When starting an eCommerce business, our advice is also to start small by selecting a niche ONE product. Starting with hundreds of products at once makes it very difficult to compete with the other smaller and more specialised businesses.
The key to starting a successful business comes down to two things:
1. Finding the right product AND
2. the target market
When choosing your niche, search for successful business in the space in a different area or also on region. The presence of competitors proves to you that there is a market for the niche product in mind. And makes it easier to set up and launch your business.
However, this doesn’t mean that the absence of competitors makes it impossible to launch a business. On the contrary, you might be able to capture a higher percentage of the market share with a new version or a product. However, the process will be more difficult as limited data will be available also.
Another point to note is to avoid any overly crowded niche. Especially if it is dominated by major brands. A possible turnaround to this problem is to drill it down into a more specific version. By targeting the product in a different market if you are so keen.
An example of an overly crowded niche is gym clothing which is now dominated by giants like lululemon and Gym Shark. With such giants in the market, it is difficult to compete with them unless you are bringing something new to the table. What could it be?. Sustainable or recycled clothing might be a solution as you have now shifted to a target market that is more niche.
Focusing on a niche like sustainability opens the door for cross-promoting, acquiring, or affiliating with other sustainability businesses. It allowing you to grow your business and customer base. In the case of sustainable gym clothing, once the business grows you can start looking into expanding into sustainable swimsuits or acquiring other sustainable eCommerce businesses.
Below is a summary of the steps we recommend to follow for the selection process:
1. Brainstorm 10 ideas/products and speak to people in your network (say 5)
2. Get their opinion about the products and select the best three products with the highest number of votes
4. Find market data on Statista or similar to see if the industry sales are growing.
5. Collect data on what the customers are searching for about the product through Answer the Public. Or similar to know what the customers in your area are searching on search engines.
6. Based on the above data, select the product that interests you the most and is backed by convincing data also.
7. Start scoping out your competitors, suppliers, and manufacturers before spending any money. Look at their prices and inventory levels as well to see if they are successful.
Another resource that helps you automatically gather all the required data about your product by pulling data from 1000s of resources is Jungle Scout. Jungle scout costs $49/month and offers a money-back guarantee in the first seven days of the subscription if it’s not the right product for you … Been there, done that.