10 ways Successful Entrepreneurs Identify Hot E-commerce Niches

?With an annual growth rate of?14.2%, the e-commerce industry is booming, experts predict that by the year 2024, online retailers will see online sales reach?$6 trillion.

Even though 93.5%?of global Internet users purchase one product or the other online, the truth is that not all brands on e-commerce platforms find their perfect niche.

An e-commerce niche represents a unique and narrow segment into which a product falls. For instance, fashion is fairly wide, high-heeled shoes is a much narrower niche.

But why do you need a niche? Three reasons;

1.?????Find an audience easier

Choosing an eCommerce niche helps you build a target audience based on the niche’s qualities and the pain points your product solves.

Narrowing down your niche might sideline a few potential customers, but it’s also a great way to increase demand among people who are interested in what you sell.

Micro-niche marketing - finding the narrowest possible niche while still enjoying a sufficiently large audience - has become extremely popular.

When you choose a micro-niche, you can rank your content for related keywords easily, plus, you have less competition and a more targeted audience.

2.?????Fewer competitors

Unlike?dropshipping, which has low barrier to entry but stiff competition, finding an e-commerce niche limits the number of competitors that can attract and retain more of your customers, and when you can focus on that niche, that’s how you become an industry expert.?

3.?????Limit inventory and storage costs

Finding storage space to accommodate new?e-commerce?takes time and money. You may have to account for special storage conditions such as having a warehouse with temperature-controlled areas or FDA compliances for particular products.?

Focusing on a niche lets you optimize your?e-commerce?warehousing space and keep storage costs down.?

Why You Must Niche Down

As people’s interests shift and new products come to the market, niches, just like trends, change over time.

One of the most important question asked mostly on social media, is how to identify and take advantage of a hot e-commerce niche. It’s a truly tough question for budding entrepreneurs who want to experience phenomenal online success.

And the reason it’s a tough question, is because every entrepreneur has different experiences, goals, knowledge and expectations. No two entrepreneurs can choose the same niche; everyone has to choose an e-commerce niche that’s right for them.

Just because everyone wants a new iPhone doesn’t mean you should sell iPhones. In fact, that’s a good reason to avoid the niche, you will face massive competition.

But still there are ways to identify hot e-commerce niches that are right for your business. Here are ten of them:

1. Follow your passion

If you’re not passionate about your e-commerce niche, you won’t get fulfilled working and may give up during tough times.

Entrepreneurship?translates to devoting significant time, resources, and energy to the business.

Lack of passion for the product you’re selling throws your motivation straight out of the window.

Brainstorm a list of things you’re passionate about, and focus on the list when starting your e commerce business.

2. Conduct some keyword research

Your ‘passion list’ should help you dig into some data.

Passion alone can fuel an eCommerce business but if nobody wants what you’re selling, you won’t drive revenue.

Start with a free keyword research tool like?Ubersuggest, search for specific keywords like “dog supplies:” to get more realistic data.

Let’s say you have a search volume of 12,100 and a competition of 1.0. This means “dog supplies” is fairly competitive but has good volume.

3. Check out the competition

Before settling for a specific e-commerce niche, take a keen look at your potential competitors.

If several sites already dominate the space, it might not be a good idea to take them on.

Moving forward means you are aware of what hurdles you’ll come across to gain market share.

Generate some data about your search term using a tool like SEMrush.

You’ll get stats related to both organic and paid traffic.

The section labeled “Organic search results” is where you’ll find your biggest competitors.

From there, you can decide whether you’ll be able to compete.

4. Look for high-dollar options

Many e-commerce entrepreneurs cultivate ways to get over the price-objection hurdle faster. They think that selling dozens — or even hundreds — of low-priced items is the best strategy.

However, that’s not the case, you should instead target high-dollar products.

You may have to conduct more customer education when selling high-ticket items.

Think of it this way: If you want to earn $5,000 per month, you could either sell 1,000 $5 products or just 5 $1,000 products.

5. Assess your resources and assets

Starting a business with assets and resources already in place can beat your competition even before you start marketing.

Let’s say you want to?sell custom Christmas gifts.You can charge more for a custom product, which makes it more lucrative than a one-size-fits-all option.

But to do that, you will need an industrial sewing machine and endless yards of fabric.

?

6. Look beyond category

It’s easy to get blinded by category when choosing an e-commerce niche.

However, a single item can serve many purposes.

Find a new use for something people use daily.

For instance, the Ossic X creators combined headphones and VR to trump huge competitors.

Innovation matters. If you can come up with a new use for something old, you’ll have a built-in market.

7. Start with a problem

Friction often results in fewer e-commerce purchases.

Clear that friction by giving your customers perks like?free shipping, flexible payment channels, and opportunities to share feedback.

However, you can’t start with the point-of-sale pain point.

You need to dig deeper, for each item on your “passion list”, come up with key pain points you could help people solve.

For instance, if you’re going to sell dog food, what pain points might people have?

Maybe they forget to go to the pet store or hate lugging 50-pound bags home in their trunks.

You could solve both pain points by selling dog food that you ship on a regular schedule based on each consumer’s needs.

8. Walk the neighborhood

You never know when inspiration might strike.

E-commerce has become extremely popular, so take a walk (or drive) around your community.

Zero in on the most popular businesses.

What’s working for them? How can you turn their success into an e-commerce store? Can you resolve a pain point and offer less hassle to the consumer?

This is how brands like?Warby Parker?grew out of seemingly nowhere.

Take note of a niche that’s working well in brick and mortar, but that might translate well into e-commerce.

9. Track the trends

Never rely on trends when choosing an e-commerce niche.

Many fads and products fluctuate in popularity without warning.

Instead, go with a niche that shows a consistent upward trend.

Research your options on?Google Trends.

If you’re only going to sell your products to people say in the United States, for example, you can limit the data to the U.S.

The related topics and related query sections can help you with your keyword research.

A holistic data view will help you settle for a perfect e-commerce niche.

10. Define Your Unique Selling Proposition (USP)

Sometimes, a niche develops from the USP you use to distinguish your business.

An easy way to?define your USP is the intersection between passion, strength, and market needs.

You need a?passion?for the product you’re selling as well as for the market you’ll serve. Otherwise, you’ll burn out pretty quickly.

You need strength?to distinguish yourself from your competitors.

What can you offer better than everyone else?

And finally, you need to meet?market needs.

Your specific product and its unique qualities have to attract market demand.

Ideally, your USP should put you in a very small pool of e-commerce sellers.

Wrapping up:

There is no better time to enter the market if you have a budding e-commerce business idea. If you can think of it, most likely there’s a need for it!

By focusing on a specific niche, you focus on a specific market gap, and that’s a great opportunity to scale your business.