How do small French companies, like Everlife (150,000 fans on Facebook), have managed to break into the highly competitive fashion sector in just a few years?
The most decisive factor is already finding the right product for sale. Indeed, to create an ecommerce store that works, you must already find the right niche.
What is the ideal niche sector for selling on the net? To better understand the concept of ?? ideal niche ?? for e-commerce, we must already find the common denominators to the success of some online shops in Pakistan.
After comparing hundreds of products and niche markets, we have drawn up an exhaustive list of key elements and criteria to know: this list will allow you to avoid the pitfalls and exploit the qualities of each of them. ?them.
The following are the basic criteria to correct or choose your niche market for your e-commerce store.
Warning: There is no product or niche market that meets all these criteria. However, comparing your shop idea to this list will give you a better overview of your shop and the product you have chosen. This list will help you avoid potholes and increase your chances of success.
1. What is the Size of Your Potential Market?
Choose a product with a small but respectable market. Avoid too discreet niche markets, where search volumes on your keywords are too low in Google.
Example: A product for pregnant women between the ages of 25 and 40 will have a good chance of selling. A product for pregnant women between 25 and 40 years old heavy metal fans, much less – it’s a niche too narrow. It will be too difficult to find customers and even more to retain them: a market too narrow will limit your growth potential.
Tools: Using the Google Ad-words Keyword Tool, you will be able to determine the most searched keywords for your industry. This will give you an idea of how many people are typing these keywords on Google and therefore the potential of your market.
Combined with a little common sense, this method should give you a clearer visibility on the viability of your project.
2. Who are your competitors?
Are they numerous? What face do they have? On which ground do you engage?
If your sector is already crowded, it shows that your concept is already validated by consumers. However, to break through, you will have to propose something different, original, to attract the attention of the customers and to make you a place of choice in the market.
Example: The shop PkMarts was not the first company to sell food and pet accessories and the market was full of competitors when they started 2 years ago. But they specialized from the outset on high-end products that owners buy punctually from the veterinarian.
2 years and tens of thousands of orders later, they are now one of the largest e-commerce animal feed sites in Pakistan.
Tools: The good old Google search is still working to help you put a name on your competition. The Google Adwords Keyword Research Tool, discussed above, will give you a rough idea of the search volumes for the keywords that interest you and their level. Competitiveness (how many other people / companies pay to position themselves on these keywords) Do not forget, the more these keywords are searched on Google, the more expensive they are.
3. Strong Trend, Passenger Mode or Growth Market
You must know your products on the fingertips, and know where they are in the current trends. Is your product the product of a passing fad? From a stable trend? Is it an expanding market?
Tools: Google Trends is an indispensable tool: it will give you an overview of the viability of a product over the long term. Let’s take an example.
We notice a spike of Google search with the keyword “vaccine” in November 2009. This peak is due to the scandal of the A flu in 2009. If you wanted to sell alcoholic solutions to disinfect the hands, It was the best time to do it.
If you type “Eat organic” in Google Trends, you will notice that the search is more consistent and diffuse. A key word like this one can be a track to a constant market that is less violently seasoned and mediated by events.
If you notice peaks that you do not know the cause for your keywords, deepen your research to find out the origin.
4. Are your products easily available?
If your product is on sale in local physical stores, it’s one less reason for people to come and buy it on the internet. Most people who will need a broom will buy it at their nearest supermarket not on the Internet.
If your products can easily be purchased close to home, what makes you different? Are you able to offer a better selection? Superior quality? More interesting prices?
5. Who is your customer type?
You do not need to do a lot of research on your future clients, but you still need to know who you are talking to. You must know their habits, what they are looking for and what they think they need.
If your product is aimed at teenagers for example, it will adjust the payment methods on your site, because they do not all do not have credit cards.
Example: PKBAZAAR.PK offers comfort products for seniors. Their target has a low level of adoption of IT and e-commerce. The online store is therefore thought to fit them.
Tools: Look for a company that sells the same products you are on the net, use Alexa to get information about the age, gender, occupation and country of origin of the visitors.
You do not know how to use Alexa? It’s very simple, this short mode of employment on Alexa is here to help you.
6. What is your margin?
You must know in advance what profit margin you will make on a sale. There are many micro-expenditures that add to the initial price of a product when buying from the supplier. These small expenses can quickly nibble your initial margin. Setting a fixed margin level right from the start will allow you to better manage these variable expenses. Thatâ € ™ s especially true for small, low-cost items. Let’s take an example :
Example: If I want to sell a keychain, which is worth € 2 to purchase from my suppliers, and I want to sell it to the public at € 25. So I will make 23 € profit, a profit margin of 92%. Let’s take a look at the indirect costs associated with selling this product:
Very small amounts can trim your profit margin. Of course, these are just estimates, and you can still reduce those expenses if you manage the logistics yourself or spend less on advertising, for example.
Tools: Try to find a product that interests you on Alibaba.com (giant wholesale catalog). Send a few emails to the suppliers to find out the prices they apply and the minimum purchase quantity. Use Google to find other merchants who sell the same product or similar products. How much do they sell their products?
Survey Monkey is also a fantastic tool to send a survey to your personal network: friends, family, colleagues. This will give you a glimpse of what people around you would be willing to pay for your products.
When you’re ready to start your business, create a small test site, with tools like Jimdo, and try to attract potential customers to your offer to validate your rates. There can be a big difference between what people say they are willing to pay for and what they are really willing to pay – especially if you rely solely on those around you.
7. How much to sell your products?
Choose products with resale value between 75 ?? and 150 ?? You will be able to make a nice profit margin without the need to attract thousands of customers while preserving a mattress for customer acquisition costs (marketing).
From 150 ??, people think a lot more about their purchase. They will ask more questions, need to be reassured and in general, it creates a longer and more difficult buying cycle.
Example: In our previous example with the keychain, we had a rather low selling price of 25 ??. Because of this, the variable costs nibbled the bulk of the margin to arrive at a profit of 13.20 ??. Imagine that we switch from the electronic keychain to a “Product X” with a selling price of 100 ?? (4x more than our keychain). The associated costs have also been multiplied by 4.
Thanks to this higher selling price, we get a much more interesting margin of 77% against 44% for the electronic keychain. While our profits per unit jumped 13.20 ?? at 81.30 ??
8. Sell Products by Subscription?
You’ve heard it before and heard it again: it’s much easier and cheaper to sell to an existing customer than to sell to a new customer.
By setting up a subscription system, you can sell several times to the same customers, automatically. There are two types of trade underwriting models: Discovery Products and Consumer Staples.
Examples: A good example of an e-commerce subscription site for discovery products is Birchbox, which sends you a selection of mystery beauty products every month.
The baskets ?? are for shopaholics who like to discover new products and be at the forefront of new trends.
Subscription sites for everyday consumer products are intended for people in a hurry, who do not have time to go shopping. BigMoustache offers monthly subscriptions from 2 ?? to receive his disposable razors at home, every month.
A business model based on underwriting is all the more important for a site like BigMoustache that their products are extremely cheap. Without this subscription and the assurance of having a regular customer base, this business model could not work.
9. What is the Weight & Size of Your Products?
The size and weight of your product can have a significant impact on the volume of your sales. More and more online shoppers are expecting to be offered postage. If you sell a heavy and imposing product, shipping costs may discourage your potential customers. Do you know that the price of shipping is the reason # 1 for which people give up their shopping cart?
You may be a bodybuilding pro with a provider who gives you great prices for your dumbbells – but do not forget to consider the associated shipping costs.
Tip: You can increase the average basket of your online store by offering delivery to your customers.
10. Is your Product Durable?
Fragile products can cause tons of problems. The costs of packing and shipping will cost you more. You will face more product returns, and your reputation will suffer. Keep in mind that even if the fault lies with the carrier, it is your sole responsibility to the customer.
Tip: Once you have chosen your product, order samples and test them until they break. Place them in a cold place, then warm. Test its resistance to shocks, twist it, make it fall. Do not be afraid to waste a cent of euros in samples that you will break. You invest in the satisfaction of your future customers.
11. Is your Product Seasonal?
The problem with seasonal sales is that the cash receipts are unreliable. In Idea, you should choose a product that sells throughout the year. If you decide to sell a product that is seasonally seasoned, plan your budget and expenses accordingly.
Example: the Papier et Chocolat site, which sells chocolates in pretty paper wrappings, is very seasonally dependent and sells mainly for holidays such as Easter and Christmas.
Tools: Use Google Trends again to identify trends and periods of high demand for your product.
12. Is your product at the service of a problem or a passion?
Products that work best relieve pain, solve a problem or serve a passion. The acquisition costs of your customers (marketing) are also lower because your prospects are actively seeking a solution – which requires fewer resources than when you want to convince them.
Example: Ere-Santé sells respiratory filters for people with respiratory allergies. People who have this problem will probably seek a solution and find Ere-Santé without Djamil, the owner of the site, need to spend a lot on advertising.
13. What Rhythm Do You Need to Renew Your Range?
Selling products that change regularly can quickly become complicated. You risk not being able to sell your inventory before introducing a new product / range. For example, fashion clothes that change every season or accessories for phones and tablets that continue to evolve very quickly. Of course, there are many companies that serve these markets successfully, such as iPhone and iPad cases, but it’s important to keep in mind that the inventory turnover rate can be very fast. Entry costs on this type of market are to be anticipated.
Example: The French Cover online store that specializes in selling handmade iPad cases. Their artisanal approach allows them to produce on demand. Which is an advantage since they do not end up with unsold stock but perhaps also a disadvantage, since they do not yet offer iPad mini case.
14. Is your Product Disposable or Consumable?
As recalled earlier, it is easier to sell to existing customers than to find new customers. Selling disposables or consumables makes it easy for you with the deadline for your products.
15. Sell Perishable Foods?
Selling perishable goods is already risky for a physical store, but for an e-commerce site do not talk about it. And since most of these products require ultra-fast delivery, shipping costs can reach new heights.
For example, ready-made meals, meat, frozen foods, and everything that must respect the cold chain and has an expiry date, requires special care during the expedition. If you choose to sell perishable products, it will require more organization and resources.
Example: The Orange Blossom makes delicious oriental pastries sold and shipped to their customers via their e-commerce site. This model works well for them because they can prepare their pastries in advance and they are careful to meet short shipping times.
16. Are there any restrictions or regulations?
Before you start a niche market or choose a product to sell, make sure that it is not subject to restrictions or legal regulations. Certain chemical, food or cosmetic products may be subject to local restrictions depending on your country of residence and / or export.
You can start by making a phone call to the customs of the country where you will import your products. You can also call the competent organizations like ANSM in France for medicines and health products.
17. Can you manage the success of your product?
If your product is very successful, will you be able to assume all the
orders ? It is difficult to imagine such a situation when one is still in the creation phase of an online shop.
It is better to know in advance if you will be able to handle this request. If you sell handmade products or if your raw material is hard to find, how will you respond to orders when your sales take off? Will you have enough products to deliver everyone? Will you hire more staff or will you be able to assume alone or in a small team?
The product you choose and the market you will operate are the heart of your business, and one of the most important decisions of your life as an entrepreneur.
Even if the perfect product does not exist, there are ways to minimize the risk of failing in your business.
By using the above criteria, validate your project and the products you have chosen, you will limit the problems related to distance selling and greatly increase the chances of success of your e-commerce site.