#01 SELECTING A PROFITABLE NICHE
You can create the coolest, best looking, most exciting online store ever created, and fail miserably if you don’t choose a profitable niche. Niche selection is so important that it can literally make or break your success.
A good niche should:
Have a moderate to large audience
Have low to moderate competition
Have buyers who are passionate about the niche
Have products that are priced high enough to be profitable
You want to make sure there are enough people who are interested in the niche to support a good number of sales, but you don’t want the niche to be so saturated that it’s difficult to make a profit.
You want a market in which the buyers are passionate, or have a real need for the product. It’s going to be difficult to make good money selling ordinary products unless you have a very unique selling point, such as a drastically lower price, or some sort of value added selling point. You want to sell products people will be excited to buy, and that they will keep coming back for.
You want to make sure you have products that can be priced high enough to make you a good product without pricing you out of the market. You probably won’t make a lot of money selling products priced under a dollar, because you won’t be able to build a large enough market quickly enough, but a product priced at ten dollars or more would probably be enough to justify the opening of a store. Of course, there are people who have made fortunes with very inexpensive products, but it takes more volume than a beginner could likely manage.
A good starting point for niche research is to simply make a list of your own hobbies, interests, areas of knowledge, and needs. The more you know about a particular subject when you open the store, the easier it will be for you to source products people would want to buy and to find the right marketing channels to reach your core audience.
Once you have a list of at least 10-20 topics, you can begin to research them in earnest. You want to find out how many people might be interested in each potential niche, how many products are available that you could sell, and how much of a profit margin would be possible.
There are many different ways to do this, but one of the most popular ways is to check Amazon. Start by searching for individual products you might buy in a particular niche. For example, if you want to research the golf niche, search for things like golf clubs and golf balls and find out the bestseller rank for each product. This will give you a general idea of how well each product sells.
You want to be able to find at least a few products selling well enough to be in the top 10,000 in their main category, and in the top 1,000 would be even better.
Here is an example from a live Amazon listing for a particular brand of gold balls:
This product is currently #857 in its main category (Sports & Outdoors), which shows there is a strong market for golf balls, especially when I take a look at other products in the Golf Balls category. The top product in this category is #125 in Sports & Outdoors.
Now, you should be aware that strong demand within a main category might not always mean huge sales. Some categories will have fewer sales than others, of course. But this will give you a general idea if there is a market in the niche.