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Tips and Examples for Finding Profitable Niche Products Online

Threecolts
Geri Mileva
Published
November 24, 2023
Modified
November 24, 2023
Finding Profitable Niche Products Online

Competition is a given when it comes to business. In particular, competition in e-commerce tends to be greater because the playing field is wider than traditional brick-and-mortar stores. This can be pretty overwhelming for aspiring Amazon and eBay sellers, who might find it challenging to develop a product catalog of items that can sell well. Marketing can only go so far; the more competition there is for any product category, the harder it will be for sellers to profit from it.

What is a Niche Product?

Niche products are one way to bypass fierce competition for a product category. A niche is defined as a specialized segment of a market and the specific products or services targeted to that group. For example, cosmetics is a broad product type with many brands vying for consumer favor. Vegan makeup is a niche product in this segment, targeted at a specific market group within the broader skincare and cosmetics market. It’s a niche product because not everyone who buys makeup looks for cruelty-free or vegan options. 

Niche markets can be defined in several ways:

  • Demographics. You can focus on a niche market composed of university students, women, seniors, fathers, or other demographics. 
  • Price. Designer brands target the luxury niche market, while dollar stores target bargain hunters. Many other stores go for average pricing.
  • Quality. Similar to price, there can also be market segments for premium items made with the highest-quality materials, just as there can also be segments that place more emphasis on low-cost materials.
  • Interests and Values. Vegan makeup is one type of niche market defined by the values and attitudes of consumers. Sports and hobbies are also niche markets bound by a shared interest.
  • Geography. A niche market based on location can be ideal if you want to cut down on shipping costs. Residents of a given area can also be a niche because they might have specific needs stemming from their living situation.

Why Should You Consider Niche Products?

Niche products have the potential to generate more profit for e-commerce sellers because they attract a defined group of people. In terms of marketing, this makes it easier for businesses to craft campaigns that will attract niche markets since they are easily defined and characterized. 

Small segments also mean that companies targeting the mass market may overlook this specific slice of the market. This allows newer or smaller companies to enter the market and offer products created especially for these overlooked niches.

Niche markets are typically more devoted to their choices than the mass market. Because their preferences are not always available from familiar brands, consumers in niche markets intentionally search for products that suit their liking. This investment in time and effort makes them more inclined to be repeat customers, loyal to businesses that offer products and services they prefer.

Finally, niche products can command a higher price than items targeted to the general public. Because these products are often more challenging to find and buy, consumers are willing to pay more for a niche product they like. This can translate to higher profit margins for the seller.

Tips for Finding and Selling Niche Products

Because niche products are often highly specialized, it can take time to discover a market that you can easily reach and whose products can be sourced with little difficulty. These tips can help you find those low-competition niche products you can start selling online.

Consider Your Own Interests

If you want a niche product to add to your catalog, consider your interests and hobbies. You’ll be better positioned to research what products are hot and in demand, what keywords to look up, and what trends are on the rise. Most of the time, third-party online sellers are also their own marketers. Both product research and marketing will be easier if you are passionate about what you are selling.

Study a Market Segment and Identify Needs

You can identify and determine the needs of a market segment you strongly relate to based on your interests. Define your target market as precisely as possible, pinpoint areas where they might have trouble or problems, and try to think of products and services that address those needs. After all, businesses sell solutions to consumer needs.

Keyword Research is Key

Keywords are not just for SEO. Analyzing keyword trends can give you valuable insight into potential low-competition niche products. Google Trends is an excellent tool for keyword analysis. Products that people actively search for signal a strong demand. Similarly, you can use online, AI-powered tools such as Ahrefs or Semrush to check the competition for a particular keyword.

Use Social Media Hashtags for Clues

Use Social Media Hashtags for Clues

Thanks to the Internet, people with similarities can find each other easily. You can research on social media for these niche markets, many of which have dedicated online communities where they can share things about their common interest. Hashtags are beneficial for tracking down these niches. Try looking up hashtags on TikTok and Instagram for an interest or hobby, and you will most likely find groups, posts, and other communities. Reddit is also an excellent platform for looking for niches; their conversations will allow you to learn more about their needs, favorite products, and recommendations.

Analyze the Sweet Spot for Profitability

Through product research, you can find multiple niche products that can bring in revenue because of their high demand. However, this does not mean you will automatically generate sales by offering it in your online store. Assess your product ideas for profitability first, and keep in mind the following factors:

  • Competition. There are niche products with high demand but likewise have high barriers to entry because of stiff competition. This may be the case for products that have been in demand for a long time already. That’s why it’s important to study trends so you can enter a potentially profitable niche market before other sellers get wind of it.
  • Sourcing. How you source the products will play a crucial role in their profitability. In your estimates, include the cost of shipping your inventory from its origin to your warehouse. If you’re shipping from overseas, you may likely use a freight forwarder to import the products in the country.
  • Pricing. Even if you can source the products for a low cost, the pricing range for a niche product can tell you if you can sell them for a profit. Different e-commerce marketplaces may also have different price ranges for similar products, so consider where you’ll be selling.
  • Seasonality. Not all products have a consistent demand and supply pattern. For example, the video game industry sees revenue surges around November and December as most companies plan new releases just before the holiday season.
  • Market Demographics. Niche markets have their nuances and characteristics. Are the customers in your target market willing and able to shell out money for your product? Are they located worldwide, or are they concentrated in a few areas? This can also affect your pricing and marketing strategy, so define your target market well.

Market Niche Products Effectively

Niche markets are typically easier to reach because they actively search for products they like. That said, marketing niche products effectively is still essential to converting customers. You’re catering to a smaller market segment, so aim for customer loyalty over volume.

Test to Assess the Product

For resellers, test the product to check its effectiveness and overall quality. It’s hard to sell a product you don’t believe in to people who are passionate about it. You can also run a small-scale test by leveraging influencers or requesting feedback from your first customers. These can help you fine-tune your product research and development. If you sell handcrafted items you make yourself, this can be an excellent opportunity to improve your work and ensure that the final product will be accepted even by the most discerning customers.

How and Where to Sell Niche Products Online

The beauty of modern e-commerce is there are now multiple ways to conduct your business transactions. Online arbitrage and dropshipping are two common strategies for businesses dealing with niche products. Online arbitrage refers to sourcing products from a different market and reselling them in your own store for a profit. On the other hand, dropshipping is a fulfillment method where the seller does not physically handle inventory. A third-party supplier manufactures and stores the products on their premises; the seller receives orders and forwards them to the supplier for fulfillment.

Niche products can be sold via online arbitrage, dropshipping, or conventional business strategies. However, e-commerce is suited to specialized niche markets. Online communities for these niches are common, so it’s easy to reach them via social media.

A multi-channel e-commerce strategy is suitable for niche products to reach as many consumers in your target market as possible. Sell your niche products in these online marketplaces to maximize your profits. You can check out e-commerce tools from Threecolts and JungleScout to make selling online easier. Tools like SellerRunning and TacticalArbitrage from Threecolts can help you in your product research, and their SmartRepricing tool can even help optimize your pricing strategy, so you consistently set the best prices to stay competitive and profitable.

Amazon

As of 2022, Amazon is the second largest e-commerce marketplace worldwide, behind Chinese online retail group Alibaba. However, the current trend predicts that the US-based e-commerce marketplace will overtake Alibaba in estimated sales by 2027. According to Amazon statistics, over 60% of sales from their platform come from independent sellers, and competition is somewhat fierce. But you can still generate sizeable profits on Amazon if you find the right niche product to sell.

eBay

Selling on eBay remains profitable despite Amazon's considerable impact on the e-commerce industry. The platform is still the second-biggest online marketplace in the US, with an average of 1.2 billion monthly visits in April 2023 and 134 million active buyers at the end of 2022. Niche products may do particularly well on eBay, as many customers associate the marketplace with unique, collectible items that may not be available on other platforms.

Walmart 

Online sales in Walmart Marketplace, the digital platform of the US retail giant, have been steadily climbing since 2014, with projected 2024 sales pegged at over $60 billion. Competition is less fierce than on Amazon and eBay, giving resellers good opportunities to create their mark and sell niche products. Walmart’s fulfillment services operate similarly to Amazon’s, so new sellers will have adequate support from the company for shipping, customer service, and returns.

Etsy

Etsy itself has a niche market for handmade products. This is an excellent marketplace to sell your handcrafted items. You can also search for products on Etsy to resell on your Amazon or eBay store. 

Social Media

Social media is not just for posting vacation pictures anymore. Facebook, Instagram, and TikTok have become platforms for selling various products. Some brands use social media for their marketing efforts and to connect to their audiences, while smaller, independent sellers use their accounts to sell directly to their followers. If you already have a sizeable number of followers on social media, you can set up a shop linked to your profile so users can buy directly from Facebook or Instagram.

Examples of Low Competition Niche Products and Markets

Almost every product type can have a niche market or product. Here, we list a few examples of niche markets and products you can research that are known to have low competition, along with some example products marketed to specific groups.

Health and Beauty

Health and beauty products have dozens of niche products. This is both good and bad news for aspiring e-commerce entrepreneurs. The good news is that there are a lot of products to explore, giving you many options. The bad news is the market is starting to get saturated for some of these niches. If you want to sell niche products in this category, it’s best to study the upcoming trends to enter a niche market with only a few competitors.

Our vegan makeup example earlier falls under a niche in the health and beauty industry. With a growing vegan community that espouses animal-friendly practices in all aspects of daily living, a vegan-based skincare, beauty, and health product line is a good niche market.

Solar Products

Products that work on solar energy are a good niche market. The competition is not as stiff, and people are becoming more interested in this renewable energy source as living expenses continue to rise. Admittedly, there are not yet a lot of solar products, but this presents an excellent opportunity for those seeking niche markets.

Solar power banks, portable solar panels, solar lamps, and solar water heaters are some niche products you can sell. These products can be marketed not only to renewable energy advocates and solar-powered households but also to hikers and campers who can benefit from solar products.

Pet Needs

pet niche

Another effect of rising living costs is that many couples now prefer to be “paw-rents,” taking care of pets instead of raising children. For some, the cost of having children is simply too expensive; for others, they might not want to add to the already ballooning global population. Whatever their reasons are, pet parents are now more common, and a niche market has grown out of this community. For these customers, pets are considered part of their family. 

Pet products such as toys, clothes, and other accessories are becoming necessary in these households. Little luxuries such as pet costumes and collars for AirTags are also pretty easy to sell to pet lovers.

Gaming

gaming niche

The gaming community is among the most passionate and prominent online groups. A good thing about gaming niches is that we can define markets according to age, gender, video game, skill level, and other characteristics. Gaming content tops the list for the most in-demand niche, but gaming gear is also profitable. Some gaming accessories you can consider as niche products are gaming mice, headphones, keyboards, and even high-tech gear like VR headsets and consoles.

Sustainable Products

sustainable products niche

There has been a collective shift in people’s attitudes toward eco-friendly products. It was once a very small and specific niche, but it’s now expanded into all industries. Eco-friendly and sustainable products carry more than their functional value; they also have a social value that makes them attractive for sales and marketing. Niche products in this category include reusable household items, bamboo products, and eco-friendly cleaning products.

Smart Home Devices

Technology has come a long way, and the smart home era is upon us. Many products for intelligent houses are becoming available, making it a good option for niche products to sell online. Because smart homes are not yet super popular, the market is not yet that saturated, and people who live in these high-tech homes are still excited about adding new devices to enhance their living conditions. Smart plugs, wireless chargers, robot vacuum cleaners, and smart home security devices are common products that are easy to resell online for the smart home market.

Maximize Your Profits with Niche Products

Selling online is easier than ever, but it also comes with more challenges as more competitors enter the market. Niche markets and products help narrow your target customers and create a specific brand identity. With niches, you can develop long-lasting customer relationships and establish your credibility in that particular market by selling in-demand and high-quality niche products.

Let Threecolts be your trusted partner in your e-commerce endeavors and arm you with a comprehensive suite of products and services for Amazon, eBay, Walmart, and other online marketplaces.