Itching to Expand Your Product Niche?

After years of tinkering in his woodshop making bird houses, Bob said to himself, “I ought to be selling these bird houses on the web.” After construting a quick website, Bob is open for business, and, before long, Bob could be itching to expand his online inventory.

It’s no secret that many ecommerce businesses and auction stores are launched around an owner’s hobby.

Once sales start to ring up, the natural question is to ask, “Now what?” When you want to expand your online business, be careful. Experts counsel that successful Internet businesses are built by maintaining unique niches. There’s nothing wrong with expanding, but make the expansion an extension of your current business.

Niches get you noticed

“You want underserved or underdeveloped markets,” said Lisa Suttora, founder and CEO of WhatDoISell.com. “If everyone else is selling a product, and it’s a popular product doing well with huge saturation, it’s not where you want to go. You may want to look at accessories complementing the product, but you are more likely to build a sustainable business selling a niche product. When you sell in a niche, you can put all your monetary resources toward specifically designing an online presence that is going to resonate with your target market. If you want to be successful in the fastest way, you need to find a niche, fill that niche and focus on that niche.”

According to niche-marketing coach Barbara Casey, “a niche gets you noticed.” Casey said that a niche is a great way to:

1. Rise above the competition;
2. Sign up colleagues as clients;
3. Get referrals from colleagues who don’t have your specific expertise;
4. Get “slightly famous” in your field.

Whereas the temptation might be for Bob the bird-house maker to diversify into products that aren’t bird related so as to draw in new customers, experts council just the opposite – build around your expertise.

If Bob wants to add product lines, he should seek out suppliers for birdseed, bird lawn ornaments, bird perches, bird feeders, birdcalls, bird baths, etc., and become a resource for “all things bird.” By working with wholesalers that drop ship, Bob doesn’t have to invest in inventory for his new offerings; he can continue making bird houses in his shop and enjoy the benefits of greater site traffic and a growing reputation as a bird-product aficionado.

Be distinctive in the marketplace

Though price is important to a consumer, keep in mind that if everyone is buying his products from wholesalers, all sites’ prices are going to be similar. An online business needs to do additional things to be distinctive in the marketplace, build consumer loyalty and continue to draw new traffic.

Product Sourcing Editor for eBay Radio and Worldwide Brands CEO Chris Malta said that the design and functionality of a website, the customer service provided and the strategy used to market the site can be key elements to help get you a better profit.

Other ideas to consider when trying to expand the presence of your business include using quality, targeted keywords at search engines, affiliate marketing, participating in blogs and forums on other sites, hosting blogs and forums on your site, launching an enewsletter and submitting columns to newspapers and industry publications.

Be an expert in your niche

Becoming known as an expert in a niche market can help distinguish you in the global marketplace among the nearly 12 billion web pages the Internet offers.

Before you decide to make your hobby your business, however, take the experts’ advice: do thorough research.

“Whatever products you think might work for you will require your considerable research to know whether they can, in fact, be sold profitably in a way that’s acceptable to you,” wrote Joseph Sinclair and Jeremy Hanks in their book eBay Inventory The Smart Way. “In other words, you have to become an expert in the product and the market for the product. You need to know how it’s used, just as if you had been in business selling the product or had used it in one of your activities. There are no shortcuts here.”