Niches And How To Find Them
So many ideas…so little time, and money…and time.
As business owners, you have an eye for assessing needs and identifying solutions to satisfy them, but how do you identify a good opportunity vs. a sour investment? In this case the ever popular life advice of “just follow your passion” may not be the most constructive statement to live by. However it’s important not to block out passion completely in the niche hunt...
Die hard hobbyists for decorative spoons or baseball cards still exist, but their popularity has deeply declined over the years. Identifying long term trends and short term fads is a key ideation starting point when searching for a product. In the end, ensuring that the demand and profit is there will be the backbone of your success.
Consumer Passion : Will it sell?
Does the product tap into current trends? Are the people going wild for it? There are a few ways to find out. Google Trends is great for seeing the popularity level for a search term over days/months/years/. Product Review blogs identify safe and experimental products that have failed or succeeded (TrendHunter), but my favorite are sites that indicate “Sell Through Rates”. These tell you how often the term is searched, product is clicked, and ratio of click-to-buy. A great source is TeraPeak, which analyzes Ebay’s product inventory.
Value : Solves a Problem?
This could either be a solution you’ve come across or have seen demand for. Looking at FAQs or review pages for similar products/companies can be a great resource for seeing what people aren’t getting in a product.
Pricing : Strategy and Profit Margins
Just yourself in the company? You may want to stick to products priced around $30–100 per unit. At this price point, customers are more confident in their purchase; $200–500/unit will invite more inquiry about the product. The last thing you want to do is put pressure on your customer service if you can’t handle the volume. It’s key to create a trusting, well designed site with access to help if they need it.
Will They Buy Again? — One Time vs Recurring
Selling a branded line of boutique travel kennels will most of the time, sell fewer units than a small plush or treat product, but that doesn’t mean that profits will be lower. It’s important to remember that just because a product has a lower profit margin, doesn’t mean it’ll lose out to a product with a higher one. Dogs can go though treats and toys pretty quickly…
Yearly or Seasonal Purchases
Mainly, just be aware. Going into a niche knowing if it’s seasonal or year round is key. Some are inherently seasonal, others can be identified via Google Trends.
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