7.3 Research the market; identify possible niches, keywords and competitiveness
Most e-Commerce sites that offer classified adverts at fixed prices, undisclosed prices or at pricing to be determined by auction were originally started to offer personal goods for sale. Today e-commerce sites like eBay, Craiglist, OLX, Amazon and more offer new and or used products.
Your objective is to host your e-commerce store that could sell goods made by others; buy wholesale and sell retail. Most offline shops in your neighbourhood do this. Researching niche opportunities either vertically or horizontally within a selected industry will offer many opportunities. You need to find a niche where the online balance between supply and demand is relatively favourable. Would you sell more from a stall in a large or small flea market? Certainly, the dynamics of supply and demand are equally applicable. You will be guided by research and by trial and error.
Often wannabe vendors/merchants get straight to it and start to sell a chosen product line only to find that the market is overtraded, or there is no market. As has been suggested the approach should be to establish the existence of a market that will sustain a business and then test the market by offering casual sales on an e-commerce site while a website is under construction. To find and test a market, research niches, then keywords and then keyword dynamics. Keyword dynamics is often considered to be complex. This is not so. One establishes the number of monthly searches for defined keywords by exact words and then for exact phrases. This done one needs to establish how many possible sites there are so as to create a rough index of relative competitiveness; searches divided by the size of the niche.
There are many readily available clues to popular niches within the marketplace. I define a popular niche to be a segment of the marketplace that is frequently searched. Try this; enter the words – work from home, in a Google search window. You will see that a drop down list of frequently searched options will open that is probably headed by the option; work from home jobs. I have expanded upon the use of the Google Search tool in the section on Blogging. Next, open the e-commerce sites and the business directories that are popular in your area and note the listed categories and sub-categories. These categories and sub-categories exist because they meet the needs of users. Finding products on e-commerce sites is done by carefully filtering through categories whereas search engine search is done by keyword or by keyword phrase. It is likely that there will be many online merchants within broad category/niche headings. This means that unless you can favourably compete because of an advantage such as price, location (lower delivery costs), quality or other significant factors that you will have difficulty in establishing a market share that satisfies your appetite; sales volume requirements.
Having established a niche that you have an interest in, either because of the possibility of it presenting a relatively unique opportunity, or because you are passionate about it you need to further analyse the niche in search of an under traded niche opportunity. To do this, you need to look to the sub-categories on the big e-commerce sites and specialist online directories. The largest online directory in the world, DMOZ is maintained by some 90,000 volunteer editors, and it has over a million categories. Researching DMOZ will offer you many specialist niches that have Internet search interest, or they would not exist on DMOZ. When you have completed your research, you’ll have a list of niche possibilities. You now need to explore products and or solutions that have commercial value within these identified niches.
With the list of possible niches in hand that interest you. Ask yourself if these niches can be further broken down into precision segments. Let me elaborate. Mass marketing via bulk e-Mail campaigns, TV, radio and newspapers is often used for building brand awareness and for broadcasting price competitiveness to mass markets. The audience is not differentiated, and the products or services are likely to be used by everyone. On the other hand marketing to veterinary surgeons by way of an opt-in SMS campaign run by a National Association of Veterinary Surgeons might be termed niche marketing (the niche being “Vets”) however this audience may be further classified so as to be relevant to a small segment of veterinary surgeons that use a particular piece of diagnostic equipment in an attempt to get them to upgrade their equipment with a new add-on, in what would be termed, a precision marketing campaign (the precision market being “Vets” with the equipment). Market segmentation may be done regarding a variety of criteria such as geographic filtering to target farmers, income filtering to target high-end expensive product promotions, gender filtering to target cosmetic promotions et cetera.
Next, you need to determine the popularity of each niche on the list. To do this in an affordable way you could use the Google Adwords Keyword Planner Tool. Start by researching keywords that are associated with the niches on your list. Open Adwords and enter a keyword phrase associated with one of your niches. Set the option for the results to be – broad, exact or phrase. The broad option offers a rough guide, but the exact and phrase options give you a more relevant result. I suggest that you list your search results on a spreadsheet with columns for the number of local monthly searches by exact keyword and keyword phrase. Next, list the number of competitors being the number of sites with the exact keyword and also the number of sites with the keyword in the site title. Search> allintitle: keyword < The number of sites with the keyword in the site’s title will be a lower but more relevant number and it is this number called the “results” number that is often used to determine the index or R/S ratio where S is the number of searches for the given keyword and R is the number of sites that are optimised for that keyword. This done, you will be able to do the maths and have an indication of the relative competitiveness of your selected keywords.
Another option would be to use a free service like Topsy: www.topsy.com Topsy offers valuable insight into the market as it “listens” to the internet for buzz i.e., it offers measured results on how many people are talking about a given product. For SA use one needs to temper volume predictions for local preferences however as a means of assessing the popularity and especially for sourcing foreign suppliers and overall popularity it is a valuable source of instant information. You can search and analyse the social web for links, tweets, photos, videos, influencers and all-in. As an example, searching “Black leather hand bags” offers the following:
Take the Test
Trying to sell products and services packages online without an online store is like try to sell wine without a wine list. Is using wine in the stew the best way to sell wine? Is selling products and services packages on a website where they are not showcased the best way to sell them online? ...Nope!
I suggested that the number of searches can be found with Google Adwords. The number of competitors is also relatively easily determinable. Type the keyword names for the niches identified above into a Google search box and note the number of search results. Certainly, it is a guideline as Google have found these results to be relevant to the niche’s keywords or phrases that you entered. This research can take time, and there are free keyword analysis tools that will do some of it for you such as Keywordeye in the UK, Keyword Spy and Semrush. My favourite remains a paid tool that does days of analysis in minutes; it is called Market Samurai.