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To resolve the dilemma in question, first we need to consider a few basic issues related to online store assortment.
It’s advisable to research the demand for specific products or product categories.
Think about it - are there people willing to buy items you want to sell?
Analyze available e-commerce studies and statistics, use industry forums to ask experienced entrepreneurs what types of products are purchased the most frequently, and what elements you should focus on to support cross-selling.
Check out the offers on popular auction sites and use available tools such as Google Trends or Google Keyword Planner to scrutinize current product trends, and related growth opportunities.
Don’t forget to analyze your market rivals: how many suppliers offer your preferred product category? What are the prices? Will you need to invest in PR and marketing activities in order to be able to compete with other companies?
Finding reliable data shouldn’t be a problem. There are numerous industry portals that specialize in similar research.
Keep in mind that market analysis isn’t solely about checking if someone offers a particular product. You also need to determine what elements help your rivals succeed and make them stand out from the crowd.
Selected product range is also extremely important. Do you know your products?
Will your offer encourage potential customers to send you inquiries?
If people ask detailed questions about products in your range, but you have only limited information, you’ll be able to help them only partially. While size charts should be enough in a shoe store, customers of an online store with food for exotic animals may expect expert knowledge, as information about ingredients may not satisfy them.
Buyers are able to easily determine whether the staff has professional knowledge.
You can showcase your experience in the field by creating appealing blog posts or sending out catchy newsletters.
Is it better to offer a wide, varied range, or a small but carefully selected group of products?
1. What are the advantages of finding a product niche?
Finding a niche is not easy these days, but it's worth trying to do it. It’s particularly helpful in the case of stores that are just building their reputation and need to increase brand recognition among customers. A niche doesn’t necessarily mean something new. It may also be something that is completely different from other products available on the market.
It’s a good idea to cooperate with craftsmen or manufacturers. Natural cosmetics or interesting furniture with a unique design are gaining popularity. Working with numerous producers that offer unique, niche, distinctive products can help the store owner gain a competitive edge over the market rivals.
Clothes, bedding, pillowcases, bags and other products sewn by local companies are another example of unique goods frequently manufactured in smaller quantities. Such items are a perfect recipe for attracting the attention of potential buyers.
2. Is it a good idea to offer a wide, diversified range?
If you want to follow this direction, you should note that at the very beginning of your activity low prices will be one of the decisive factors for many potential customers.
Prices are negotiated with suppliers and the projected amount of ordered goods can be used as an argument in such negotiations.
This usually isn’t problematic for online stores that have been operating on the market for longer. But, e-commerce owners who are just taking their first steps in the business and don’t have impressive budgets, may find it hard to get attractive prices.
The choice between a niche and a large, rich assortment depends mainly on the individual condition of the online store. In the initial phase of business activity, when the store owner doesn't have impressive funds at their disposal, it's worth looking for a certain niche, interesting products e.g. manufactured by local craftsmen. The range doesn’t have to be big. Diversify your offer by acquiring goods from several suppliers and benefit from cross-selling that will allow you to sell extra products that additionally complement your offer.
Stores that already have significant revenue, big start-up capital, or an established market position have greater chances for creating a diversified, and rich product offer. However, in order to compose such an offer, first they need to have experience (excellent market knowledge), and adequate funds.