Ecommerce has grown so much in the last 5 years; admittedly Amazon has done most of the driving but there are many thousands of other sites that have followed in their footsteps.
Ecommerce has moved so far and so fast that we are now seeing it jump from the realm of the desktop PC to the mobile world through smart phones and PDA’s, this new incarnation of the web is bringing ecommerce even closer to competing with real world retailers. It’s an exciting time to be involved in the many industries that are blanketed by ecommerce.
The best place to start is at the beginning and for me that’s finding the right niche.
There are 3 different sets of criteria that need to be met before I will move any further into researching and launching a new site.
- The Niche itself, is it main stream or is it a tiny industry that isn’t well catered for.
- The competition, How strong is there web presence, how well are they thought of in the industry.
- Profit, how much can I make.
Finding the Niche
Finding a niche isn’t that hard to do, there are literally millions of them out there. One of my favourite places to get some ideas is on sites like Flippa, the really great thing about flippa is that the sellers will post all of the information about their site, including profit, where their traffic comes from and how they fulfil their orders.
Because most of the sites listed target America I can take that model and target the European countries. The Google AdWords keyword tool will give me a rough idea of the popularity of the niche and how diverse the keyword set can be.
Since we’re are still in the early stages of choosing a niche so I don’t spend a great amount of time digging into the possible competition, a quick link search and a rough calculation of how many competitors are currently operating in that marketplace is all I focus on for the moment.
A good place to get a quick idea of the strength of your competition is to use the Google Adwords keyword tool.
This is where the beauty of Flippa comes into play, many of the sites post their profit along with running expenses and their profit margins. Also if I think a niche has potential I will buy a copy of the top 3 company’s annual turnover and calculate 10% of the total turnover and that would be my target for the first year.
Those are the 3 biggest things I look at but here is a quick list of the other things I look for in a niche:
- What would the likely target audience be, are they internet savvy and do they have a credit card.
- Is your niche well publicized, how difficult would it be to prospect for linking opportunities.
- Is the niche growing or declining.
- What need would you fill, are you catering for a hobby or an interest, is what you plan to sell a necessity or a luxury item. (Luxury goods aren’t selling so well these days).
- Is there an off season or is there a year round demand for the products.
- Do your competitors offer affiliate programs? Join one and send them some PPC traffic and see how it goes.
Before you can fully commit to launching an ecommerce site, you must be under no illusions that it could take years of hard work before you will see any substantial results.
With that said if you have done your research properly and are committed and determined enough to see things through to the end, then you will have a profitable and successful web business.