We all wish to be able to sell anything that exists under the sun, like AliExpress or other big online shops do. Unfortunately, such shops exist in very little numbers. On the other hand, a niche market is a target you should be aiming for. Why? Follow through to find out.
What is a niche?
A niche is a smaller market that targets a specific audience and provides products in a specific category. It allows you to specialize in one type of product, get to know its audience and potential customers better. You can work on understanding your customers, their
Big or small niche market?
You are probably in two minds between a big niche market with numerous potential customers and a small highly distinct niche with fewer customers and fewer competitors. Before deciding, let’s see what are the aspects of a niche you should consider when finding the right one for you.
Size – for example, Jewelry is a broad niche, Bracelets is a smaller but still not very specific, whereas Zodiac Bracelets is a highly specialised niche.Therefore size is a matter of how specific you want to go.
Potential – here you have to consider the growth potential of a niche, or your potential to grow within it. Another potential is money-making potential. This does not depend on sales volume alone, but also on an average profit you make from it.
Audience – or should I say potential customers. This one is very important. If you do not have anyone to buy your product, you cannot make any profit. It does not necessarily mean it should be an audience great in numbers, if they are passionate about what you sell and willing to spend money on it.
Competition – trendier the niche, greater the competition. Smallest and most specific niches have the least competitors.
Quality – this mostly means is it good enough for you to give it a try. This is more of a personal opinion, not all of us consider the same thing worthy, but when deciding on this keep the previous categories in mind.
Now that you know what are the parameters of a niche, determine yours based on them. First of all, when it comes to size it is just a matter of fact whether you like to go really deep into a detailed and highly specialized or a broader less specific niche. If you are not sure, you can always change this one on the go, you will either add some products to widen your niche or choose to keep only a few, more specific items, to narrow it down.
To get your mind around the money-making potential of a niche, look up the average prices both from other dropshippers and potential suppliers. A good starting point for determining whether there are potential customers is Google Trends, where you can search for keywords and see their popularity over time. This helps you to understand what people are searching for, read, what people need.
Thing is that probably you are not the first person to have the same idea what niche may be profitable, leaving you with competition. That is where you have to think of what size and popularity contribute to competition in a niche. Picture it like this, you have two seas, red and blue. The Red sea is full of fish, but also full of sharks. In the business world this is a high demand, but also a high competition niche. Then, there is the blue sea, with very little fish, but more or less you got the whole place for yourself. This illustrates two extremes – one niche like Jewelry, where there are many customers, but also a ton of businesses selling the same thing, other is for example science themed jewelry, aiming at a drastically smaller audience, but without big competition. There is no one right choice between these two, it all depends on you. But to make your choice easier, and right for you here are some aspects that fit best with one or the other type.
Where to find ideas?
Knowing what your niche should look like is just a step to finding it. There are a few approaches to deciding on the exact niche you want to start business in:
Your hobbies – a good place to start with is the one you are really passionate about. This means that you already understand the audience well, because you are part of them.
Social media – apps like Reddit and Instagram can get you the idea of market needs. Try hashtags and subcategories to explore niches of all sizes and potentials.
Solve a pain-point – many businesses thrived because they filled in the gaps in the market. Spotting the underserved niches is a great way to start a business
Now hop on to stating your dropshipping shop!