Yesterday I wrote about newsagents doing $500,000 a year and more online, and why the winners run niche stores rather than putting their shop online. The obvious next question: how do you pick the niche?
There is no proven approach.
Anyone selling you a formula for finding a winning niche is selling you a formula, not a niche. What you can do is take steps that give you a better chance of getting it right.
Here’s where I’d start, based on years of experience in this space: what you know outside the shop.
What do you know, collect, follow or do that has nothing to do with the newsagency? Fishing. Model trains. Quilting. Coins. Vintage pens. Board games. A sport, a craft, a fandom.
This matters more than people expect. A niche website needs feeding every week for years. Product descriptions, buying decisions, answers to customer questions from people who know their subject deeply. If you have to research every sentence you write, you will stop writing. If you love the subject, the work is not work.
The knowledge shows in ways you cannot fake. A collector can tell within a minute whether a store is run by one of their own. When it is, they buy, they come back and they tell others.
Research the heck out of your idea.
Plenty of people love things nobody spends money on. Before you commit, spend real time on questions like these:
- Is there demand you can see? Search the niche the way a customer would. Look at what sells on marketplaces, what sold listings look like, which stores rank and how busy they appear. You want evidence of people spending, not just people interested.
- How good is the competition? A niche with no competitors is usually a niche with no customers. A niche with two or three ordinary competitors is interesting. A niche owned by one excellent, deep, well-fed store is hard. Be honest about which you are looking at.
- Can you get the product? Supplier access decides more niches than demand does. Can you buy at a margin that works? In quantities that suit a small business? Is there product the big players cannot or will not range? The niches I like most have suppliers who will not deal with mass retail.
- Does it ship well? Weight, size, breakage, and whether the average order covers the postage. A niche of $8 items that cost $12 to ship is a hobby, not a business.
- Will they come back? One-off purchase niches are harder than collector niches. A collector buys again next month. Repeat purchase is where online margins are made.
Your POS knows things. Categories that keep selling out in a small footprint. Products customers ask for that you do not range. Special orders people wait weeks for. Demand you can already see in your own shop is worth more than any trend report.
Be sure to test before you build.
You do not need a website to test a niche. List on a marketplace for a couple of months. Run the range in a corner of the shop and talk to the people who buy it. Small, cheap evidence beats a big confident guess.
I have picked niches this way myself, leaning on interests and knowledge I had before the businesses existed, then checking the demand, supply and shipping questions before spending serious money. Some worked better than others. The ones that worked shared two things: I knew the subject, and the research said people were already spending.
No formula. Better odds.