E-commerce is just another word for business transactions that take place online. Popular e-commerce websites include Amazon, Zappos, eBay, Sally Beauty, Wayfair, Barnes and Noble, Alibaba, Overstock, and others. It’s a multi-billion dollar industry that continues to grow with each passing year.
According to the United States Census Bureau, updated estimates show the digital economy accounted for 6.9 percent ($1,351.3 billion) of current-dollar gross domestic product (GDP) in 2017, up from 5.9 percent in 1997. Digital economy real value added grew at an average annual rate of 9.9 percent per year from 1998 to 2017, compared to 2.3 percent growth in the overall economy. Read the full report here: https://apps.bea.gov/scb/2019/05-may/0519-digital-economy.htm
The exciting thing about e-commerce is that it levels the playing field. Fifty years ago, you would have needed a large amount of capital to start your own business. You would have spent that capital by renting a store, buying inventory, paying for advertising, hiring employees, and more.
Thanks to e-commerce, you don’t need to have deep pockets to get into business. What you need now is a desire to serve customers and a strong work ethic. If you have these two traits, then you can become part of the e-commerce movement.
Choosing a Niche
The first thing you need to consider when starting an e-commerce store is what your niche will be. Picking a niche will allow you to focus your e-commerce shop on a particular customer or a specific type of product.
Amazon originally started as an online bookstore. Zappos began by offering only shoes to their customers. Biz Chair only offered office furniture, when it first launched.
Now, all three of those shops are household names and they offer a variety of products. By focusing on a small demographic early on, they were able to build their brands as they earned the trust of their customers.
When you choose a niche, you should start by looking at what you’re passionate about. If you hate being in the kitchen, starting a business that sells cookware won’t work out well for you in the long run.
Spend a few minutes brainstorming and try to come up with 5-7 ways you like to spend your time. Choose the activities that light you up and leave you feeling fulfilled.
Think about what you would do if you were given $10,000 to use any way you’d like right now. Maybe you’d spend it on computer equipment. Maybe you’d purchase a new set of golf clubs. Maybe you’d use it to travel for a week.
Keep in mind that you don’t have to focus on an existing passion. You can explore a niche you’ve always wanted to learn more about and build a business at the same time.
When you have a niche in mind, start thinking about the problems you could solve. For example, you decide to focus on healthy eating and fitness. You look around and realize there’s a huge market of people who want to get fit, but they have medical conditions that make it difficult to exercise or eat right. Maybe you even have a medical problem of your own that allows you to relate to your audience.
So, as you think up problems, pause to list them. Some problems you could solve for your niche might include:
- Easy Meal Prep for Diabetics
- Workouts for People Who Are Immobile
- Exercises for Patients with Back Pain
- Fitness Activities for Asthmatics
- Healthy Snacks for People with Allergies
Researching Your Competition
Now that you have a few ideas in mind, it’s time to look around for your competition. If you’re considering a niche and you can’t find any competition, be careful. A niche without any competitors may indicate that you’ve stumbled upon an unprofitable market.
When you find a niche that has plenty of competitors, make a list of sites and industry leaders who are popular. Note common themes, how big their following is, and what topics they regularly cover. Then list what they aren’t focusing on. This can help you spot gaps in the market so you can stand out.
Next, go beyond websites and start exploring social media. Which sites have the biggest followings? Do they spend most of their time promoting their products on Facebook? Do they use Instagram or Pinterest? Which one seems to be getting them the most traction?
As you research your competition, observe what they’re doing right and what’s working for them. For example, you might notice a fitness website has a ton of followers on Instagram but isn’t active on Pinterest. This may mean that your audience prefers to get their content through Instagram and not Pinterest.
Of course, once you start your own website, you’ll want to test these theories. You may even discover that what works for one site doesn’t necessarily work for yours.
Keep in mind that every niche has their influencers, too. You want to spend time examining these people. They can help shape the direction your industry goes in. But don’t just research influencers; look for up-and-comers, too. These people aren’t quite at the top of their game yet.
But they usually have a solid social media presence, a well-written blog, or vlog, and a website packed with information. These influencers are happy to talk about your niche as well as where they see it going, within the next few years. If you’re willing to listen, they can give you some amazing tips that will allow you to position your e-commerce site for success.
Don’t let your research lead to feeling threatened by others who are seeing success in your niche. Many well-known solopreneurs and small businesses work together behind-the-scenes. In fact, these sites occasionally promote each other using affiliate links.
The reason they do this is because one person or one business can’t serve everyone in a niche. And even if they could, customers like options. After all, there are dozens of burger chains serving customers and making millions.
Doing your research will also help you narrow down exactly who you want to serve. A website centered around fitness advice for anyone with a chronic illness might be too general. Instead, you may want to focus on selling health and wellness gear and aim it strictly toward diabetics.
Remember that you may start with one niche and find yourself broadening your site later on. For example, Amazon no longer sells just books. It can be a good thing to expand your e-commerce shop when the time is right.