Practical Ecommerce

5 Niches for a New Ecommerce Business

Starting an online retail business begins with knowing what products to sell.

Entrepreneurs have many reasons for starting an ecommerce business. For some, they have a passion for a particular product, product category, or hobby. Knowing what to sell is an integral part of the plan from the start. But other entrepreneurs may be more passionate about online marketing or customer service than about a particular product category. For them, finding a niche is not so much about following a dream as finding a potentially profitable industry segment.

In this article, I’ll offer ideas for five potentially profitable niches for 2014: automotive, consumer electronics, jewelry, apparel, and toys, hobby, and game industry segments.

Automotive Parts and Accessories

With more than 250 million automobiles on American roads, the automotive parts and accessories retail segment offers a huge available market, so that capturing even a tiny share of online automotive-related sales can amount to a lot of business.

The segment is also full of tiny nooks, niches, and sub-categories in which an ecommerce business might find a significant amount of opportunity and thrive. As a few examples, an online retailer might specialize around a particular make or model, offering hard-to-find or unique accessories for Chevrolet Corvettes, Volkswagen Beetles, or even the far more rare Pinzgauer 712.

Similarly, there is also the opportunity specialize in a particular automotive part or accessory. Wheelskins, as an example, primarily sells leather steering wheel covers.

Wheelskins

Wheelskins is a niche automotive retailer, selling steering wheel covers.

Finally, consider that Bigcommerce, a software-as-a-service ecommerce platform provider, recently reported that automotive parts and accessories businesses using its platform had experienced 89 percent growth in revenue per online store, making the category attractive for new or growing online retailers.

Hard-to-find Consumer Electronics and Accessories

Consumer electronics represent one of the most popular categories for online purchases in general. According to a comScore report, consumer electronics sales grew about 13 percent during the holiday season.

While it is probably not a good idea to try and take on mass market, multichannel retailers — i.e., Amazon, Walmart, and Best Buy— by selling the very same tablets, MP3 players, and iPhone cases, new ecommerce businesses may find success focusing on hard-to-find electronics and accessories (that shoppers won’t be able to buy at the local big box stores) or on unique items that are not offered at other retailers.

As an example, could there be a market for steampunk iPhone 5 cases? Blujoos on Etsy, seems to have sold at least 50. Used items like old video games can also be a viable niche. See Lukie Games, which sells used Nintendo NES game cartridges.

Lukie Games

Lukie Games sells used Nintendo accessories.

The bottom line is that this large category has more than enough room for new online retailers selling everything from the aforementioned steampunk mobile phone cases to GPS-enabled dog collars or vacuum tube clocks made from salvaged Soviet-era parts. In short, consumer electronics and accessories go beyond a big box store’s inventory.

Jewelry and Accessories

According to some estimates, total U.S. retail jewelry sales will exceed $70 billion this year. Large jewelry retailers, especially those servicing the wedding industry, may take the lion’s share of those sales, but there should still be plenty of room for specialty online retailers.

Following the theme of hard-to-find or unique products and accessories, new online jewelry retailers probably won’t want to begin by offering products identical to or even similar to the rings, necklaces, earrings, and watches that much larger competitors regularly offer. Rather, it could be far better to focus on what are sometimes called long-tail products for which there is less established competition.

New stores might feature handmade jewelry from new and upcoming designers; vintage items found at auctions or from private collections; designs made from unique materials; or designs that don’t use diamonds or other gems mined with forced labor.

The jewelry segment may also be open to new business models for ecommerce merchants like subscription services or even rental services. In the former, a merchant might offer an earring of the month subscription. In the latter, the ecommerce business could rent out expensive jewelry for special occasions.

Apparel and Accessories

Apparel and accessories, including belts, hats, and even ties, is a broad category with a significant number of opportunities for new businesses.

Here again, perhaps the best way to address this market segment is with unique or relatively rare products that are not readily available at dozens of other competitors’ stores.

Online sellers may also find that for some apparel niches the competition is relatively weak. For example, there are many team apparel suppliers. Lots of these companies are local and have long backlogs since most every high school in America needs new uniforms, t-shirts, and warm ups even year or two. A well-managed online store that could offer quick turnaround could do well in the space, and this is just one of thousands of specialty apparel and accessory ideas for new ecommerce businesses.

Toys, Hobby Supplies, and Games

Sales of toys, hobby supplies, and similar items rose about 13 percent during the 2013 holiday season, according to comScore. The growth may indicate a good opportunity for new, specialty online retailers.

It is also worth mentioning that not all toys or hobby items are meant for children. Things from Another World, as an example, has a toy section full of items that are clearly not intended for kids, including a Daenerys figure form the Game of Thrones and a Walking Dead TV Series Pet Zombie with removable arms.

Things from Another World

Things from Another World sells adult oriented toy and hobby items.

Hobby items could include anything from model airplanes to Raspberry Pi single-board computers.

Armando Roggio

Armando Roggio

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  1. Rupal Sathavara February 6, 2014 Reply

    Great article Armando! I was wondering if I could start an ecommerce business myself and this article gave me quite an insight into what I could do with a fresh idea. Convert it into a business really! True that going online with a business helps, but the competition really sucks! Let’s hope I make it big.

  2. Ashish February 6, 2014 Reply

    Great article!

    Getting into the right niche, finding right products and suppliers is more critical than any other business decision. Choose an overcrowded market and you are doomed from start. Choose a narrow niche and you have little scope to expand.

    How do we make sure that we are on the right path and getting into right business?

  3. Flavio Graf February 10, 2014 Reply

    So, autoparts a niche? Really? With multi-billion retailers that have an enormous amount of stock in all zip codes in America and have an ever-increasing presence on the Internet?
    The same market that is pushing US Autoparts (the largest pure-online autoparts retailer in America) to the edge of bankruptcy?
    In eCommerce you have to have technical understanding but also deep industry knowledge.

    My advice: Before doing anything online, spend time with an industry specialist. Ideally, work for one.

    Flavio does eCommerce

    • Alex March 25, 2014 Reply

      it is because it represents such a big market that there is space for small niches like the one in the example the author reported. Do not underestimate the potential of sub-niches, being in an already successful market it helps a lot when kick starting the sale of a new product. Talking about the crisis of the sector you are talking about the physical market in the US but do not consider the digital market that is stronger than ever thanks to the crisis itself that leads customer researching better pricing opportunities.

  4. Dropshipping Poland February 10, 2014 Reply