Specialization in niches for eCommerce niches

We refer to the area of specialization of a specific company and the segment or segments of audience that consist of. 

On the internet or in retail market is always fragmented and often it can even be a little more fragmented. This is the key: split the segments into small business units that respond to specific needs of certain audiences that are not satisfied yet or have not found its maximum point of saturation in terms of competitors yet. 

When you apply some extra segmentations to those large segments it is when niches begin to appear. If you decide to sell clothes for children and you are fine-tuning, although you still keep a representative (and competition) monthly search volume. Then, if we add the variable "same clothing for children and parents" it gets much more interesting, this is a very specialized niche. 

Obviously, any business is ruled by profitability. Deciding on a niche or another is a very delicate moment because it will mark the entire strategy, from the level of product or sales channels to communication. 

Search volume determines the interest that exists currently. Ideally we will search for niches that have enough searches as to generate potential clients from any online channel (SEO, SEM, Social Media, direct...). When we have the product very clear but we see that there are no searches, it does not mean that we have to give up, but it is true that the work of "creating those searches" is not simple and supposes an investment far greater that exploit an existing audience. 

The level of competition is also important because if there are enough searches and few competitors you have the perfect storm. On the contrary, there may be not many competitors and also not many searches: Here, we would have to reconsider what we talked about in the previous point that is: Is it worth creating the niche from scratch? Is it feasible? 

As for the average ticket and recurrence, these are two complementary values but which can determine the viability of the niche. If your average ticket is high, even if you produce a relatively small number of sales, you will be covering the needs of profitability. On the other hand, you may not sell your products so expensive, but they should be of high rotation, or that your audience is very loyal and place recurrent purchases. This would balance one thing with another. 

In addition to all we have already mentioned, I would add scalability. If you go to the market with a particular product or products do you have margin for growth? Are there other lines related to these products and your niche allowing you to increase sales? This often happens, but in marketing all what you can strategically plan is a step forward, anticipating what you will do in the future will help you to act in the present without closing doors or complicating the decisions you will have to make later on. 

The truth is that I have no doubt: specialize in niches is the best strategy for eCommerce. At least, if you do not have an almost unlimited financial capacity or cross product that everyone wants. That is, or you are Coca-Cola or you should work on niches. 

The main advantages is that they can become very profitable, they are scalable because they allow you to sell more products or services related to the current ones, or open to related niches. You have a greater control over the investment and, in addition, it allows you to set your branding from scratch and become yourself not only a commercial benchmark but also an advisor (people will rely on those coming first if it shows a career).