We’ve created some blog entries before discussing the
importance of choosing your niche market and how to go about it. Now, we delve
deeper into the online selling woods to discuss how to understand your niche
better.
First, it’s advisable to look at the numbers. Find out how your niche is growing. This would help you determine if it’s worth growing your online store or staying at the size you’re in now. Let’s focus on something more specific, a personal interest of mine is gaming. Nintendo, WII, Playstation, PC games – you name it, I’ve played it. So, it’s only natural that it’s the niche I chose.
So on to the first part, tracking growth of your niche. You
need to visit websites of organizations that are related to your market. For
gaming, there are two websites to look at: The Entertainment Software
Association (http://www.theesa.com/) and
the Entertainment Software Rating Board (http://www.esrb.org/).
Then there’s the NPD Group (http://www.npd.com/)
, which offers more than just data on games . In the ESA website, I can find
out about the industry fact such as the growth of sales – 22.9 percent in 2008
amounting to $11.7 billion, which tells me the potential for sales. It also
offers demographics data, for example: the average game player is 35 years old
and has been playing games for 12 years. This last fact will help me design the
online store for a more mature audience.
Meanwhile, the ESRB website which shows the rating of particular games will help me further expand my categories with ratings such as E (for everyone), T (for teens), E10+ (everyone 10 years and up) and more. While the NPD group offers a listing of the top ten monthly video games based on sales, which can help me construct a “best sellers” or “most popular” category.
Next thing to look at would be the individual news bits from
major suppliers in your niche. Subscribe to their feed, or if you can afford
it, attend industry expos and conferences. Again, for our gaming market, we
have the Electronic Entertainment Expo. Here, future releases are discussed.
Did you know that Nintendo is coming with a 3D handheld platform in 2010? If
you’re targeting the gaming niche, you should know. For instance, for
PlayStation the next big thing is the motion-sensing Move, similarly Xbox has
Kinect. Those are important data that you should watch out for and include in
your list of items to stock up on once they’re released. The earlier you have
it in your store, the faster you can move fresh inventory.
Next look at pricing. Some suppliers will start by selling a new product in their own website, setting the price point for the rest of the retailers. Microsoft did it with Kinect a few days ago by offering it at pre-order for $149.99. You can’t possible sell it higher than that, so you need to find out how low you can get it at wholesale and how much you can push the profit margin to the suggested retail price.
While foresight is certainly an advantage and can be done
with proper research, you also need to stay grounded and find out what your
potential buyers feel about certain products. Once all the hype for a new
product dies down, what you’ll be left with are buyer reviews. Get a head start
by studying what the market is saying in terms of product quality. This should
help you limit or increase the stock that you need to get for a certain new
product.
Sound complicated? It’ll all seem more natural once you get the hang of it.
Happy Selling!
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