It is estimated that there are somewhere between 12 to 24 million e-commerce stores as of 2021, and this number is growing every day. This is a pretty staggering statistic and one which can be very daunting if you’re considering opening up your own e-commerce website in the future.
It’s clear from these figures that competition is fierce, and this is perhaps why 90% of e-commerce businesses fail within the first four months of opening.
But why are we telling you this? Especially after you’ve expressed plans to start your own e-commerce business.
Well, we promise it’s not to put you off. Quite the opposite actually, it’s to give you a better chance of success.
One way to ensure that your business is successful is to make it stand out from the crowd and provide goods or services that others can’t.
Which is exactly why we’ve put together this guide.
Below, we’re going to take a look at six reasons why you should start a niche e-commerce site for the best chance at success.
1. You’ll have less competition
First and foremost, one of the biggest reasons to open up a niche e-commerce site is to reduce the amount of competition your business is facing. If your goods or services are targeting a smaller market, your chances of coming up against competition are also lower.
Plus, if you’re offering something that no one else is, it is much easier to win your target audience over as you specialize in what they’re looking for.
The more specific and niche your offering, the less competition you face.
For example, there are thousands (if not millions) of generic clothing retailers out there, making this a very competitive industry. However, sustainable and ethical clothing is growing in demand, but there are not many stores out there that sell these items.
So, in a nutshell, the more specific and niche your offering, the less competition you face. However, you might also find that very niche products have fewer buyers out there, so you need to make sure you get the balance right.
2. You can save money on marketing and advertising
When your business is trying to target a huge audience, you need to put more money and resources into finding their different pain points, reaching out to them and targeting them on the multiple different platforms they use.
However, when you’re targeting a highly specific audience, you can save money on your marketing and advertising campaigns. You can do this because:
- You can afford to target more specific long-tail keywords, which are often less expensive than highly competitive keywords
- You can do more specific research and analysis into where your smaller audience spends most of their time and target them on one or two chosen platforms
- You will also find that you are able to do fewer trial and error campaigns or testing of your advertising
Essentially, when you have a niche business, it is easier to reach your target audience, and they are more likely to convert. Therefore, your campaigns are more cost-effective and often have a better ROI.
3. Your brand will be more visible
Not only will you be able to save money on your marketing efforts but starting a niche business means you have more visibility online.
This is because you can target less competitive keywords and work on your SEO efforts to ensure your business is the first to come up when someone searches for your goods or services on a search engine.
Starting a niche business means you have more visibility online.
This increased visibility can help to drive traffic and amplify your online presence. And as we said above, this traffic is more likely to convert into sales because of your niche offering.
4. Your customers will be more loyal
If you have a niche business, it’s much easier to inspire brand loyalty. This is because when you’re solving a very specific problem or offering a niche product that they can’t get anywhere else (or not many other places, anyway) then customers are automatically going to be more loyal to your business.
Particularly if you offer extras such as a great customer service, beautiful or personalized packaging and targeted online content.
What’s more, because you’re appealing to a specific buyer, your value proposition is unique, and they will continuously look to you as a trusted supplier.
Because you’re appealing to a specific buyer, your value proposition is unique, and they will continuously look to you as a trusted supplier.
Think about it, when you’re looking for a generic item, let’s say, for example, a new toaster, then you have so many retailers to choose from. You could go to Argos, Amazon, Dunelm or even your local supermarket. With so many choices, you’re not loyal to any of them; you’ll choose the toaster that best suits your style and budget at that time.
This is why offering a more niche product or service will gain you a more loyal customer base.
5. You can form better customer relationships
Following on from the above, when you have a smaller customer base, it’s much easier to focus on them and give them more of your time and attention. From personalized offers to follow-up emails, great delivery deals and tailored online content, there are plenty of ways you can strengthen your customer relationships with relative ease.
When you have a smaller customer base, it’s much easier to focus on them and give them more of your time and attention.
When you have to please literally thousands of customers each day, special requests, custom services, and even dealing with queries can take a lot longer - if these are even possible.
Whereas, if you have fewer customers to communicate with, you can really prioritize creating a great consumer experience, getting to know more about them and their preferences, and offering genuine value to their lives.
6. You can charge more for your goods or services
And finally, when you’re offering a unique product or service, or one that solves a very specific problem, you can charge more for it. This is particularly true for goods produced in small batches, by hand or in a more sustainable way.
This is because the price isn’t just about the product or service and its quality; availability also contributes towards your prices.
Of course, this doesn’t mean you should go over the top and charge an absolute fortune as this could cost you customers now and in the future.
Related articles:
How Branding Improves Customer Perception of your Product
Tips for Spreading Awareness of Your Online Business
The Evolution of eCommerce: Trends to Watch