How to Find the Best Niche for Your Online Business
Entrepreneurs often invest the majority of their time and effort into developing a great product. While quality is certainly an element of success, it shouldn’t be the sole focus of your online business – especially when starting up. In fact, before you even begin developing your product, you must first make sure there’s a niche for it.
Why Does Having a Niche Matter to Online Business Success?
The word “niche” is ubiquitous, but its definition can vary significantly. For entrepreneurs, it’s important to understand what a niche truly is, and the role it will play in the success of your online business.
In the world of marketing, a niche is a specific area which has a distinct set of requirements, customers, and products. A niche product is therefore one that targets a segment of a larger market. Here’s an example: with the rising acceptance of facial hair in the business world, beard oils have become a popular product among the specific niche of consumers looking for grooming solutions for facial hair.
The 2 Ingredients You Need to Have a Successful Online Business
In a way, identifying a niche is a means of assessing demand for your product. Yet, it goes a step further. Not all products even have a specific niche: computers, smartphones, and appliances certainly don’t share such a select consumer base. Yet, for online businesses, differentiation is the key to success. Your eCommerce store will therefore be much more likely to thrive if you’ve identified a niche for your products.
Moreover, eCommerce sellers have a plethora of resources at their disposal to help build interest around their products. Niche products sell well online because merchants achieve a big reach among a small target group and have unending opportunities to educate this audience about their product.
How Do You Find a Niche for Your Online Business?
So, how do you go about exploring a niche for your product? There are virtually countless places to look, but here are a few ideas to get you started:
- Top Sub Categories on Amazon: Amazon uses a hierarchical approach to organize items for sale. For example, there is a category exclusively for laundry baskets, which is nested under the storage and organization category, which is also under home and kitchen. These are called browsing trees, and if you’re able to spot a branch that aligns with your product, there’s a good chance you’ve just found your niche.
- Top-Viewed YouTube Videos: If you think you might be able to pinpoint videos pertaining to your product, go ahead and perform a targeted YouTube search. Otherwise, you can start with a broader topic and sort by views to get niche ideas. For example, if you’ve searched “home decoration” and find a DIY room décor video with 27 million views, you’ve just stumbled upon a crafting niche worthy of your consideration.
- Trending Topics on Netflix: When you consider options for market research, Netflix may not be the first thing to come to mind. Yet, if you’ve ever wondered why the streaming service seems to list oddly specific genres, it’s because there’s actually a market out there for dark Scandinavian movies, exciting criminal investigation TV shows, and other similarly precise categories. How does this apply to your online business? Let’s say you’re envisioning a line of quirky kitchen gadgets. Looking deeper into a category for baking competitions or food documentaries could help you get to know your niche better.
What’s the Best Way to Test Your Product?
Unfortunately, identifying your niche is only half the battle. Once you’ve pinpointed a segment of consumers that could be interested in your product, the next step is to confirm that they’d definitely be willing to pay for it.
To do so, you’ll need to develop a list of prospects. Reach out to your niche through Facebook groups, Reddit pages, and other forums. If you can pinpoint individuals in these groups who are expressing a need for a solution (which your product provides), you can then form a list of prospects you can contact directly.
Next, it’s time to see whether your prospects are ready to purchase your product. There are a couple of ways you can do this: one is to offer a pre-sale of your products before they’re available, while the other is to offer a bare bones product prior to an official launch, known as the minimum viable product. The first allows you to gauge interest without any major time or financial investments, but if it isn’t a feasible option for your online business, the second method certainly has potential, too.
After delivering your product to the beta testers in your niche, collect feedback and refine your product as needed. Continue to connect with other members of your niche, including bloggers, podcasters, and any other trusted authorities in your specific market. Again, the goal is to have the broadest possible outreach among this small group, which will give your online business the greatest visibility among your niche.
