Looking to someday quit your job or supplement your income to pay your mortgage or car/student loans?
You’ve come to the right place to get started, as a matter of fact, I started with the idea of creating another income stream to pay for my expenses. Started with something small like my utilities then got bigger to paying off my mortgage and then eventually, my income.
NOTE: Don’t miss the "Product Discovery Worksheet" for this post and a free video course, “Ecommsterce Launch Formula” to help you launch AFTER you selected your product or market.
This post is divided into 3 sections:
Action expresses priorities. - Mahatma Gandhi
Read through it and take action. There is a reason why you are here in the first place.
Have you ever heard of the term, “the riches are in the niches”?
If you have, let me entertain those who haven't.
A niche is a sub-sub-market of a particular category (I'll get more into definition on this later).
When I ask entrepreneurs who their target market is, many tend to respond with “everyone”, in other words, no one. I did the same thing when I first started my drop shipping business, it's whoever wants to buy my product right! Why niche or segment my buyers? I'm an equal opportunity seller... so I said that to myself.
This was a huge mistake.
Here's what a niche is... a tightly defined portion of a sub-category, let me give you a few working examples for you to consider when you try to niche down your product.
Category/Market → Subcategory/sub-market → Niche (sub-subcategory/sub-sub-market)
Health → Weight Loss → Weight Loss for young teens
Wealth → Real Estate → Flipping Foreclosures
Food → BBQ → Dry rub recipes
Wealth → Ecommerce → Ecommerce business for 9-5 employees
Sport → Baseball → Baseball equipment for Tball
These are examples of tightly defined niches.
By narrowing down my target market, I fear missing out on potential customers. The reason behind for targeting a bigger market is to have the best chance of acquiring more customers - the typical startup mistake. Most successful companies today “niche” up.
Most successful companies today “niche” up.
Isn't that amazing! Mastering one niche will allow you to build relationships, understand the current market before you expand to different channels.
Here's a general rule, it's easier for you to niche up, meaning selling t-ball baseball equipment and then getting into selling baseball products for adults than the other way around.
A niche helps defines your message, your marketing, and branding. As you build your customer base, you build your product line.
Time to take action here, what is your, niche? Come up with at least 3 niches before you go to the next step.
Now, ask yourself this...
Would people be excited about the niche that you carved out and are they willing and able to pay for your product?
To help answer this question... read the below, but really, just grab a piece of paper, write down 3 niches - it starts today with this micro-commitment.
Now that you're thinking about your market (and what I mean by that is your sub-sub-market), what the heck should I sell? That's another question I get asked a lot.
I found my first business from a problem... I was a cheap college student who loved sports and didn't want to pay the high prices for customized uniforms. I must have spent at least a $1,000 in softball and basketball uniforms during college. So I started to find wholesale apparel and customization services... that was the start of one of my online business.
Put a magnifying glass and look at your life, ask yourself, what problems do you face? The more you practice this, you'll start uncovering more opportunities.
Finding your product action step 1: Write a list of your passion, hobbies, and problems you face.
... drinking fruity alcoholic beverages
... watching movies
... playing softball
... collecting stamps
... setting up a home security system
... running Spartan races
... how to fix lawnmowers
... how to train a dog to fetch
Your head is full of ideas! The brain never rests, just look around where you are now. What do you see around you? Right now, I see a chair, my stand-up table, water bottle, laptop, mouse, smartphone, journal, backpack, pens, USB hub, these are things within 2 feet from me that I use every day. Just write EVERYTHING down.
I'll tell you what to do below with this list later from Way 1 and 2.
QVC and HSN
Meetups and networking events
Here's what to do...
Hashtags and @ - If you have a particular interest in a product category or industry, you can try searching for applicable hashtags or @ and following relevant people in the market/niche or industry. Another great option is to do a search on Instagram for applicable hashtags that insinuate buyer interest and intent like #want and #buy. Here's a search for marathon runners on Facebook. There are plenty of communities online for you to tap into.
Here's one on Instagram for #crafts with over 8 million posts.
Product Curation Accounts - There are many accounts on social media platforms that curated product content. Like many other examples above, you'll likely want to search for and find accounts within the niches you are particularly interested in.
Talk - Go where the people hang out and find out more! Meet people who you share the same passion with a talk, for example, fitness. Find out where they struggle with fitness. Is it using the right equipment, motivation or coming up with a workout plan?
One of my friends started his own street vending business. He posses an enormous amount of information that can help fast track anyone who wants to start his/her own street vending business so that they can succeed from day 1.
I also formed a habit of walking up to employees of the retail stores and asking them what their best sellers are.
Television - Occasionally, I enjoy watching QVC and HSN - not to buy stuff, but to watch how they sell and what products are trending. It's addictive and sometimes I find myself getting sold. I have a set of knives that can cut through anything.
Go to your favorite places to shop for your niche or one category higher and start typing on the search bar to see what dynamically comes up... the example below shows a search for "crossfit".
If you decide on Crossfit jump rope, keep typing to see what comes up to niche down even further. So do this on your favorite shopping platforms, ie eBay, Target, Walmart, REI, Wayfair, Etsy...
Go to these sites to get more ideas
To be honest, when I first starting selling promotional products, I did not conduct any thorough market research 15 years ago. I knew that the promotional product industry generated about $7 billion in revenue during that time and if I can make a fractional of 1%, I will be happy!
We'll if you're not comfortable with shooting from your hip, there are some other methods of “validating” your business idea before you jump in, no specific formula, but general guidelines.
Google Keyword Planner to see how often your niche is being searched. Go through your product ideas and enter each product name and their variations into the Google Keywords Analysis tool. Select Keywords Ideas method and look at how many searches each Low Competition Keyword receives.
Go to Google Trends and do the same. Enter each of your product ideas into the search and look what the trend is. Is the trend increasing or decreasing? Are there any patterns? Do you see any spikes?
In general, you should avoid product categories that have little or no search traffic (less than 500 monthly searches). If you are planning to do a lot of search campaigns or grow organically through SEO, you should further dismiss all product ideas that have high competition according to the Google Keyword Analysis Tool.
Avoid seasonal products like holiday specific items, Halloween decorations, Easter baskets, and even some children’s toys. When you look at Google Trends, the spikes can indicate product seasonality. Here's an example of "Christmas ornament".
We often ask our family and friends for advice about our product ideas, you either receive too much praise or not much excitement. I purely ask now for the entertainment value.
Surveying your target market is not for everyone. You need to belong or have access to that specific market, for example, your existing softball meetup if you have a product idea for softball or online groups. If you don't have any specific affiliatations, there are paid services that can help you conduct the survey.
Also try reaching to bloggers or website who have access to your target audience.
Crowdfunding is very popular for both validating a product by collecting the money up front AND getting you a list of people ready to market to. If you create a physical product from scratch, spend the money to build a prototype (not required), create an awesome video and put it out on Kickstarter or Indiegogo.
Where are you competitors current selling from? How are they doing?
Checkout out SimilarWeb. You can type in your competitors website and it will grab their audience information, similar websites, their display advertising and where they are getting the most social engagements.
If you competitor is selling on Amazon or other channels, see how well they are selling there. For example, if your selling power banks, go to Amazon and search for “power bank” and see how the competition is stacking up. I use a Chrome extension, “Unicorn Smasher” and they will give you an estimate of how well they are performing each month.
Amazon is a review driven market, sales are usually (not always) driven by the number of product reviews. Looking at the general number of product reviews in the thousands, I would probably not get into this market unless you have a well-defined niche where you want to serve, perhaps, "power banks for powering laptops".
It's okay to see a couple of market leaders in your area, you'll probably never overtake them in market share, let them keep it. You'll need to look past that and serve the smaller niche.
I honestly don't want to give you so many tools that you become paralyze and take no action. The 15 years in Ecommerce made me realize that the product you sell is almost (I did not say not), but not as important as the marketing behind it in driving sales, but you do need a product with targeted market demand.
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Doing this on my own cost me years! Everyone needs a coach, Skywalker has Yoda, the richest man in the world Warren Buffet has Benjamin Graham and Michael Jordan had Coach Smith.