Seven criteria for an ideal business niche
1. “High Resolution”
Here we are talking about your “resolution” in this niche, that is, about your level of understanding, your experience, knowledge. For example, if you enjoy your entire adult life on paragliding, parachuting and other air-extreme things, then it is clear that your permission in this area is great, simply speaking, you are “in the subject”. Accordingly, it will be much easier for you to open an online store of paragliders, rather than an online store of dry mixes for baking.
2. “the suffering crowd”
People need your goods. They want to buy it. In Yandex statistics (http://wordstat.yandex.ru/) there are a lot of queries on this topic, they are looking for and asking for goods. It’s very difficult to sell what people don’t know yet. It is possible, but difficult, and it is better not to make such a product the basis of your first business. It is worth trying to create a market for something new, only already having a fair amount of business experience and considerable investments.
3. Large average check
You can sell 200 bags of seeds for 20 rubles each and earn your own pennies from it, or you can sell one snowmobile and make a lot of money right away. Most importantly, the amount of effort you spend will be about the same (or even more in the case of seeds), but the financial output is fundamentally different. If there is a possibility to choose from several areas, it is better to choose the one in which the margin from one purchase will be higher.
4. There are regular customers
The amount of money and effort spent on finding a new customer is many times greater than the money and effort that is needed to re-sell it. That is why the niche where purchases are made regularly (cosmetics, clothes, books) is at times more pleasant than the niches of disposable or rare purchases (for example, wedding dresses or custom-made kitchens). Also, niches with a so-called “subscription fee” (for example, IT-outsourcing) are very successful.
5. Short transaction cycle
For the first business it is worth choosing niches with a short cycle of the transaction in which you will receive a profit in a time less than or equal to 21 days. Otherwise, you risk “blown away” and sit on the financial bank long before receiving the first money.
6. Extensive geography
“It’s easy for you, Muscovites, – but how do I make money in a small town?”, – often ask residents of provincial cities. To which there can be only one answer: who is stopping you from selling all over Russia or Ukraine? Choose a suitable product that is convenient and profitable to deliver to other cities that do not rot, does not take up much space (like toilet paper, for example) and is highly valued – and go for it. The Internet knows no boundaries.
7. No season reference
Santa Claus and Snow Maiden costumes, designer felt boots, flowered rubber boots — these are all wonderful businesses, but you need to be well aware that you will earn them only in winter. In the summer you will have to either look for something else, or put your teeth on the shelf. Accordingly, the best niche is one with no seasonal recessions.