Starting An Online Business This Year? Critical Considerations For Every Digital Entrepreneur
Is 2020 a good year to start an ecommerce business?
We’re going to be straight with you––anytime is a good time to start an ecommerce business. As a Shopify Plus agency, we know a lot about the ins and outs of setting up a storefront, business development, marketing, maintenance, and growth. There are a few reasons why we recommend kicking off your own online venture, especially in 2020.
One is that running your own business is massively rewarding, particularly once you’ve built a well-oiled enterprise. And after the year we’ve all had, there’s a pretty hefty demand for some financial and psychological reward.
The second reason is what makes the first one possible: people are always shopping. What’s more, while big-ticket item sales may have decreased in light of the global economic state, small-ticket items aren’t overly impacted and they are where the real money hides out––necessary products that require regular replenishing.
Perhaps though, the most important question is, what should you sell? It makes an important distinction: is 2020 a good year to start any ecommerce business or YOUR ecommerce business?
Start Here & Keep Moving - What’s So Hard About That?
We’ll explore each of the following considerations every starting entrepreneur should make, but to give it to you right upfront––
A few general rules factor in here. The first is that you should find a niche. Competition is perhaps the most significant consideration, because if 1M other vendors are selling your chosen “niche” product, then everyone is scrambling to get theirs to the front of the line.
Let’s define the word niche though, because there is a bit of confusion.
Niche – “relating to products, services, or interests that appeal to a small, specialized section of the population.”
Following that definition, something like mint toothpaste isn’t niche (neither are probiotics nowadays!). But, if you’re planning to sell 100% organic mint toothpaste with 24-karat gold flakes, handcrafted from the rare dicerandra cornutissima species of mint by Florida-born Ayurvedic naturopathists, then yes, you probably have a niche.
Gently stated, unless your product serves a very specific demand or population, you don’t have a niche.
Notice how we highlighted the word demand? Economics 101 upholds the law of supply and demand. There’s no point in supplying anything the public isn’t outright asking for. And they certainly aren’t demanding it if competition is high because such a buyer’s market serves them up the luxury of choice. And if you’re overstocked on said items, then be prepared to reduce your prices to clear your inventory.
(As an aside, there’s an interesting economic structure at play in Indonesia that has this law a bit backwards. When demand is low for something like accommodation or vehicle hire, local business owners tend to increase their prices to make up for lost income. As I’m sure you can imagine, this approach does little to sway tourists toward their product or service offering!)
Although it may seem obvious, profit is a critical consideration too. Is your chosen product affordable to source, market, store, sell, and ship?
How To Choose A Niche
This is the million-dollar question––and it’s easier to answer than most people think. It does require a bit of leg work, however, in the form of research and creative thinking.
Here are some tried-and-true approaches to selecting an effective niche. Keep in mind the competition, demand, and niche, but consider too what is personally motivating for you. Ultimately, a keen interest in a particular niche will keep your eye on the prize, and you’ll be able to devote sharper attention and more “heart,” so to speak, to your business.
Amazon Best Sellers Page.
Start by randomly choosing a product category and identify the most popular items. Then look at the number of sellers, reviews, questions, and volume of stock. These four measures point to the level of engagement with a particular product, and engagement is the backbone of any online enterprise.
Trending on Google.
Go to trends.google.com and type in a search term, and it will spit out a graphical representation of consumer interest in that particular product. From there, it’s pretty straightforward.
Walmart Best Seller Ranking.
The only catch here is that you must already be a Walmart Marketplace Seller. Once in, follow similar instructions to those outlined above for Amazon BSP, but instead, navigate via Growth Opportunities –> Super Department –> Subcategory (your choice).
Google Keyword Planner.
Here you can identify product marketing costs and competition for your chosen offering. Enter your seed keyword to determine the degree of competition, the PPC (cost per click), and the average number of monthly searches.
What Types of Products Are Gaining Popularity?
More people are choosing a plant-based diet these days in response to the incredible impact cattle farming has on the natural environment. But veganism concerns far more than just food. It’s any product that contains animal or animal byproducts, including clothing, health and beauty products, cleaning aids, and more.
Anything COVID-19 Related.
Surrounding any niche market is a much bigger market to consider: the current state of the world. We don’t need to remind anyone what 2020 has created! So, let’s capitalize on the COVID crisis, shall we? We’re not talking masks here––it’s possible that boom may have reached and passed its peak. In all seriousness, we’re spending a lot more time at home these days, and with that comes a need for more stuff that supports the following situations:
- Working from home (think: ergonomic office furniture and equipment)
- Keeping the kids occupied and engaged (think: learning activities, play-castles/houses, and good old fashioned toys)
- Staying healthy and fit (think: home exercise equipment)
Pet stuff will never lose popularity points. Most people have pets these days, and pet supplies, such as food and treats, regularly need replacing. But novelty pet products are getting a lot of buyer attention these days. Things like anti-stress vests for dogs and fly masks for horses help people give their pets holistic care, and things like nail pawlish for dogs boost pet vanity.
Check out the top 10 highest selling product categories on Amazon in 2020 in the following list. The first four offer no surprise, and they align with “anything COVID-19 related” we described above. In fact, most of them are in some way related to oodles of time spent at home.
If you’re starting from scratch, this is a useful reference. The first one pretty much hits it out of the park, though if you niche down strategically, any of the top six have sound potential.
Home & Kitchen 45%
Sports & Outdoors 23%
Toys & Games 22%
Health, Household & Baby Care 21%
Beauty & Personal Care 21%
Kitchen & Dining 20%
Clothing, Shoes & Jewellery 19%
Garden & Outdoor 16%
Tools & Home Improvement 16%
Source: As reported by Jungle Scout, June 2020
If you’re choosing Shopify as a platform, you’re already off to a great start. As a Shopify partner, we can help with set-up, launch, marketing, and pretty much everything related to starting up your ecommerce business.
And we offer a free strategy, which you can book right here. Don’t hesitate to contact us if you’re dreaming big or ready to tackle the practicalities of online entrepreneurship, we want to hear from you.
September 23, 2020