The key to building a successful e-commerce website is finding the right niche. You could be offering high-quality products at great prices, but if your items aren’t in demand, or you’re facing too much competition, then you’re not going to be very successful.
But how exactly do you know if a niche is trending? And how can you tell if a niche’s popularity will be long-lasting, or if it will eventually die out?
Keep reading to learn how to identify the best niches for your e-commerce website, as well as some tools you can use to find profitable products.
Why is Finding the Right Niche So Important?
The Impact of the Pandemic
What are the Indicators of a Good Niche?
Tips for Finding Profitable Niches
Examples of Niche Sales Trends
Sounds good? Let’s dive in!
As a new seller, you’re number one priority should be to avoid competition. No one knows who you are, so if you’re trying to compete with well-known names or entering markets with lots of other sellers you’re going to have a difficult time.
Your best strategy is to find a profitable niche that not many other sellers are taking advantage of. Ideally, you want to identify products that people have a need for and that few other businesses are offering.
That way, it won’t matter if buyers aren’t familiar with you. If you have what they need and continually provide good service they’ll be happy to buy from you.
If you’re considering starting an e-commerce website in 2020 then you need to consider the impact that the Covid-19 pandemic has had on buying habits.
First and foremost, growing concerns about being out in public have resulted in a boost to e-commerce sales. Revenue from online sales is up by 71% compared to before the pandemic, making this an excellent time to start an e-commerce store.
But that doesn’t mean you’re guaranteed to be successful. Shopper’s needs have changed and you need to adapt in order to build a profitable business.
According to Common Thread Collective’s research, the following categories have performed the best since the start of the pandemic:
Meanwhile, the categories below have seen big declines:
Keep this information in mind when developing your store and try to find a niche that both meets peoples’ needs today and will also continue to be popular down the road.
So, we’ve established why you want to find a strong niche for your e-commerce business. But how do you know whether a niche is good or bad? Here are a few things to look for:
If you’re going to invest in a niche you want to get in on one that’s on its way up. Ideally, you’ll be able to get in on the ground floor of a niche that’s ready to explode in popularity. If you can establish yourself as an authority early on then you’ll be at a big advantage later when competition increases.
Conversely, getting in on a niche that’s on its way down can be disastrous for your business. The last thing you want is to invest in a bunch of inventory only to see the demand for it dry up.
Make sure to do your research and look for niches that are seeing an increase in sales. And if you notice sales have been trending down it’s probably best to avoid it.
Just because a niche is trending up doesn’t mean you should automatically jump on board. There have been lots of products that have come out of nowhere and become extremely popular, only to disappear shortly after.
So, while you want to look for niches that are growing in sales you also want to look for ones that have consistently generated sales over the years. That way if its popularity starts to decrease your sales shouldn’t fall off too much.
One of the biggest mistakes new sellers can make is selling seasonal products and expecting sales to stay consistent all year long.
For example, you may be researching niches in April and find that gardening tools are trending up. You start selling them and business is great over the summer. Then all of a sudden the fall comes and your sales drop off. There’s nothing wrong with your products. It’s just that gardening season is over and people don’t need your items anymore
If you really want to sell seasonal products and are prepared for your sales to fluctuate throughout the year that’s fine. But the best strategy is to find a niche that generates sales all year long and avoid products that have big dips at certain times of the year.
A niche can be trending up and generating high amounts of sales, but if there are already tons of sellers in the market it’s probably best to stay away.
Sure, you can invest a lot of time and money to establish your brand and prove why you’re better than the competition. But wouldn’t you rather enter a niche where you can be successful right away?
Look for markets that no many other people are selling in. This will allow you to establish your brand much quicker. You also won’t have to spend as much money on advertising and marketing.
Now that you know what to look for it’s time to go over some of the tools and strategies you can use to find a winning niche for your e-commerce business.
If you’re looking for top trending niches this is one of the best places to start. Google Trends is a free tool that allows you to see how popular certain topics are at that moment. It’s a great way to determine what niches are trending and which ones aren’t.
Start by making a list of all the niches you’re interested in, then enter them into the Google Trends search field. Make sure to select the country you plan on selling in (if you plan to sell worldwide you can select that as well).
You’ll then see a graph displaying the level of popularity the niche has had over the last year. Look for niches that maintained a high amount of popularity throughout the year and appear to be trending up.
Google Trends will tell you if people are searching for a niche, but it won’t tell you if people are actually buying products in that niche. To find that out you’ll have to look at e-commerce marketplaces like Amazon and eBay.
Luckily, there are plenty of tools out there that can help you analyze sales on these sites. For example, AMZScout provides a wide range of tools for analyzing products on Amazon. These tools will give you insights like average monthly sales and sales trends over the last year.
Like Google Trends, when analyzing sales trends look for both consistent sales throughout the year and an upward trajectory that indicates increasing popularity.
While tools like AMZScout were designed for Amazon sellers the insights they provide can also help store owners maximize their profits and make more money. Check out this comprehensive guide if you want to learn more about how these tools work, and some additional tips for making money through selling online.
In today’s day and age social media is one of the best indicators you can use to see what’s trending with the general population.
Here are a few ways to see what’s trending on social media for free:
The following are some of the most popular paid tools for analyzing social media trends and popular hashtags:
If you’re someone who spends a lot of time on social media then just pay attention to what people are talking about. If you see a certain topic continually showing up in your feeds then chances are it’s trending and there may be an opportunity to turn it into a business.
There are a number of great keyword research tools out there that can give you some valuable data on the level of competition for individual keywords. Once you’ve used the above strategies to identify top trending niches it’s a good idea to run your terms through ones of these tools to see just how saturated the market is.
Keep in mind that the best tools will require a monthly subscription, but most will offer some sort of free trial which should be enough to perform the research you need. Some of the best tools to use are:
All of these tools will have some sort of competition score along with information about the number of monthly searches they receive. Look for keywords that have low levels of competition and a high level of searches.
Over 1000 monthly searches is usually ideal, but even terms that only generate a few hundred searches a month can still be profitable.
If this is all new to you then you’re likely still unsure about what you should be looking for when it comes niches. Below are some examples of sales trends from various niches that will give you an idea of what type of niches to go for and which ones to stay away from.
Here’s an example of one niche that’s seen a big increase over the last few months. Sales were consistent before but have now jumped up in a big way. This shows good potential and a closer look is definitely warranted.
Here’s another niche that’s steadily trending up. However, this could be heavily influenced by the recent pandemic. Is this a trend that will continue over time, or will it tail off as Covid-19 cases begin to die down? This is what you’ll need to consider before investing in this niche.
Here’s a clear example of a seasonal product, as shown by the massive dip in sales during the winter. This is why it’s so important to look at sales for the entire year, rather than just the last few months.
This niche appears to have excellent potential. Sales have been consistently high over the last year and are now trending up in a big way. Even if the current trend doesn’t continue you’ll know you can rely on good sales from this niche.
Here’s a niche you’d likely want to stay away from. Sales have dropped dramatically from a year ago and have been up and down ever since.
If you’re looking to build a successful e-commerce business the first step is to find yourself a profitable niche. Some niches may appear great at first glance but will prove to be problematic later on, so make sure to do your homework and stay on the lookout for any red flags.
If you follow the advice above and use the right tools there’s no reason why you can’t find a winning niche to build your e-commerce site around.
This post was written by AMZScout Amazon Expert Team. AMZScout is one of the top Amazon research tools for online sellers and has been in the field for more than four years now. We love to share our expertise and identified trends to guide sellers to success.
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