E-Commerce Basics: Why Finding A Niche Matters

Finding a niche in e-commerce is something that many experts and business consultants recommend when investigating what to sell on the internet. While most talk about the “How to” side of finding A niche, a lot fail to cover the reasons why. Those that do usually talk about finding your place amongst your competition. For example, they recommend becoming either a price leader (by having the best price), or becoming known as an expert (by providing the best information), or becoming a quality-based product leader (having higher quality products marketed to people who do not care about price). All of this is great advice. But let me add another, and see if I can expose an e-commerce trend at the same time.

e-Commerce has grown rapidly since the beginning, and just like in brick and mortar retail industry, the big players are taking over the game. In 2007, E-Retailing did about $166 Billion dollars of which $102 Billion dollars was from the Top 500 E-Retailers. That leaves $64 Billion for the remaining tens of thousands of online stores. The big stores are dominating. While technology is leveling the playing field so smaller sellers can compete technologically, bigger sellers are dominating the price wars because of their ability to buy in large quantities and negotiate the best rates. But they have gaps that you can take advantage of.

While larger e-Retailing stores have tens of thousands of products, they still can’t carry all products for a particular product line. There are just too many of them to carry them all. Think of a Target or Walmart store. They carry many products, yet they only carry a fraction of the total items for a particular type of product. Much of the same is true for big online retailers. For example, do a search on jump ropes at one of the large online toy stores. You may come back with a half-dozen to a dozen types. But then do a search on jump ropes on the web and see how many different kinds there are. You see? Just because the big store carries more products, they just can’t have the selection at the micro niche level that you can, should you make it your business. So once, you choose your niche, make it your goal to exploit it to the best of your ability… From having a great selection to having the best information on your product and you will find that you can in fact compete with the bigger stores.