When you’re trying to figure out what type of ecommerce product you want to focus on, you might be tempted to be influenced by Amazon.
After all, they sell a little bit of everything… why shouldn’t you?
Actually, it’s a terrible idea to sell a wide range of products, and here’s why: without the enormous infrastructure and budget of Amazon, you will utterly fail if you try to be all things to all people.
You’re better off finding a narrow niche that you can dominate with amazing products, great prices, and stellar customer service.
Here, get tips on how to figure out what type of ecommerce product to focus on.
Step 1: Identify Your Interests & Experience
It’s a smart idea to sell ecommerce products in a category you’re at least somewhat familiar with. Sure, you may decide to sell men’s sports apparel… even though you hate sports… and are a woman… but you probably won’t do as well as if you chose a niche that you knew well.
Maybe you grew up breeding dogs and know everything there is to know about that industry.
That would make selling dog accessories, food, books, and toys a natural fit. Why? Not only will you already know the brands you believe in that you want to sell online, but you’ll also find marketing to your audience (essentially people like you) a lot easier. (Check out Meet an Entrepreneur Who Truly Eats Her Own Dog Food) for more information on that.)
Action Item: Make a list of industries that you either have work experience in or passion for.
Step 2: Look at the Competition
Once you narrow down your list to a few viable options, see who else is selling this type of ecommerce product.
That’s not to say that if there’s competition, you shouldn’t enter the space; you simply want to get an understanding of who you’ll be up against, both giant retailers and smaller guys.
Action Items: As you look at websites, take notes. What do you like about the sites? What gaps are missing in terms of products or marketing. These are the areas you’ll want to focus on with your ecommerce business.
Step 3: Get Product Quotes
Next, you’ll want to know if it’s even financially viable for you to sell products in a particular category.
With dropshipping growing in popularity among ecommerce sellers, prices have come down, but that means that people are selling products for even less.
So make sure there’s enough profit margin left for you to comfortably pay all of your expenses.
Action Item: Look at all your product fulfillment options, including bulk orders (you’ll save when you buy more product at once) and buying materials to make products yourself.
Factor in labor and determine what your final product cost will be. This will help you determine what you need to charge customers to get your revenue going.
Step 4: Do Your Homework
Now you should be narrowing down your list to one or two ecommerce product niches that really speak to you.
Take a leap of faith and choose one.
Action Item: Now start really digging into the industry. Buy books on the subject. Subscribe to blogs. Listen to podcasts. Follow competition brands on social media.
Essentially, before you open your ecommerce store, you want to be so well-versed in this field that you feel like an expert. That will make it easier for you to know your audience when you start marketing to them.
Step 5: Ready, Set, Go!
Now that you’ve taken the time to understand an industry, assess the competition, and build out your budget, you’re ready to rock and roll.
But wait — there’s one more thing to do!
Action Item: Decide if you’d like to sell through an existing online marketplace or set up your own ecommerce website (or both!).
You’ll be glad that you took the time to narrow down your focus to a smaller niche as you become known for the types of ecommerce products that you sell.