The biggest challenge for most online entrepreneur is getting started. You could spend weeks or months in order to come up with a profitable idea and could still not get anywhere. Even with guides on getting started, sometimes its just too much information.
You should not over think the whole research process however you also need to have a strategic choice. Without a good balance, you will either take too long to set up your business or run into an unprofitable online business that could empty your resources.Worse, a competitor might beat you to a pulp.
To avoid that there are several tips on finding the right e-commerce niche for you and open your very own online boutique.
- Determine customer interest
Before you create so many business plans, make sure to determine the interest of your target customers. You could set up shop right away and wait for customers to start pouring in, but that will never happen if your online store is filled with products that do not pique anyone’s interest. You will never have a profitable business without knowing your customers’ interests.
So, you need to educate yourself first. Use keyword tools like Google Keyword Planner in order to find keywords with a good search volume. Keep in mind that too low search volume means you will not be able to make money on that niche and too high means you have a good opportunity to make money but will have a hard time competing with old and long-standing brands.
- Analyze the competition
If you have determined which niche you are entering, then the next step is analyzing the competition.
You can check with Amazon for competing products. You are more likely to fail if the product that you are planning on selling is already being carried by Amazon. You can also do SEO research. For any business to be successful, you need to appear on the very first page of Google results. So it would really hard for your starting business if the niche you choose is dominated by other sites. You can use tools like SimilarWeb to evaluate SEO competition.
- Figure out your pricing and margins
There is no point in opening a business if you can’t make money. For an e-commerce business, the product margin needs to be sensible.
Figuring out your margins can be really tricky especially when you are entering a competitive niche. Generally, you may want to look somewhere else if you have a less than 20% margin, especially if you are going to do dropshipping.
Pricing is also an important consideration. Many experts believe that the $100 to $200 range is a good spot. In this range, products are not too expensive and would follow a decent profit margin.