When it comes to finding the best products you want to sell in your online store or through your online platform you want to select items that people are actually looking to buy. This is much easier said than done. Finding out the next hot item is an ongoing challenge in the realm of Ecommerce.
For as long people have been selling things they have wanted to locate desirable products. Let’s think more broadly in terms of product niches. Or rather, the types of products that might be an emerging trend or a type of product that is high in demand, and there is more room to supply that demand without having to compete too much. Now, what would a profitable product niche look like?
The properties of a profitable niche
There are several properties to look for in a product niche to select that would increase your chances of making a profit.
High Demand - Of course you want to sell something that you know people are interested in buying. It could be even better if you discover that a lot of people are looking for a certain type of product, and the ones that are currently available are lacking a certain component or property that you might be able to provide and therefore establish yourself as a successful seller. How high a demand is for any type of product is difficult to determine. A type of product could be related to a certain lifestyle or the rising popularity of some cultural phenomena. It can be anything that seems to be catching people's attention.
Low competition - It’s actually not that difficult to identify a product niche that is in high demand. Whenever you see a type of product that you keep coming across or see it being bought or used, that’s a product in high demand. However, just noticing this isn’t enough to be certain that this product could make you a profit. What you want is a high demand product with the supply not being sufficiently met. With any type of product, the supply will eventually catch up to the demand, so it’s a matter of timing more than anything.
Seasonality - Ideally, you would want an evergreen product. This is a type of product that is useful all year round and is not really related to a particular time of the year or any sort of specific weather conditions. This doesn’t mean that you cannot make a profit with very seasonal products. You can, with proper planning and inventory management. Selling a seasonal product just makes it a bit more challenging.
Profits per product unit- Obviously there is no point in selling anything if you don’t get a decent percentage of the sales price back to you as profit. What you consider to be an acceptable profit margin is based on your own standards. After all, some products are in higher demand than others so the expected higher volume of sales might justify a smaller margin per product. It’s all about estimating how many units you can expect to sell as well as the difference between the selling price and your product cost. Regardless, knowing how much money you stand to make every time you sell an item is a crucial factor when it comes to deciding whether or not to sell it.
How to find a profitable niche
As mentioned before, it’s not easy to identify a niche that meets all of the criteria we’ve seen above. In some circumstances it is easier than others. This can depend on your business model and the platform that you are selling on. However, due to this being the age of information, you can actually do quite a bit in terms of gathering information. By doing so, you can reduce the risk associated with launching a particular type of product or a line of products.
-Keyword and trends research - A great thing about the way we live today is that when we are in need of something, we are likely to go to the internet and simply type in our request in a browser search bar. This means that those searches and inquiries are getting saved and compiled somewhere and there’s useful data available. You just have to find it.
Google trends is one of the most obvious choices when it comes to researching the frequency of what people are typing on the world's number 1 search engine. It’s free and it’s really easy to use. On the other hand, you can also use keyword research software for some major eCommerce platforms. This could provide good representative data for the demand for any type of product in the broader sense. You could also dig deeper and look for actual research papers and publications, which are usually behind paywalls. However, if you find some research that seems to be directly related to what you are looking into at the moment it could be worthwhile to actually pay for the information. The reason the results of those research are behind paywalls is because people consider learning from them to be worthwhile.
-Using the data from major eCommerce platforms - This might be the most productive way to actually evaluate a niche or a product. For example, when people want to find out what’s trending on Amazon , they use highly advanced market research tools like the AMZScout Pro Extension:
This is the sort of tool that gives you exactly the information you would be looking for. You can learn about the sales volumes of any product being sold on Amazon, it’s sales and price history, and you can even calculate the margins. On top of that, you actually have a niche score which treats every Amazon search as its own niche and gives you a breakdown of all of the different factors that make up the score:
Of course, this is most useful when you intend to sell on Amazon. However, considering the fact that Amazon is the largest eCommerce platform on earth, you can say that no matter where you are selling something you can be confident that at the very least the data you can access from Amazon will be consistent with what sells well on some other platform, another Ecommerce environment, or even in retail for that matter.
-Social media trends - Sometimes you won’t be able to locate hard data that can help you decide whether or not to sell a certain type of product. Since you are looking for information on new product developments, it might be hard to find well compiled data to scrutinize your product idea. However, if there’s any sort of new lifestyle trend, hot product, or general interest, the first place you will be able to notice it will be on social media.
This is a bit more of a subjective approach since you cannot really measure how many products of a certain kind you might be able to sell, or if the trend is going to last. But you are paying attention to the right things. You can at least be certain that something is rising in popularity. Social media is also a great source of marketing research in general since if you are studying a trend you can also see how a type of product is being perceived, used or even criticized by people and you can use all of that information to your advantage.
Trending niche examples
Using the logic that we can use the data from Amazon to get a general picture of a demand for a certain type of product, we can look over some niches that are trending on Amazon right now:
Bread making kits
This is one of those items that got very popular during the first wave of the pandemic when going to the store and buying fresh bread was not an option. People started making their own bread, and apparently they’ve continued to make it, as this new widespread hobby is still gaining in popularity:
Gaming mouse pads
Due to the same circumstances that lead to the raise in popularity of bread making kits, this was a good year for gaming. People are spending more time at home and are indulging in one of the most popular hobbies on earth. Because of this, gaming mouse pads have gone up quite a bit in demand.
Another very simple item that became popular during the pandemic, due to the fact that people are unable to go out for their cardio workouts because most gyms are closed and the weather is getting colder. When you think about it, these are all perfect conditions to make someone want to buy a jump rope in order to stay in shape.
In conclusion, picking up on trends and learning to evaluate them and respond appropriately and efficiently is one of the most valuable skills you can have as an entrepreneur. Identify as many sources of information as you can, and study them carefully in order to get a clear picture and to develop enough confidence that your new product idea is solid and that you can launch it confidently. Good luck sellers!