If you want your eCommerce business to be a success, it makes sense to choose a profitable niche. Doing that can make all the difference.
This guide will look at the top five eCommerce niches in eCommerce. You’ll learn which are hot and get some valuable insights about how to launch your business. With that in mind, let’s dive into this guide.
Most Profitable eCommerce Niches
In 2021, the digital landscape changed due to the Covid-19 crisis. There is, however, a silver lining for online businesses. Many people now prefer online shopping rather than going to a physical store. The ‘new normal’ offers small businesses to do better than ever before.
Here are the most profitable B2C eCommerce niches you can consider:
1. Technology and Home Office Equipment
According to a study done by Upwork, 41% of people in the US now work from home full-time. Almost 6 out of 10 teams are now working remotely part-time. These figures are reflective of the shift in work culture, which is unlikely to change significantly.
With more people now working from home, it’s the perfect time to get into the technology and the home office equipment market niche. Some of the top technology items are laptops, keyboards, and monitors.
In particular, some technological digital goods have seen higher adoption as a result of the pandemic. These include productivity tools, time-management tools, and even video conferencing tools. According to Pewresearch, a whopping 81% of employed adults who are working from home use video conferencing tools such as Zoom and WebEx most of the time. Some 57%, on the other hand, use instant messaging platforms such as GoogleChat or Slack.
If you want to focus on non-technological items, you should look at office equipment. For example, you might create an eCommerce site about ergonomic desks, standing desks, and office chairs.
The great news is that while this is a profitable niche, parts of the sector have low competition. Ranking for a keyword like “ergonomic desks” requires only a minimal number of backlinks. According to Ahrefs, a good piece of content around ergonomic desks would rank on the first page of Google with a handful of links.
2. Home Gym and Fitness Gear
Going to the gym isn’t as straightforward as just packing your gym bag before heading to work anymore. It’s no wonder that many of us are now buying gym and fitness gear to use at home. Even after gyms reopen, many people may still be wary of infection and realize that they don’t need their expensive gym membership to stay in shape.
Fitness is also an evergreen eCommerce niche that never goes out of fashion. A study by Statista reports the increase in sales of home gym equipment in the United Kingdom in 2020, by category:
People invest in all types of gym equipment for their homes. Investments can range from large items such as step machines, treadmills, and weight benches, to smaller items such as resistance bands or dumbbells, or nutritional supplements, and even digital fitness technology items.
Fitness app subscriptions are also growing in popularity. In fact, some companies used the pandemic to push for their paid fit offerings. Fitbit, for instance, extended its free trial to three months in 2020.
As a result of the pandemic, some companies also saw a boost in sales of fitness equipment. In 2020, Peloton reported a 172% surge in sales, with over one million people subscribing to its live streaming classes.
Unfortunately, competition for search rankings in the health and fitness space is significantly higher. If one of your primary marketing channels is SEO, prepare to invest a lot of time and effort in guest posting to rank.
3. DIY and Home Improvement
Market Watch reported a Bank of America poll of 1,054 Americans during the pandemic found that more than 70% have decided to tackle home improvement projects, with more planned for 2021.
Furthermore, the poll showed a trend of younger buyers buying and renovating older houses that are more affordable and within their budget range. The push for home improvements isn’t limited to the house. People are also spending a lot of money on their gardens.
Like the home and fitness niche, you will face a lot of competition for search rankings in the DIY and home improvement sectors. Niching down and focusing on a particular element of home improvement could help you reduce competition and establish a presence as a niche expert.
4. Home Entertainment
Investing money in our homes is a theme when you look at the most profitable eCommerce niches. Unsurprisingly, home entertainment is a big niche. Because we have increased free time at home, we are looking for more ways to keep ourselves entertained.
Deloitte found a dramatic rise in subscription video-on-demand (SVOD), console, PC, and mobile gaming in its digital trends report. The report said that once people can meet up again, media consumption behaviors will change again but not to pre-lockdown levels.
In 2020, the number of movie streaming service subscriptions also passed the one billion mark for the first time, as avid moviegoers were constrained to do their movie-watching at home instead.
Ebook subscriptions also saw an increase, with EBSCO eBooks reporting their subscription usage rising 26% in March 2021. Music sales weren’t left behind. The Global Music Report said the surge was driven primarily by an 18.5% surge in revenues from paid subscription streaming services.
Non-digital entertainment markets have also grown, with some people relying more heavily on old-fashioned forms of entertainment. That includes board games, jigsaw puzzles, arts and crafts, and outdoor playsets and swings.
Rather than focusing on home entertainment as a whole, it’s a good idea to niche down. If you want to focus on subscription video on-demand, for instance, it may make more sense to establish an affiliate store where you review items.
It would be relatively straightforward for the company to launch an eCommerce site by establishing a line of own-brand products. That consequent approach is a great way to launch an eCommerce business.
If you’re going to take this approach, ensure you create content style guides to ensure that all your marketing and advertising content is consistent and reflects your brand voice. A recognizable brand voice is important when other companies can easily imitate your business model.
5. Food, Drink, and Cooking
We’re at home more often, which means that the demand for food, drink and cooking products is higher than before. That’s also partially due to restaurants being closed for long periods. Since many children are also now studying from home, we need more homemade meals.
If you want a slice of the profits from the food and drink eCommerce niche, it’s important to look at how our eating habits changed last year. The graph shows the changes in consumer eating habits in the US during the COVID-19 outbreak in 2020.
Areas that have seen particular growth include online meal subscriptions, kitchen equipment, online grocery services, and alcohol. There’s plenty of opportunities for an innovative company to grow in this sector.
For example, there are several companies like The Ugly Company that take imperfect farm produce that supermarkets would reject and upcycle the produce. These industries take advantage of arbitrage to create healthy food and generate healthy profit margins.
JioMart in India is also a great example. The retail brand is driving growth in the food delivery market, which is expected to grow eight times in just five years.
Benefits of Finding a Niche for Your eCommerce Business
Now that you have a clearer idea of what areas are the most profitable, it’s essential to look at the benefits of choosing a specific niche. Let’s quickly look at why you should niche down when launching your eCommerce business.
1. It’s easier to generate brand recognition
Starting your business by focusing on a specific niche makes good business sense. When Amazon launched, they sold books. That was all they did. Over time the company branched out and entered other niches.
Focusing on a smaller segment of the market will ensure you can target your product at particular consumers. That will lead to a higher level of consumer loyalty. The more niche and specific your business, the more customers.
2. There will be less competition
One of the major benefits of focusing on a niche is that you reduce your competition. It’s something that I touched on when discussing some of those profitable eCommerce niches earlier. For example, I mentioned the low level of the competition earlier for the term “ergonomic desks.”
Choosing the right eCommerce niches allows you to target a small percentage of the billions of eCommerce customers, cutting down on the number of businesses you have to compete with. It also makes your business more recognizable, which is important as you try to generate an engaged and loyal audience.
The final benefit of niching down is you can establish niche expertise. Amazon succeeded with this approach when it became the market leader for selling books online, for example.
3. You can run your company with a small team.
Running a niche eCommerce brand allows you to run it independently or do so with few staff members, regardless of your eCommerce business model. You’re selling to a select few. That means you have fewer products to package, market, among other things. You don’t need a huge team to get things done.
That also means you don’t need to spend as much paying salaries to people. Since you have fewer products to sell, it makes managing your inventory easier too. That will save you on operational and storage costs.
4. You can create hyper-personalized messages that drive conversions.
Because you’re focusing on a niche, your target audience is extremely targeted, too. That makes it easier for you to understand their pain points.
When you have a better understanding of what your target audience wants, you can create hyper-personalized messages that can drive them to action. To achieve personalization, use tools to track your users’ behavior with your product, understand their preferred interaction channels and adapt the message to a tone of voice they find relatable. For example, eCommerce tools such as those for abandoned carts or unfinished payments are a great way to nudge a shopper in the right direction, with a personal message.
Nowadays, it’s more important than ever for your eCommerce business to stand out. You can do just that by choosing the right niche. This guide discussed five of the most profitable eCommerce niches you could enter.
Some of the most profitable eCommerce niches include technology and home office equipment, home gym and fitness gear, DIY and home improvement, entertainment, food, drink, and cooking. There are many opportunities to establish a successful business in any of these sectors.
Operating in a niche can give you numerous benefits. You’d have lower marketing and advertising costs, a higher level of consumer loyalty, and less competition. You’d be able to run your business with a small team and have the option to increase your prices.
Do your research and choose the eCommerce niches that will work for you. Then, create great products if you don’t have those already. You’ll see those sales coming in. Your business will be on its way to success.
About the Author
Nicholas Rubright is the communications specialist for Writer, an AI writing assistant designed for teams. Nicholas has previously worked to develop content marketing strategies for brands like Webex, Havenly, and Fictiv.