What to sell online

What to Sell Online: Niche Product
Selection
What to Sell Online: Niche Product Selection
www.shoppingsignals.com

You’ve decided to start an
eCommerce store. Great!

You’re in the right place for that.

But first things first.

You must choose a product to sell!

Figuring out what to sell
online isn’t just a part of the
process.

This is the MOST important step!

I cannot stress that enough!

You need to identify a niche that
has real value.

One with true potential.

One that solves a problem or fills a
need.

You can’t just sell anything.

And you definitely don’t want to
sell a random mix of everything.

Amazon already does that better
than you’ll ever be able to.

Niche product selection should be
your focus.

So let’s focus on choosing a specific
niche! Better yet, a micro niche.

More on that in a moment.

By focusing on a specific niche, you
can actually do things better than
Amazon will ever be able to do.

So there it is. Determining what to
sell online is the same as niche
product selection.

You’re trying to figure out a specific
type of product to sell on your
eCommerce website.

What’s a niche anyway?

Well, in terms of products and
eCommerce, a niche is simply a
sub-set of a larger group of
products.

But I bet you already knew that. If
not, here’s a good example:

‘Doll houses’ would be a niche
within the girls’ toys market.

Fisher Price Doll Houses would be
a more focused niche within the
Doll Houses niche.

Niches are like categories and sub-
categories.

Why should I choose a focused
niche over a broad category?

Great question.

There are a couple of very
important reasons why I
recommend focusing on a niche.

1. Your path to becoming an
authority, getting noticed, and
building an audience is much
easier if you’re focused on one
specific niche.

It’s exceedingly more difficult to
focus on a broad category in a
large market, with lots of different
categories and product types.

Start small, then grow bigger
if/when it makes sense. But
honestly, don’t even worry about
getting bigger right now.

2. Better conversions! That’s
right. If your site is specifically
tailored to a particular niche,
people will be more likely to
purchase from you.

If you seem to specialize in just
what they happen to be looking
for, you instantly gain a level of
authority and expertise in their
eyes.

People would much prefer to order
from an expert over a super-store,
all other things being equal.

(And if you provide real value,
they’ll even pay more to buy it
from you! …true story)

When you’re just starting out, you
want to give yourself the best
possible chance for success, with
the least amount of personal and
monetary investment.

Focusing on a niche allows you to
do that.

Okay, so hopefully I’ve convinced
you about the importance of
choosing a niche.

I want to take it a step further now,
and urge you to get really focused,
and seek out a ‘micro niche’.

A micro niche is just as you
suspect. An niche of a niche. A
very specific product sub-category,
in other words.

So in our example of the Doll
House niche, ‘miniature doll house
beds’ would be a micro niche.

I know… it seems awfully specific.

But remember, you want the least
path of resistance when starting a
business; the lowest barrier to
entry; the best possibility for
success (that is, sales).

A micro niche, if chosen properly,
will give you these things.

Some Proof, Please!

Okay, okay. You don’t just have to
take my word for it.

Building niche-based websites has
long been a proven model for
success in the online marketing
world.

There are countless examples of
people who have made a killing
with affiliate product promotion or
adsense, by focusing on very
specific niches.

This is no different for eCommerce
sites that sell physical products.

One great example, from noted
ecommerce expert Lisa Suttora, details
how a man went from a “variety store”
model (selling a little bit of everything)
on eBay, to deciding to focus on
specific niche ecommerce sites.

He now owns many niche
ecommerce sites and has been
listed as one of Australia’s 30 under
30 entrepreneurs.

Focusing on one niche at a time
gave him greater SEO and online
marketing leverage, intimate
market knowledge, clearly focused
brands, etc.

There are also lots of real-world
examples that demonstrate how
reduced choice can lead to
improved conversions for online
stores.

One awesome example, from
eCommerceFuel
(http://www.ecommercefuel.com/inside-
relaunch-online-store/), details how a
trolling motor (those small fishing boat
motors) site increased conversions by over
48%...

…and average order value by over 32%, by
reducing the number of products they sold
and focusing on a specific type (a micro
niche) of trolling motors.

And by the way, Andrew’s site is a
killer resource for starting and
running an eCommerce store.

Another example, from Visual
Website Optimizer, shows how
they were able to increase site
engagement by 27% after
removing a product filter from one
of their product categories.

This is a good example of how
fewer choices can mean better
results. Something like a product
filter would seemingly be a benefit
to the user.

But A/B split testing showed that it
actually just distracted visitors. Having
fewer choices allows your customers
to get right to what they’re looking for,
without being confused or distracted
with anything else.

Not Just Any Niche

Alright. You’re still reading so I
hope we can agree that choosing a
niche or micro-niche is a wise
approach.

Awesome. I knew you were a wise
one!

But what’s next?

You can’t just throw a dart and pick the
first niche it lands on. If you select the
wrong niche you’ll either be competing
with Goliath (Amazon), not competing at
all…

…because nobody wants what you’re
selling, or worse yet, competing on price
because you’re selling a
commoditized product that folks can get at
the corner store.

You need a practical, data-backed
method for choosing just the right
niche.

It’s simple really, in theory.

At the very minimum, you want to
identify a niche that is searched-for
frequently, and is at the same time
undeserved by existing
eCommerce merchants.

So a niche that a lot of people are
interested in, but for which very
few online stores are offering a
viable choice.

Easy! Only, it’s not all that easy.

It can actually be pretty darn
difficult to find such a niche.

And that, my friends, is something
a lot of eCommerce ‘experts’ won’t
tell you.

They’ll make it seem like it’s as
easy as brainstorming 20 ideas,
narrowing down your list, and
doing a few Google searches to
find the perfect one.

No! That’s not how this works.

It’s more complicated than
that. But thankfully, it’s not rocket
science.

You just need a plan and the right
tools, along with some basic
guidelines.

Maybe a step-by-step plan of
attack? Okay, here you go.

Step 1 – Mindset

It’s not about what YOU are
interested in.

It’s about what potential
customers are interested in.

To be clear – I do not recommend
that you “follow your passion” or
“choose something you’re
passionate about”.

If, after all of your research, you
happen to have found a niche that
meets your criteria and you’re
passionate about it, then great.

That’s certainly not a bad thing.

But your passion alone should not
be the driving force behind this
selection process.

For example, let’s say you’re like
me and you’re passionate about
golf. Despite not being very good
at it, I do love golf.

And frankly, I’d love to own a golf
equipment eCommerce store.

But that would be a horrible niche
to enter. It is saturated,
completely.

There are so many online options
for purchasing golf equipment. It
would be extremely difficult to
ever get noticed in this crowded
space.

Even in a micro-niche like a specific
type of club, the competition is
very strong.

I’d be trying to compete with giant
online and offline retailers, large
content producers (Golf Digest),
etc.

It would be difficult and expensive
to get onto the first page of
Google’s search results…not to
mention it would take forever…if it
ever even happened.

Make it easier on yourself. Don’t
focus on a passion.

Change your mindset and focus on
a business approach.

Focus on an approach that seeks to
validate demand and profit
potential of your niche.

Here are a few other niches I
wouldn’t touch, simply because
the competition is already so
strong:

* Insurance
* Debt Consolidation
* Mortgages & Loans
* Real Estate
* Computers and related equipment
* Stocks
* Travel
* Making Money Online
* Weight Loss
* Dating

Step 2 – Generating Ideas

Once you’ve established the
proper mindset of commercial
viability over passion, you can
move into the idea generation
process.

This is the phase in which you
develop a list of potential niches
for your eCommerce site.

You just want to come up with a
group of potential niches that you
can further refine based on the
criteria we’re outlining elsewhere
in this plan.

First off, avoid the highly
competitive niches listed
above. Again, those are typically
too competitive to waste your time
on.

Think small, undeserved, focused,
micro niche. Develop a list within
those constraints.

If you’re in idea generation mode,
try to always be aware of that fact
and try to pay attention to things
you read or hear, and how they
may spark ideas for product
niches.

Be aware of your surroundings as
well, as you may come across a
product in the store, or a situation
in every day life, that sparks the
idea creativity.

There are also some tools and
resources you can use to help.

Popular lists like Twitter Trends,
Google Trends, or Amazon best
sellers. Tons of ideas there.

Twitter and Google will give you
ideas about things that are
trending, topical and popular right
now.

Many of these topics may not be
product oriented, but they can
spark ideas of related product
niches.

And the Amazon best sellers will
give you an idea of the best selling
products on the web right now.

If you can find a niche variation of
one of those, then you’re on your
way!

Spend a couple of hours over the
course of 2 or 3 days just thinking
about niche ideas, looking at these
resources and jotting down what
you come up with. You’ll have a
great starting point.

Step 3 – Profitability

Just because people are looking for
something, doesn’t mean it has
profit potential.

You’ve got to choose a niche in
which people are actively looking
to buy a product, and a product
already exists.

For example, I know lots of people
are afraid of spiders. And if you do
a Google search for ‘afraid of
spiders’, you’ll find over 7 million
results.

It’s definitely something people are
interested in and searching on.

But what you’ll also find is a glaring
lack of products being sold. None.

There are zero Adsense ads, and no
eCommerce stores come up. That
doesn’t mean this is a great, un-
tapped opportunity.

That means that people searching
in this niche aren’t looking to
purchase products. They’re just
looking for information.

Now, you could instead focus on
the spider killing niche if you’re the
murderous type.

A search for ‘spider killing’ does
reveal one eCommerce result for a
spider killing spray on sale at
walmart.com.

But this violates our guidelines in
that it’s a commoditized product, is
for sale at the corner store, and is
being sold at an online giant like
Wal-Mart.

No thanks. I’ll pass.

So what identifies a niche as
potentially profitable?

* There are some (but not too
many) commercial listings in your
search results.

That is, when you search for, say
‘heated dog house’ you’ll notice
several ecommerce sites show up
in the organic search results.

Additionally, there are Google
promotional ads (Adsense) along
the top and right side of the
organic results.

For heated dog house, the
competition is pretty stiff, so I’d
probably stay away from it.

But, perhaps there’s a more
obscure micro niche within the
heated dog house category that
has some, but less, commercial
competition.

That’s the kind of thing we’re
looking for here.

* Do your target customers have
the money and ability to buy what
you’re selling?

For example, you might not want
to market luxury dining tables to
recent college grads.

It’s out of their affordable price
range…not to mention extremely
difficult and expensive to ship.

* Is it something people want year
round? Seasonal niches can work,
but again, why make it harder than
it has to be.

Give yourself the best chance at
success by selecting something
that people want any time of the
year.

Ensure that your niche has profit
potential before moving into the
next step.

Step 4 – Prove Demand

So far we’ve developed a mindset
that favors a business approach,
we’ve generated a list of ideas, and
we’ve filtered down that list to
leave only the potentially
profitable niches.

Now here’s where it gets
interesting…dare I say, exciting!

We can actually ensure that there
is sufficient demand for our niche.

There are no certainties in this
game, but being able to tell
approximately how many people
are searching for your niche every
month certainly stacks the deck in
your favor.

And you can very easily determine
this key metric.

First, you need a keyword tool.

You can go premium, with and excellent
tool like Long Tail Pro that really does a
deep dive into keyword research.

It provides you with extensive keyword
analysis and suggestions, competitor
analysis, Google rankings, etc. I’ve
used it and highly recommend it for
niching down to a profitable, and in-
demand micro niche.

However, if FREE is your thing, then
Google’s Keyword Planner tool will do the
job just fine.

Either way, these tools provide you
with data on how many people,
per month, are searching for a
specific term, along with many
suggested related terms for you to
research.

Regardless of the tool you choose
to do keyword research, here’s
what you want to look for to prove
demand for a niche:

Take each remaining niche from
your list and do the following:

1. Enter it into your keyword tool
of choice, and be sure to select
‘exact’ match search results, and
make sure you’re only looking
locally (as in the United States
only).

2. Run your query

3. Here’s what to look for, for each
keyword phrase:

1. At least 3000 local monthly
searches – this ensures that a
significant number of people are
searching for your niche…demand!

2. Make sure there are lots of
variations of your keyword. 10 or
more is a good target. These
would be ‘long tail’ variations.

Ex – if your niche keyword is “ant
farms”, some long tail keyword
variations might be “glass enclosed
ant farm” and “ant farm with
queen”

So, not only do you want to ensure
that a significant number of people are
looking for what you’re selling, but you
also want to make sure that there are
lots of long tail variations of your niche
being searched for.

This is because, in reality, most
ecommerce sites only get about
20% of their traffic from their
primary keyword.

All the rest of the traffic is coming
in from those long tail variations.

So you want your niche to have
lots of these variations that you
can target with great products and
/ or content.

There must be demand for your
niche, before moving on to the
final step!

Step 5 – Assess the competition

Even if you’ve done everything
right up to this point, you still may
not have a viable product niche to
pursue.

That’s because there may be too
much competition.

But Ryan, didn’t we already think
about competition in the first step?

Indeed we did. But that was in a
much more broad sense than is
required now.

At that point we were just thinking
logically, and being prudent so as
to not waist our time researching
saturated niches.

But now, you have a much
narrower list that’s been fine-
tuned and filtered down to the
best possible opportunities.

It’s now time to complete your
final due diligence for each of the
remaining niches.

It’s time to analyze the competition
to make sure you have some kind
of chance to get your site noticed,
ranked, and into the fold.

We want to identify a couple of
targets in your niche. By targets, I
mean sites that are vulnerable, not
up to the standards of the others,
low quality, forgotten, abandoned,
etc.

We can feel pretty confident that
we can eventually out rank these
targets!

To do this you really just need to
look at three metrics, for each of
the top ten sites that come up in
Google for your niche keyword
search.

The three things you need to look
at are Inbound Links, Domain
Authority, and Website Quality.

Inbound Links – These are links
pointing to a website from other
websites.

Also known as incoming links, they
represent one of, if not THE most
important SEO factors.

Google places a large importance
on the number of inbound links a
site has, when determining search
position.

So you want to evaluate the
number of inbound links that each
of the top 10 sites have in Google’s
results.

You can fairly easily achieve this
with a tool like Open Site Explorer.

Simply enter up to 5 URLs at a time
and run the search. What you really
want to pay attention to is the “Linking
Root Domains” number. This is the
number of unique websites that are
linking to it.

Depending on the niche the
numbers could be in the 10s, 100s,
or 1000s.

You want to look for opportunities
here. So if every site has 1000s of
uniques, you want to avoid this
niche.

But, if every site has numbers in
the low 100s, I wouldn’t be too
worried.

The goal here is to find one or two
(or more) sites in the top 10 results
that have much less than all of the
others.

Those are your targets, and that
tells you there is room to work
your way in to the search results in
this niche!

Domain Authority – This is a metric
developed by Moz.com one of the
leading SEO communities, and is
widely used as an indicator of
Authority in the SEO industry.

It’s essentially an algorithm that
predicts a website’s ranking
potential based on a bunch of
factors.

Luckily, Open Site Explorer can also
be used for gathering this
metric. So you’ll be killing two
birds with one stone here.

You will quickly notice the Domain
Authority metric for each site you
evaluate. It’ll be in the top left of
the results.

Domain Authority Metric in Open
Site Explorer

Again, we’re looking for
opportunities here. 70 and up is
considered very strong Domain
Authority. So if all 10 results were
above 70, I’d avoid that niche.

If a few are really low…like under
30, that’s a big opportunity and I’d
pursue that niche.

Basically, just look for a couple that
are much lower than the rest and
target these.

Website Quality – This is a less
precise evaluation and won’t rely
on some tool or number.

This is your reality check, your
hands-on diagnosis of the
competition.

You want to visit each of the top
ten sites and determine their level
of quality.

This isn’t anything specific.

We know quality when we see it,
don’t we?

Look for things like professional
design, great navigation and
usability, great added-value for the
customer (things like product
guides, helpful tutorials, videos,
etc…great content).

If every site knocks it out of the
park in the quality department, I’d
avoid the niche.

But what we’re looking for here
is…say it with me…an opportunity!

Are any of the sites poorly
designed, hard to navigate, offering
no additional value to the
customer? If so, here again, these
are your targets.

What to Sell Online – The Selection

Have you’ve been following
along? Have you performed each
of the steps outline here in
succession?

If so, you should have arrived at
this point with probably one or two
excellent niches! They’ve passed
all of the tests and cleared the
hurdles.

We can be fairly confident that
these niches would be
profitable. You’ve given yourself
the best chance of success!

If you have one or two niches, all
you have to do now is pick
one. You can feel confident that it
is a smart way to go.

Next, you’ve got to put a plan in
place to source products, develop
a website, and promote it. All of
which can be done rather
painlessly.

Especially if you have a little help.
And that’s why I’m here.

We’ll get to product sourcing next!

Next Steps

If you liked this tutorial, or hated it
for that matter, I’d love to get your
feedback. Leave a comment below
and let’s begin the conversation!

I highly encourage you to follow
this step by step process if you’re
interested in choosing a niche a
new ecommerce site.

Take action, and let me know how
it goes!

What to sell online

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