Ecommerce Niches: Why Your Ecommerce Business Needs to Find One + 6 Top Niches for 2020

With so many different ecommerce brands in existence, if you want to buy a specific product, chances are there’s an ecommerce site that sells exactly what you’re looking for. Did you know there’s a pee cloth for hikers? Shavers for hairy backs? Toasters for tortillas? If you can think of it, most likely there’s a need for it!

By focusing on a specific niche, ecommerce businesses have been able to rapidly scale because of the unique product they offer, focusing on a specific gap in the market.

From meal replacements to beauty products, direct-to-consumer (DTC) brands focus on key differentiators that make their product stand out from their competitors. In this article, we’ll go over what it means to have an “ecommerce niche” and how it benefits business growth.

What are ecommerce niches?

Ecommerce niches are segments in an industry that sell a specific type of product with a unique differentiator. An ecommerce niche can include anything from nutritional items designed around a health trend, to eco-friendly products. 

3 reasons why your ecommerce business needs a niche

With millions of ecommerce sites selling products online, making your ecommerce business stand out from the competition can be a challenge. 

Unless your ecommerce business is within a small niche that can’t be matched, you need to differentiate your product and brand so customers are more likely to find your product and make a purchase. That way, you can join the small percentage (less than a million) of online brands selling more than $1,000 worth of product a month.

For instance, ecommerce brand Ample Foods sells keto-friendly meal replacement shakes and powders. Creepy Co sells apparel with a horror theme. EnduroSport is a supplement brand tailored to outdoor sports enthusiasts. BAKblade sells men’s grooming products with a unique, easy-to-use design. These brands have found their niche within a wider market to truly stand out.

ample meal - holiday gift guide

Here are more reasons why you should consider finding an ecommerce niche.

Fewer competitors

Unlike dropshipping, which deals with high competition, but makes it easy to get started, finding an ecommerce niche helps to limit the number of competitors that can attract and retain more of your customers. While it can be tough to create unique products that stand out against the competition, your long-term success can be improved by focusing on a niche and becoming the industry expert in what you sell. 

Find an audience easier

An ecommerce niche helps potential customers understand what your business offers. Most likely, customers are searching online for a product like yours that tailors to their needs. Rather than trying to serve a mass audience, you can sell the product that a specific audience is looking for. This also improves your ad spend with better targeting by spending less and attracting more sales.  

Once you find the right audience, you can expand your product selection to focus on products related to your niche. For example, FLEO Shorts grew because of its popular Crossfit shorts, but they were able to leverage their growth to create other types of Crossfit-related apparel. 

fleo

Limit inventory and storage costs

Finding storage space to accommodate new ecommerce inventory takes time and money. And the more products you have, the more expensive it will be. Depending on the type of products you sell, you may also have to account for special storage conditions.

Having an ecommerce niche means you can spend less on storing and managing inventory because you’re only selling specific products rather than hundreds of SKUs (stock keeping unit). By focusing on a niche, you’re able to optimize your ecommerce warehousing space and keep storage costs down.

How to build a thriving ecommerce niche business in 7 steps

Want to start an ecommerce business focused on a profitable niche? Here are the eight steps to take:

1. Piggyback on the latest trends

High-demand products like CBD oils, probiotics, specialty tea, and eco-friendly items grew rapidly in 2019 and will continue to grow in 2020. Jumping on ecommerce trends is a simple way to quickly create a niche. But make sure the trend has lasting value (e.g., fidget spinners were popular for a few years ago, but quickly faded out).

While the COVID-19 pandemic has called for a higher demand of essential products like hand sanitizers and face masks, it’s hard to say if any of this will be considered a long-term trend. But many brands have found a way to support those in need during the pandemic by expanding their product line with high-demand items that tie into their niche offering. 

For instance, personal care brand PiperWai is known for its charcoal-based deodorant, but they decided to utilize the resources they already had to launch a hand sanitizer that embodies the scents and packaging their audience loves. Already, they’ve noticed customers buying both products from their online store. This could last, since hand sanitizer is commonly sold with other hygiene products. 

“We had stock on hand we could recycle into a new formula for hand sanitizer. It was by far the fastest product launch we’ve ever done.”

Sarah Ribner, CEO & Co-Founder of PiperWai

2. Leverage any unique connections or interests you have

Some niche ecommerce businesses started because the founders had a hobby and realized other people could benefit from their product. Or they realized they can create add-ons and accessories for popular products (like phone cases for smartphones). These are natural starting points for an ecommerce niche.

For example, Anastasia Allison loves the outdoors, but she was disappointed when she saw toilet paper left behind on her favorite hiking trails. She soon launched her ecommerce brand, Kula Cloth, an antimicrobial pee cloth that eliminates toilet paper waste in the wilderness.

3. Make sure there’s an audience for your niche

By taking the time to do market research, you can find out if there’s enough demand for your idea and if it’s a profitable niche. For instance, there’s a sizable market for handmade furniture, but is there a market of buyers looking for handmade furniture made only out of cherry wood? A targeted, well-defined audience is key, but go too specific and you might end up limiting your potential growth. 

4. Do keyword research

Keyword research is a valuable SEO (search engine optimization) strategy for finding out if people are searching for the types of products you sell or want to start selling. By using tools like SEMRush or Ahrefs, you can look up what people are searching for and get an idea of the competitive market. 

5. Build out content that targets your niche

Once you’ve done some keyword research, you can create guides, articles, and other types of valuable content using those specific keywords in blog posts, optimized landing pages, and more. 

The more specific your niche, the easier you can get your content to rank on Google. It’s going to be tough to rank for “organic makeup” but it can be significantly easier to rank for “cruelty-free vegan makeup.” When searching for the right keywords, look for relevancy, competition, and search volume. 

With advertising costs generally growing over time, targeting the wrong audience can be costly. By focusing on a niche, you can identify and target your audience easier and in a more cost-efficient manner with engaging content related to your product. The more targeted you get with ads, the more expensive your cost per lead may be, but at least you will be putting your brand in front of only those who are in your potential audience. 

6. Research the competition

You’re likely to have at least a handful of competitors that are already selling something similar, but that doesn’t mean you can’t find a way to make your product stand out. When researching an ecommerce niche, take note of your competitors, and look for ways to further differentiate your product.

For example, let’s say your competitor is a protein powder company whose reviews mention the products taste horrible. With that information, you may decide to create a tasty protein powder and use that as your competitive advantage. 

One potential competitive advantage to look for is delivery speeds as shipping can build loyalty. Most online shoppers want their products delivered within two days. Fortunately, launching a niche ecommerce business with 2-day shipping can be done by partnering with a third-party logistics (3PL) provider like ShipBob.

7. Optimize your pricing

Correctly pricing your products can help your ecommerce business grow and become more profitable. By focusing on a niche, finding the right price point is much easier. If you look at your competition and notice they all have similar price points, you can use this as an opportunity to create the same product at a lower cost to undercut your competition. 

Or you can use it as an opportunity to create a higher-priced product that stands above the competition — which is a good strategy for high-end luxury products. With a higher margin, you can even offer free shipping.

6 examples of ecommerce niches

There are countless ecommerce niches today, and this will only expand as people get more creative. Here are some current examples of ecommerce niches that offer high-demand products.

1. CBD

CBD is all the rage in 2020. With CBD becoming increasingly legal to sell in the US, many ecommerce businesses are starting to sell CBD online in this young industry. While CBD isn’t fully legal on a global scale, many brands are able to fulfill CBD orders in the US.

2. Cosmetics and skincare products

The cosmetics and skincare industry is one of the most popular ecommerce verticals. From men’s makeup to vegan beauty products, there are always new brands popping up.  Cosmetics and skincare tend to be very personal and must fit the specific needs of the individual, which makes this market full of small niches to launch into.

3. Meal replacements and protein powders

Meal replacement shakes and powders have become a popular option because they are typically healthy, provide a quick meal replacement, and only take a few minutes to prepare. People are busy, and having the time to cook meals every day isn’t feasible for some people. Meal replacements are also a great solution for those who actively exercise and use meal replacements for their post-workout routine.

4. Eco-friendly products

Customers are becoming more conscious of how products affect their bodies and the environment. Products like metal straws, bamboo toothbrushes, reusable feminine products, and biodegradable plastic bags are becoming increasingly popular ecommerce niches. Many new and existing ecommerce brands are beginning to highlight how their products — and their eco-friendly packaging — are good for individuals and the earth. 

5. Men’s grooming products

Ecommerce businesses focused on men’s grooming products aim to make the grooming process even easier for men. They view traditional grooming options as broken or complicated, so their goals are to educate men about how to properly groom themselves and how their tools can help. 

6. Nutrition and wellness

Many people are turning to nutritional and wellness products like vitamins and supplements to help improve their health. Many customers are willing to try new vitamin brands out to help improve their diets, mental health, energy levels, and more. 

Combining your ecommerce niche with 2-day shipping and fulfillment

Beyond offering a unique product, the ability to offer 2-day shipping is the biggest competitive advantage for your ecommerce business. By partnering with a 3PL like ShipBob, ecommerce businesses can begin to offer an Amazon-like experience proven to increase average order value, reduce cart abandonment, and improve your customer lifetime value (LTV) to help scale their business. 

At ShipBob, we work with ecommerce niche businesses to help them scale and grow their business through fast order fulfillment, a growing network of fulfillment center locations, and distributed inventory solutions. 

Here are some examples of how niche ecommerce businesses have grown quickly with ShipBob:

Nature’s Ultra:  CBD products

Nature’s Ultra produces organic CBD products combined with powerful Young Living essential oils. With ShipBob, they’re able to offer affordable 2-day shipping to 100% of their US customers.

“We place considerable expectations and pressure on shipping so we can get close to what Amazon does. With ShipBob, 100% of our orders are going out via 2-day shipping. We see that people are far more likely to order and keep ordering from us when 2-Day Express shipping is an option.”

Andrew Hardy, COO of Nature’s Ultra

Ample Foods: Meal replacements and powders

Ample Foods’ meal replacement combines the latest nutrition science with real-food ingredients for a complete, on-the-go meal replacement. Ample Foods partnered with ShipBob to increase 2-day ground shipping coverage for customers by 103% by distributing their inventory. 

“From expanding into a second ShipBob fulfillment center, we are excited to be able to offer 65% of our customers with 2-day shipping, up from 32% by only having a single West Coast facility. Soon, this will be 100%. Not only is this better for our customers but we also gain a 13% savings to our bottom line.”

Pablo Gabatto, Business Operations Manager at Ample Foods

Boie: Eco-friendly personal care products

Designed and manufactured in the USA, Boie offers toothbrushes and body scrubbers that are eco-friendly and antibacterial. Boie tested out their niche by launching a Kickstarter campaign with a goal to raise $10,000. Within a few weeks, they had 4,033 backers raising a total of $96,633. 

With unexpected demand, they partnered with ShipBob to fulfill a large volume of orders quickly. 

“ShipBob has been with us since day one of shipping our Kickstarter backer rewards and has since fulfilled nearly a quarter of a million orders for us.”

Manuel de la Cruz, CEO at Boie

Prymal: sugar-free coffee creamers

Prymal offers the first of its kind sugar-free coffee creamer that doesn’t compromise flavor. After a disappointing experience with their first 3PL, Prymal soon switched to ShipBob so they can focus on business growth.

“Last July, Prymal reached $40,000 in revenue. After switching to ShipBob just four months later in November, we are reaching $160,000 a month in revenue — that’s 300% growth. We’re also saving $8,000 per month in fulfillment costs.” 

Courtney Lee, founder of Prymal

TB12: Nutrition and fitness products

Co-founded by Tom Brady, TB12 is a health, wellness, and fitness brand that sells supplements, protein powders, and fitness items. Since partnering with ShipBob, they have seen an increase in conversions by offering free shipping thresholds and 2-day shipping.

“We need to deliver quickly and inexpensively. Since switching to ShipBob from our previous 3PL, our fulfillment cost on comparable orders went down by 25%.”

Michael Peters, VP of E-Commerce Operations at TB12

How ShipBob can help bring your ecommerce niche idea to life

There are many benefits to working with ShipBob for your niche ecommerce business. Managing your own warehouse can be time-consuming and expensive. Additionally, labor, shipping, and other costs make in-house logistics and warehousing an unappealing option to many ecommerce companies.

ShipBob is a trustworthy partner for fast-growing niche ecommerce brands. They fulfill orders for thousands of brands across several ecommerce niches, using a growing network of fulfillment centers around the world.

By working with ShipBob, brands in ecommerce niches don’t have to worry about order fulfillment and logistics and can focus more on growing their business in the following ways:

Increase conversions with 2-day shipping

2-day shipping is a proven conversion tool that increases sales. Customers want their orders fast and may even be willing to pay a little extra for it. By leveraging a network of strategically located fulfillment centers, your customers can get products delivered quickly without you needing to build out your own network.

Better inventory management

ShipBob’s dashboard gives you the information you need to manage inventory without having to store products yourself. Inventory levels for all your products can be easily tracked throughout the fulfillment process and you can set automatic reorder point notifications to avoid stockouts.

Distributed inventory

ShipBob makes it easy to split inventory across multiple fulfillment centers to reach your customers faster. By reducing the average shipping zone your orders ship to , you can significantly reduce shipping costs. Distributed inventory is a factor that helps bring  higher customer satisfaction and repeat purchases.

Order management

With real-time visibility into the entire order management process, you can keep customers up to date and also easily access order metrics and track fulfillment performance. ShipBob’s proprietary technology allows ecommerce merchants to manage orders from picking to packing to shipping and returns

Conclusion

Your ecommerce niche can find success and profitability if you find the right audience that’s willing to pay for your unique products. If you want to learn more about how your ecommerce niche can grow through ShipBob, request a fulfillment quote below.