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Deciding on Your Ecommerce Niche? Ask Yourself These 6 Questions

In the Talking Heads song, "Found A Job" David Byrne sings: "If your work isn't what you love, then something isn't right." Many entrepreneurs have found they can make a good living pursuing an activity with which they are intrigued. When you think about it, this makes perfect sense. If you enjoy it, you're likely more knowledgeable about it than most people and are best positioned to do well offering it for sale.

Still though, some products lend themselves more readily to ecommerce than others, regardless of if you're using a website builder for your ecommerce needs or not. From a business perspective, your passions shouldn't outweigh practical considerations such as how readily your products function within the constraints of ecommerce. When you're deciding on your ecommerce niche, it's important to ask yourself these six questions.

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How likely is this product to be returned?

Regardless of how much you love it, when you sell it, you want it to stay gone. The best ecommerce products are items with which people are most likely to be satisfied. This might sound like common sense, but it's a lesson a number of would-be entrepreneurs have learned the hard way. Similarly, you want to make sure your products can withstand shipping, as well as ensure your packaging protects against shipping damage to minimize the likelihood of returns.

How expensive is it to ship?

One of the biggest enticements an online store can offer is free shipping. Next to sales tax, this is one of the biggest expenses e-customers look to avoid. This means you'll bake shipping costs into your pricing structure. While it's relatively easy to do this with something small like a watch - it's considerably more difficult with a piano. Ideally, your dream products will have low shipping costs.

How much storage will I need to adequately supply my products?

One of the advantages of an online store is the elimination of the costs of a brick and mortar facility. However, some products must be kept on hand so you can expedite shipping. While drop shipping companies do exist, they also charge for their services, so you'll have to weigh the costs of maintaining a storage facility against the services of a drop shipper. Or, you can simply choose a product that doesn't require a massive storage facility.

Does the product interfere with any kind of legislation issues?

While a number of states have legalized the use of Marijuana, operating an online weed dispensary is an open invitation for a visit from the Feds. Before opening your business, make sure the product you're offering is legal everywhere you'll ship it. Tariffs, taxes and duties must be taken into consideration as well. Bottom line, always do your due diligence to make sure you're in compliance with legislative issues.

Are these products a need or a luxury?

When times get tight, people ask themselves, "Is this something I need, or just something I want?" If your product falls into the latter category, when the economy slows, so will your sales.

Will these products be useful in the relative long term?

Planned obsolescence aside, the longer the shelf life of your product, the better off you are as a marketer. Think of all of those people who got stuck with Cubs World Series T-shirts once the euphoria over their win passed. Don't be one of them.

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Regardless of the ecommerce niche you choose, the look and feel of your site will have a considerable impact upon your success. If you truly have a good product, have done your due diligence in researching your market, and have meticulously analyzed how the above six questions relate to your niche, then a bright ecommerce future likely awaits.

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