Why Choosing Your Niche Wisely Is So Important in E-Commerce

While the overarching purpose of your ecommerce store is to make sales and drive profits, the secret to success will always lie in providing consumers with what they want or need at any given time. This applies to everything: from the message you convey to the products or services you offer. But this is only half the battle.

To be able to capitalize on consumer needs, you will have to show them that not only do you have what they’re looking for, but that you offer something better or more valuable than your competitors.

This is where choosing the correct niche for your ecommerce business comes in. By refining your niche, you narrow your target market, making it easier to pinpoint your marketing, and appeal to the relevant demographic. Furthermore, the more specific your niche, the fewer direct competitors you will have to face, as many businesses within your industry will have a more generic offering, or a different specialty.

What Makes a Good Niche?

It is not enough to simply choose a highly specific product to sell. After all, if there is no market for it, you will struggle to make sales, even with no direct competition. The trick to finding a profitable niche is to target specific groups within the existing audiences for sought-after products or services.

For example, GreenExamAcademy offers resources and study guides for people preparing for Leadership in Energy and Environmental Design (LEED) exams. This is a highly targeted niche, but one with enough interest, and little enough competition to draw in a good amount of traffic.

Sites using broader niches include Spear America, a diving and spearfishing supplies store for free-divers in America. While this is far less targeted – as spearfishing is already a niche sport – with equipment that lasts a long time, over-specializing could have made the site unlikely to be found.

For your ecommerce site to succeed, you need to find a balance between competition and demand. After all, it is worth doing a little extra work to rank for a slightly more competitive niche if the likely return on investment is significantly higher.

Lower Marketing Costs

Zeroing in on a niche is also a great way to bring down your marketing costs. Not only will you need to reach a far more select market, but you will also have fewer businesses to compete with for rankings and ad placement.

Related reading: Grow Your Online Business With Savvy Marketing Strategies.

In addition, since you’re relying on targeted searches to guide users to your website, your marketing efforts should be focused more on improving your site’s searchability and optimizing your web design to make it clear to visitors that you sell exactly what they need.

Web-flipping sites like Exchange also offer opportunities to take on an existing store that fits your chosen niche, or to seek inspiration. The benefit of this is that you’ll have a pre-established audience and a body of content to work with before you start.

Even so, whether you start your e-commerce business from scratch, or decide to flip an existing website, you still need to do your research and determine whether there is sufficient potential for the niche you have selected.

Build Better SEO

A well-defined niche presents some great opportunities to boost your page rankings with intelligent key-wording. Investigate the keyword trends for your industry, and look out for potential competitors. If there are already established businesses that have cornered the market for your chosen niche, you may struggle to compete with them.

In contrast, if you find a gap in a popular industry, where users are following specific search queries to more generalized online stores, you may be able to rank with those key phrases. This also gives you some direction for your brand message and content creation, as you will be able to build your copy around your chosen niche and its associated keywords.

The added advantage here is that users who search for a more specialized item are often closer to a purchase decision than those performing more general searches. This means that once they find your website, you have a greater chance of securing their business.

Opportunities for Cross-Selling

A well-chosen niche is one that enables you to gain all the benefits of targeting a very specific market, while still allowing you the opportunity for wider sales. For example, if you sold “left-handed tennis rackets for children”, the chances are that you would also sell other tennis accessories, and perhaps even additional sporting equipment.

For example, although its niche is medieval armor and weapons, The Knight Shop also sells modern fencing and HEMA supplies, LARP equipment, and mead. This works because many of the site’s customers are likely to have crossover interests with these related items.

This also means that while your niche allows you to be found far more easily by a very specific market, you still have the capacity to appeal to others outside that demographic. In addition, as you offer the specialist item they were searching for, your target market is more likely to extend their purchase to related items they need at the same time.

Your chosen niche will affect every aspect of the design and branding of your ecommerce business, so it is vital to choose carefully. In addition to the factors mentioned above, your niche needs to be one that you feel comfortable working with. If you have no knowledge of or interest in the product or service you offer, it can be a lot harder to dedicate yourself to making it a success.

Finally, once you have established your niche business, it is important to be patient. Do not give up if you do not instantly see a high volume of traffic. These things take time for any business, but you have the advantage that your customers are more likely to make a purchase.

In the meantime, keep building your niche, creating high-quality content, and targeting your marketing efforts. Before you know it, your business could be a booming enterprise, branching out into other niches as it grows.


Victoria Greene is an e-commerce branding expert who loves to help niche businesses grow online. She’s also a freelance writer and runs her own blog at victoriaecommerce.


This post may contain affiliate links.

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