Building A Successful Ecommerce Business: Find A Niche – Part 1

Over the years of running my own ecommerce businesses I have learnt to find markets, rather than create markets. Finding profitable niche markets is the smarter option than to create a new untested market. Many ecommerce businesses fail because they tried innovating new products that no one wanted and spending all their time and resources on a product they wanted for themselves. I can tell you from experience that I have tried an unknown product in some of my ventures and unfortunately they did not take off the way I hoped. I also did research but not thorough enough and I went by instinct rather than relying on the facts. The facts told me that it was not going to be viable and I was forcing myself to make it work. When you have a feeling of uncertainty, it is a signal to say get out or do not do it.

I want to show you how to find profitable niche markets and how to overcome some of the mistakes I had when I was starting a new ecommerce business.

Find Your Niche

Research is the key to your success in finding a profitable niche market. No matter how good a product sounds or how good someone else says about your idea, you need to do your own thorough research. Sometimes just reading one article or hearing a few testimonials from others is not enough. There are 3 major qualities to determine a profitable niche market:

1. Exists already
2. Easily identifiable
3. Marketable and targeted

Looking for a profitable niche market is about finding the buyers first. Most people start off with the wrong idea and look for a product to sell first. Find out what their problems or needs are and then provide a solution. A classic example from my experience is how I started the Dragonboating business. I was frustrated to not find any company in Australia offering carbon fiber paddles to the dragonboat teams. Furthermore, to order and delivery one from overseas took months. So I decided to create a company and become a distributor of carbon fiber paddles in Australia and guess what happened? Paddlers came flocking to my company and buying dragonboating gear from me and I made money whilst I continued to dragonboat.

Determine How Hungry Your Buyers Are?

Once you can determine whether or not your idea or passion works, then it’s time to really test the market and see how hungry these buyers are. The easiest way to determine how strong the demand will be for your idea is to do research on keywords in that market. Here are the 3 steps in determining if your idea is viable:

Step 1: Investigate Traffic Volumes.

This is the first and most important step. If you find out that your keyword only has 20 people searching for it, it may not provide a good income from that niche. To investigate how much traffic you will get for your niche market keyword, go to http://freekeywords.wordtracker.com or any other similar site and type in a broad term such as golf. The site will give you a list of the top 100 search results for that word. For example, you will find golf clubs, golf carts, golf buggies, golf gloves and so forth. Next to each phrase you will see the number of daily searches. Using this list, select the results that have enough searches to determine your targeted niche market.

Step 2: Determine The Amount Of Competition.
Your next step is to find out how many people are competing for the keyword you are wanting to market your idea to. Ideally you want to find out who are the advertisers and marketers and take note of this:

• Few competitors = great keyword
• Lots of competitors = not a good keyword

To determine the level of competition, go to Google.com and type in each of these potential key phrases from step 1 and make a note of how many competing sites there are in that market. See the number of results near the top right of your Google results page? Write that number down next to the keyword you searched.

Step 3: Find Out If There Is Money In This Niche.

The final step is to find out if the buyers you are targeting are willing to spend. There is no point targeting a market where everything is free because these buyers will expect this as well, meaning it is not a good market to target. Continuing your Google search from Step 2, record the number of advertisements that appear for each keyword that you search. If there aren’t any ads, then it is not a niche worth targeting.

I would suggest spending at least a few hours and compiling the information together as part of your research. This will help you determine if your idea is viable for your targeted niche market. If you follow this to find out if there is a niche market for your idea, then you will be on your way to building a successful ecommerce business.

Follow on to the next post as I will show you how to create the content to market your idea: Building A Successful Ecommerce Business: Creating Content – Part 2

Tyrone Shum
Building Niche Ecommerce Businesses

WP e-Commerce Review For Wordpress

WP e-Commerce plugin for Wordpress seems to be one of the most commonly used (currently 175,000+ downloads) shopping cart system across the board. I’ve been testing the latest version 3.6.10 and it has a lot of additional features compared to review on eShop I wrote recently.

The WP e-Commerce Wordpress Plugin was developed by a New Zealand company called Instinct. Since this company has dedicated funds and resources to this plugin, I presumed they would want to make money from selling this plugin. Lucky for us, they didn’t and have been giving away this plugin for free. Though, the first thing you will see on the front page of their website is the following:

Home of the famous WordPress e-Commerce Plugin

The WordPress e-Commerce plugin is a state-of-the-art e-Commerce platform with a focus on aesthetics, web standards and usability. It is both free and priceless at the same time.

Now, being the state of the art e-commerce plugin is a bold statement and I have tested out numerous e-commerce software that I will be comparing this too. Let me review this plugin to test if their statement is true.

THE PROS

Easy Installation
It took me less than 5 minutes to upload and install without any errors or conflict with other plugins so far. I could easily find the newly created section in Wordpress administration called e-Commerce. It contained Sales, Products, Groups, Variation, Marketing and Settings links making it very easy to find what you need. I am glad they did this and made it simple.

Well Defined Categories / Groups Section
There is a self-explanatory tab that says Groups which allows you to add unlimited categories and subcategories to your shop. It’s very standard to see this available in e-commerce systems and it’s great to see this part of WP e-Commerce plugin. In comparison to other Wordpress shopping cart plugins they utilise pages to separate categories and it becomes a total nightmare without proper documentation.

Adding Products Is Easy
Adding products is easy when you click on the Products link. It offers a wide range of settings to customise your products including price and stock controls, shipping and weight settings, product variations, merchant notes, product downloads, coupon codes and promotions. These are very important when you have different products to sell and helps you distinguish between A and B product.

Widgets make customisation a breeze
What I’ve found quite handy are the customisable widgets that you can install on your sidebar as part of this plugin. A common widget people have on their website is the shopping cart. Having this displayed allows a customer to see what they have currently selected, then head to the checkout section to pay for all their items. The new widgets you’ll see in this plugin are: Shopping Cart, Groups, Categories, Price Range, Product Specials, Latest Products, Price Range and Donations. You can select anyone of those to display on Wordpress at any time.

Profit Using Marketing And Cross Promotion Tools Provided
Under the Marketing link it allows you to offer coupon codes for any product in your range. It’s a great way to encourage your customers to shop with the coupon code to follow through with a purchase. It’s a definite plus for me to have this tool built into the system. Some additional options you can switch on are:

• Cross Sales within your shop
• Show Share This (Social Bookmarks)
• How Customer Found Us Survey option

Many Payment Gateways Available and SSL Connection Included
WP e-Commerce comes with a few pre-installed payment gateways including Chronopay, PayPal, PayPal – Express, Google Checkout, and manual payment (for cash or money orders). If you want other payment gateways they offer such as Authorize.net or eWay, then you will have to purchase the Gold Cart Module. Also all transactions are processed securely through an SSL connection if you have SSL installed on your server.

An e-Commerce Plugin That Is Free
Lastly to top off the PROS, WP e-Commerce Plugin is FREE and it’s worthwhile to try it if you are considering using a shopping cart facility in Wordpress.

THE CONS

Lack Of Documentation
I am quite surprised from a company that has devoted resources and time to develop this plugin that they do not have a detailed documentation available. Especially when programmers develop a software there needs to be a way to track back and make changes, which is where documentation helps. So I was a bit disappointed. Their website has a very good “description” of each section but lacks in details on how to install, modify and add other functions. If you’re a beginner and do not have any programming experience then I would forget trying to tweak any of the files yourself because you will get frustrated reading through poorly organised code, with insufficient comments. I suspect they want to keep the details of the code within the company so they can offer add-on solutions they can sell.

Invoice Printing Is Not Available
This may sound simple to implement, but I am very surprised that this is not standard in their plugin. Most e-commerce software have options to allow you to print invoices, packaging slips (which is available) and labels. This is one area I believe they have totally overlooked. How do I print out an invoice to send to a customer or a label to put on my shipping box? I know you can just hit print on your Internet browser screen but what if I want to customise the invoice or label in different sizes? This is an area that Instinct needs to look at.

Inclusive of Tax Option Is Not Available
For business owners operating in Australia like myself, our customers expect that prices displayed have tax included. Unfortunately the plugin forces you to add tax separately at the checkout and only show prices excluding tax on each item. It’s another issue that needs to be address for future upgrades.

Lacking Reports
If you click on the Sales link, it will take you to a page showing sales for the month and columns of basic data, such as sales, pending transactions and closed transactions. There are no reports to say where your customers come from, no reports for sales of dollar amounts, quantities sold and customer item was sold to. These are usually standard within an e-commerce software and also very important to have if you’re running a business. One just has to look at ZenCart’s reporting system to get an idea of how comprehensive their system is.

Lack Of Template Options
A few other reviewers have mentioned about the lack of template options available. At the moment there are 4 or 5 of them, and most of them have proven to be not very useful. Additionally if you have a customised template for your blog, integration of this plugin can be a real nightmare because there are no detailed documentation on how to edit certain areas of this plugin.

Conclusion
I am still on the hunt to find a state of the art e-commerce plugin for Wordpress. I think Instinct have made a very bold statement about their plugin and personally I still see further development needed for this plugin to be a complete turn-key solution for an e-commerce site. For a beginner to use this plugin it maybe sufficient enough to do a few transactions per month. But for a business owner, I would still stick to other solutions available such as ZenCart, OsCommerce and Magento.

My rating for this plugin is a 3 out of 5 stars.

Tyrone Shum
e-Commerce Plugin Commentator