enthusiast and serious about your cookouts, then you want to go with products that have a little more backing them up.
When you’re competing with companies like Amazon, you need to stand out and justify why the products you stock cost a little more (if they are more expensive) and why they should buy them from you versus a more mainstream automotive e-commerce site. Becoming an authority is one of the most effective ways to do this.
#2: Gain an understanding of your niche audience
If you find that there is a lack of quality e-commerce sites when it comes to, say, scuba gear, you might see a pretty big opportunity. However, just because you find a niche that needs attention doesn’t mean it’s profitable.
Before you make your decision focus on the demographics of the market and whom you will be selling to. How often do scuba divers buy new gear online? You also need to decide if your audience is even willing to buy it at an e-commerce store. In the case of scuba gear, you might find that people prefer to rent the equipment when they arrive at their destination because it’s a pain to travel with it.
In fact, they might not even be willing to invest in it because they’ve already spent too much money on the vacation itself, and they know they'll only use it once. Now, while this may not be true about people who invest in scuba gear, the point is, you need to explore the spending patterns of your audience.
When you find a potential niche, get to know your audience by focusing on a few of the characteristics listed here:
• They are currently looking for a solution to their problems (your job is to identify the problem and become their solution). • They are willing to spend money for this solution (some niches will have a ton of searches, but an audience that can’t or won’t spend money on it). • They don’t have a strong authority to look to.• They make up a decent sized group of online searchers (remember, you want to find a niche audience that gets online to search for solutions. There are some niches out there that seem great, but no one is looking for them online yet).
You also need to pay attention to seasonal items. Will scuba gear be booming in the hot summer months, but then you end up spending six long months twiddling your thumbs?
#3: Make sure you want to be a unique voice in your niche
There is a scene from the movie The Break-Up where the girlfriend yells at her boyfriend to help her with the dishes. He reluctantly gets up, and she explains that she doesn't want to pester him to do the dishes – but she wants him to want to do the dishes.
“Why would I want to do dishes?” he responds.
To put that scene into the niche context, say you learn that motorized pet food dispensers are very lucrative and single homeowners with good jobs are willing to invest in them. However, you just can’t bring yourself to research and learn about them day-in and day-out.
If you don’t want to do it, odds are you won’t do it without someone else pushing you. And when you do finally wrestle yourself to sit in front of your computer, you won’t add much value to the niche.
To be successful – you have to want it.
If you happen to like pets, you might find yourself interested in their eating patterns and innovative ways to feed them. But if you find you would rather do your daily chores than sell motorized pet food dispensers, then research something that is a little more tailored to your background.
It’s not always about ‘following your passion’
Remember, you can’t always choose a niche based on your passions. You have to find the middle ground between a lucrative niche market and what you are willing to put your time into. Then trust that the longer you’re in your niche, the more you’ll develop a taste for it.
These three steps are just the beginning when choosing a niche. Later in the series we’ll go into more detail about other aspects of the e-commerce world to factor into your decision.
Stay tuned for the next blog post, where we explore the ten biggest mistakes people make when choosing an ecommerce niche.