Some e-commerce businesses don’t want to place themselves in a specific niche market because they are afraid they will box themselves into too narrow of a group of merchandisers that only specialize in one thing. But the truth is categorizing your e-commerce business into a niche market is often a smart thing to do.
A niche is a particular subcategory of a market that you decide to focus on for your business. It has a little a bit of competition (meaning there really is a market for it) but not too much as it is very specialized. Getting into a niche market is especially useful for small businesses. The main niche categories fall into Health & Fitness, Hobbies, Wealth & Money, Self Improvement, Relationships and Interests & Activities. Keep in mind that your choice of niche may fit into more than just one category. In that case, you could place yourself in more than one market.
What makes a good niche market?
Well, in order to define the niche market that best suits you you need to think about the possibility for your customers to spend their money online. If you are having trouble figuring out which category you fall into, consider the following factors about your e-commerce business:
What obsession or problems do you solve?
Think about what solutions you offer and what problems you solve for your market. Do you provide advice for business owners or families? Do you offer car parts for repairing a vehicle? These types of questions will help you answer the question of with which group you belong. Remember that you cannot sell to everyone. Focus on your target audience by first defining your area or specialty category.
What type of products do you sell?
The type of products and goods that you sell will tell you a lot about your niche. Think about your company as a shopper would. Let’s say you were going to shop on Amazon to find products similar to the ones you offer in your online store.
What category would your products be placed in?
Amazon has a highly developed categorization and cataloging system. You can learn a lot from looking at the groups of products they place themselves in and trying to place your niche within a category.
What target audience do you market to most?
Think about the types of people who are usually your best customers. What kind of people come to you for answers when they don’t know where else to shop? What do they ask your advice about? This can help you to understand who your primary audience is.
What market is selling best?
When trying to fit your business into a particular category, you should look at which types are selling best that your products or services could fit into. The category must be relevant to your company, but sometimes you may have more than one category to choose from that fits your e-commerce business. In this case, you can choose which one you’d like to be associated with based on the popularity of the category.
The Importance of Mastering Your Niche Area
When you are defining the category that your e-commerce business should fit into, you should think about what you are an expert in. Ideally, you should be considered one of the foremost authorities regarding your industry. People should feel that they can come to you for advice about your products and services, as well as general questions about the industry that you represent.
Consider Affiliate Marketing
Think about your personal interest in life and use it to define your niche. Because the market is narrow and customers will know everything about the topic you choose due to the special interest that they will have with your product. So my last advice: choose a products that you know well enough to be able to promote it as an affiliate (plus if you really do it, you can earn extra money by doing so).
Follow your business model
Mark Cuban of “Shark Tank” often says, “You must have a business plan.” He is adamant on this fact and will not consider deals with any entrepreneur who does not have one. Follow Mark’s advice and make sure you have a valid plan of action on where you want your business to go from here. Include details and a general timeline for completion of each goal. Then you can use this as a guideline to follow as you are developing your online store.
Getting good at being an expert in your area of expertise is critical to developing credibility in your chosen industry and category as an e-commerce business owner. Attend online webinars about your industry and keep up with the trends in your field of knowledge to learn more. Even if you have a wealth of information on your industry topics, you can always explore more as new things come out. In the eBook, “Managing and Budgeting Money” by Tony Scott, the author points out that you should budget at least 10% of your monthly income toward education and training of yourself to become better at what you do.
Your customers rely on you to keep them up-to-date on innovations and ideas that emerge in your niche market. If you become the expert in your field, you’ll get more sales and leads because of people who are seeking information in your category.
Holding online webinars, creating live video feeds, and holding social media events can help with this. Additionally, you should send out email marketing newsletters and have a blog of information that offers your target audience something free that is valuable to them.