Today I am pleased to offer a guest blog entry by my friend, a great writer and very funny person to boot, Mikal Belicove. You can read his regular Beliblog and get other info at www.Belicove.com.
Choosing your market niche By Mikal E. Belicove
If you and I were to decide to go into business together, and we chose to
open up a brick and mortar store on Main Street, there's no way we'd sign an
18-month lease, order display furnishings, install carpet, hook up a phone line,
and hire employees without first knowing what we're going to sell. Yet, online
retailers--or, more accurately, casual sellers who want to become successful
online retailers--do it every day.
Without giving much thought to a company name, product line, or business or
marketing plan, new online sellers sign up for product sourcing services, work
with a third-party vendor to build a webstore, and only then get around to
asking, "Hey, what should I sell?" They head to eBay, see what�s selling, and
then decide to sell the same products--usually consumer electronics--for
slightly less than the competition. They end up being disappointed, mainly
because their profit margins are so low.
The problem is that these misguided novices have nothing unique to offer,
so they try to compete on price alone--an almost surefire way to go bust. One of
the keys to online retail success is your ability to establish yourself as the
person or the company from which to purchase a particular selection of related
products. Tiger Woods, for example, would be better off selling golfing gear
than home d�r� something that Martha Stewart is more qualified to sell. (For
additional details on how to compete on something other than price, please see
my two-part series, "Giving away the store," which will appear in this column
later this year.)
Selling what you know
What�s interesting is that first-time online retailers often overlook their
own areas of expertise and passion. A guy who�s spent his entire life fiddling
around with car engines in his garage suddenly decides to start selling video
games, because they�re so popular with the kids in the neighborhood. Or a gal
who�s had a lifelong passion for photography decides to open her own major
department store online, selling anything and everything.
In my line of work, I have the unique opportunity to meet many talented
individuals who simply started out by choosing the wrong products to sell. One
of these gifted people, whom I fondly refer to as �The Dart Lady,� was
interested in selling consumer electronics, despite the fact that she really
enjoyed schooling men in the art of throwing darts at her local pub. She knew a
ton about darts, was very passionate about playing, and kept up on the local,
regional, and world dart scene. As soon as I pointed out to her that she could
sell darts and dart-related equipment online, her eyes lit up with a ton of
possibilities. In her case, a female focusing on darts made her unique, as did
her product knowledge and sheer passion for the game.
I also recently met a gifted musician who never considered using his
musical talents to his advantage. He was at a complete loss as to what to sell,
so he dabbled here and there as most online retailers do, simply experimenting
with different products in the hopes that he would hit it big. When I pointed
out to him that he could use his knowledge and talents to market himself and a
line of musical instruments and accessories, he too say an infinite amount of
possibilities for his online business. Now he�s selling what he knows, and for
his local clientele, he offers lessons to accompany specific purchases.
I even met a fellow who managed to transform his work experience at a major
amusement park into a successful business. I didn�t teach him much, because he
understood the importance of picking a niche right from the start. He had worked
for a number of years in catering at a theme park and noticed how much kids and
grow-ups alike liked carnival foods. He took his product knowledge from that
space and applied it online by selling cotton candy machines, popcorn makers,
snow cone machines, and so on�an excellent example of someone who is using his
product knowledge to price, market, stand out, and sell products online.
Identifying your areas of expertise
Follow in the footsteps of these and other successful online retailers�sell
what you know. If you have trouble identifying areas of expertise, answer these
six questions:
- What do you know a lot about?
- What are you most passionate about?
- What are my hobbies and pastimes? Are you a weekend mechanic? A
seamstress? A sports fanatic? A movie buff?
- How do you spend your free time?
- What kind of professional training and experience do you have?
- Find something that makes your eyes light up, and you�ve probably hit on
the right line of products.
Researching your niche market
Once you�ve identified your niche market, you can begin researching the
market to learn more about your customers� wants and needs. The good news is
that since you will be working in areas that interest you, the research won�t
feel much like work.
As you begin researching your niche market, keep the following in
mind:
- Knowing your product is not equivalent to knowing your customer. You need
to know your customers� wants and needs. Using the products you sell and being
involved with other�s who use those products can give you a clearer sense of
what people need.
- Base your decisions on research. Use a free market data research too like
Terapeak�s database of completed eBay listings. And, if you sell golf gear, for
example, you may be able to do a little research by going golfing on
Saturday!
- Stay on the leading edge. Don�t follow the crowd by selling what they�re
selling and how they�re selling it. Develop your own unique vision based on your
research and your experience. Attempting to sell what�s hot usually turns into
trying to sell what used to be hot and then being disappointed.
- Get involved in your industry. Read trade publications related to your
market, attend industry conferences and trade shows when you are able, and
mingle with the people who manufacture, market, and use the products you want to
sell.
Remember: Pick your niche, research your market, and then pursue it.
Follow your heart, and sell what you know.
About the author: Mikal Belicove is an Orem, Utah-based freelance
writer, ghost blogger, and business communications consultant. Most recently, he
was the Director of Community & Education at Doba--an online product
sourcing marketplace that connects retailer merchants with the inventories of
hundreds of drop ship suppliers. When he is not penning assignments for clients,
he can be found musing about the world around him on his own personal blog at
www.Belicove.com.
