Go beyond what the superstores sell

Take a product that you have in mind to sell.  It could be kitchen equipment or herbal teas.  If you can’t get the same wholesale prices as the big stores, you can’t match their retail price either without losing money.  But they might only be selling the top brands; there are countless manufacturers for any product and many more models and brands for your business to sell.

Don’t only compete on the headline price

Niche products have one huge benefit: the competition is more limited and so it’s more manageable.  You’re up against other independent retailers rather than the superstores, so you can charge a realistic and competitive price for your products and still make a profit.

There are several ways to make your product and your company stand out.

Specialised knowledge

Become a specialist in whatever interests you and make your store stand out from the other retailers.  If it’s kitchen equipment, you might concentrate on a particular product.  When customers shop online, they prefer to buy from a specialist, and once they find a store that knows its products, they’ll return to shop there again.

If you find a great niche product where demand has outstripped supply, you have the opportunity to get in there and become a specialist about that product – even if it wasn’t your area to start with.

Add Value

Beyond the basic product, there are many ways to give your customer something extra.  With kitchen equipment, a leaflet of recipes; with herbal teas, a chance to try out a new variety.  If you can create a relationship, you build up your customer loyalty and give the visitors to your site a reason to shop with you again.

Apart from increasing enthusiasm for the product, you can provide your customer with a better experience shopping with you than shopping in the superstore.  A wide selection, excellent customer service and knowledgeable information will all make a customer feel they’ve chosen well.  Most online shoppers like to research extensively so provide them with background information: reviews and comparisons of the products you offer.  Even if it’s not all viewed, making the information available gives a customer a sense of confidence in the website, and that gives them the comfortable feeling that they’re making a wise choice – of the product and the retailer.

Establish Trust

With that confidence, comes trust in the retailer.  Research has shown that most buyers would prefer to spend a little more with a retailer they trust, rather than get the cheapest deal from a website that feels transient and basic.  The trust comes in the detail: a well-laid out website, accessible contact information such as freephone number, email and street address, customer comments.  All these will increase consumer trust.

It’s all about finding your niche, and supporting the customers who don’t have mass market tastes.  Your success lies in finding the markets that have the demand without such intensive high street competition.

For online retailers, searching out niche markets isn’t just a possible option; it’s the real opportunity.  As a small business, you may get frustrated looking at the retail prices of the high street and retail park superstores – how does an online business compete?  The answer is simple – you don’t.

Beat, Compete or Go Round?

It’s impossible to compete with a huge retailer on price.  The superstores buy in such huge quantities that they will always get a better discount than a smaller business.  Their wholesale prices will be lower and they can pass on a good range of special offers to their customers while still seeing a healthy profit.  So if it’s clear that in your market you can’t beat the big guys on price, or compete with them on offers, it’s possible to see a great opportunity in your third option.  Go round and find an alternative market.

Big stores make their money by creating a fast turnover of stock.  They won’t put out on the shelves any items that don’t sell quickly and their product range will be narrow as a result: they want the new titles, the popular make, the best selling product – and not every consumer wants that particular model.

There is a theory that ecommerce is a ‘long-tailed’ industry – a theory made popular by author Chris Anderson.  This  suggests that the best selling items that shift quickly make up the ‘head’ of the retail industry while the slower-moving niche products make up the ‘tail’.  That ‘tail’ might appear to trail behind, but sales from it can equal or outdo the best sellers at the head of the market.

Where can the specialist consumer go – the one that doesn’t want the best seller?  Increasingly, they’ll look online – for specialist shops with the niche market items they want to buy.

Drop shipping means that the retailer does not hold stock of goods, but takes orders and transfers them to the manufacturer or distributor, who then ships the goods directly to the customer.

A big benefit of selling niche products is that you can make use of drop shipping to increase your product range.  If it’s a high-demand, high-turnover product, the manufacturers and distributors are not going to sell them one at a time to your small business, but with a more specialised product, it’s worth their while to do so.

So with niche products, you can run a double track operation: in your warehouse space you stock your own particular best-sellers, and those you buy in bulk for better discounts.  The rarer, more specialised products aren’t taking up space there, sitting unsold on a shelf – they’re on your website and when the order comes in, you can use drop shipping to get them to the customer promptly.  Your buyer is happy with the range you offer and you maximise your profits while providing the service the customer needs.