How to find an ecommerce niche in 4 steps
Step 1: Identify your interests and passions
Choosing a niche that aligns with your passions or interests increases your chances of success. Now, it’s not just about what you’re interested in. You must also do research to find out if there’s a demand and assess the competition, but picking a niche that interests you will make it much easier to succeed.
When you’re emotionally connected to your business, you’re more likely to get through challenges, stay motivated, and connect with your potential customers. A genuine passion for your niche also leads to creativity and authenticity, which customers value.
Here are the steps to reflect and figure out how to combine your interests with your business.
-
Consider your hobbies and interests
-
Identify pain points you’ve experienced
-
Have you ever felt underserved by products or services in a specific area?
-
If so, could you create a business to fill that gap?
-
Reflect on your values
-
Are there causes or values you strongly believe in? What are they?
-
Consider niches that align with those beliefs (e.g., sustainability, inclusivity, etc.).
-
Ask for feedback
After you’ve answered these questions and shortlisted a few interests, you can move on to the next step: researching if your niche markets have a demand. There’s no business without demand. So this step is crucial to finding a niche that fuels your business and personal fulfillment.
Step 2: Research market demand
Now it’s time to identify market demand. We’ll walk you through actionable steps, tools, and methods so you can choose the right ecommerce niche. You must explore the search engines that you’ll be using, whether it’s Google or social media search engines.
Valuable read: 32 Useful Market Research Tools for Startups and Established Businesses
Use Google Trends 
Source: Google Trends
Google Trends is a free and user-friendly tool to gauge interest in specific search terms over time. It shows how popular a keyword or topic is across different regions, which is invaluable for identifying trends and determining earning potential.
How to use Google Trends:
-
Start broad, then narrow down. Begin by entering broad keywords related to your industry (e.g., “vegan clothing”). Once you get the results, try narrowing them down to more specific terms (e.g., “vegan workout clothes” or “plant-based fashion”).
-
Check the “Interest over time” graph. See if the topic is gaining or losing popularity, and look for a stable or growing trend over time to indicate long-term demand.
-
Review regional interest. Find where the demand is highest and target specific geographic markets where your niche is popular.
How to identify relevant keywords:
-
Think about the core problems or desires your niche product addresses. If you’re Starting a clothing brand with sustainable apparel, keywords like “eco-friendly clothing” or “organic cotton custom hoodies” may be relevant.
-
Use a combination of keywords (broad terms like “fitness gear”) and long-tail keywords (more specific phrases like “yoga gear for beginners”). Long-tail keywords typically indicate higher purchase intent, especially when they include modifiers like “best,” “buy,” or “affordable.”
Pro tip: Google Trends also allows you to compare multiple keywords side by side, so you can refine your list of options and choose the most relevant terms.
Valuable read: 20 Trending Products to Sell Online in 2024
Keyword research helps you understand the search volume and competition for keywords related to your niche. The goal is to find high-demand, low-competition keywords that signal an underserved market.
How to do keyword research:
-
Use tools like Ahrefs, Ubersuggest, or SEMrush to find relevant keywords for your niche. Enter a few keywords related to your niche (e.g., “vegan skincare,” “eco-friendly activewear”) and review the search data.
-
Look at the search volume. Aim for keywords with decent monthly search volume. A good range to target for niche products is between 1,000 to 10,000 searches per month.
-
Analyze keyword difficulty. Check the competition level. For a new store, prioritize keywords with lower competition to have a better chance of ranking in search engines. 
Source: Ahrefs
How to identify the best keywords:
-
Look for keywords that solve a problem or address specific needs within your niche (e.g., “back pain relief yoga mat” or “eco-friendly running shoes”).
-
Pay attention to buyer intent keywords—those that indicate the user is close to making a purchase (e.g., “best vegan skincare products” or “affordable organic cotton shirts”).
Once you have your keyword research, you can do search engine optimization to attract more people to your store and make more sales.
Valuable read: What Is SEO and How It Works—a Beginner’s Guide
Social media platforms like Instagram, TikTok, and Facebook are invaluable for identifying niche trends and gauging interest from your target customers. Monitoring engagement levels can help you assess how interested people are in specific topics or products.
How to research on social media:
-
Hashtag search. Look for relevant hashtags on Instagram or TikTok to see the type of content people are creating and engaging with. For instance, if you’re exploring a niche in eco-friendly products, search for hashtags like #sustainablefashion or #ecolifestyle.
-
Follow influencers. Identify influencers within your niche and track the kind of content that performs well. Pay attention to their engagement rates and the type of products their audience responds to.
-
Join niche-specific groups. On Facebook, search for groups where your target audience gathers. For example, if your niche is in fitness, join fitness-related groups and monitor conversations around products and trends. 
Source: Facebook Groups
Pro tip: Use social listening tools like BuzzSumo or Hootsuite to track the popularity of niche-related keywords across social media platforms.
The key to standing out is taking actionable steps, using data-driven tools, and thoroughly validating demand before diving into a niche. So use a combination of these methods and gain a deep understanding of your target market.
Step 3: Analyze the competition
Your competitors can be a direct indicator of market demand. Analyze how successful niche businesses are to assess demand and find gaps you can fill.
Here’s a step-by-step guide for conducting through competitor research.
1. Identify your competitors
First, you must find direct competitors, those offering the same or similar products and targeting the same audience.
How to identify competitors:
-
Search for your niche keywords on Google. The top-ranking websites are usually your direct competitors.
-
Check marketplaces like Amazon, Etsy, and eBay to see which sellers are prominent in your niche.
-
Browse social media platforms like Instagram and Facebook for brands that have built a following in your niche.
Pro tip: Look beyond just the big players—smaller niche competitors often offer insight into underserved market needs.
2. Assess their products and pricing
When you’ve identified your competitors, study their product offerings and pricing strategies. Understanding their product range, pricing models, and customer preferences can help you find opportunities to differentiate your business.
How to evaluate competitor products and pricing:
-
Product range. Look at the types of products competitors offer. Are they missing something that your niche audience wants? For instance, if you’re in the sustainable fashion niche, do they offer eco-friendly fabrics or customization options that appeal to conscious consumers?
-
Pricing models: Compare pricing across competitors. Are they competing on price, or are they positioning themselves as a premium brand? If you can offer better quality or additional value (like free shipping, customization, or sustainability), you can stand out even if your prices are higher.
Let’s say you’re in the pet product business. More specifically, selling pet costumes on Etsy. In that case, one of your direct competitors would be GlamarousPaws. You can check out their collections, see what they’re not offering yet, and fill in the gaps. 
Source: GlamorousPaws Etsy store
3. Analyze competitor marketing and SEO strategies
Studying how competitors market themselves, both organically and through paid advertising, can give you insights into what’s working and where you can do better. This includes evaluating their search engine optimization (SEO), content marketing, and social media efforts.
How to analyze marketing strategies:
-
SEO research. Use tools like Ahrefs or SEMrush to analyze your competitors’ top-performing keywords and backlinks. Which keywords are driving the most traffic? Are there any relevant, low-competition keywords they are missing that you could capitalize on? Look for long-tail keywords they might not be optimizing for, which could provide opportunities for you to rank higher in niche searches.
-
Content marketing. Review competitors’ blogs, videos, or other content types. What topics are they covering, and how engaged is their audience? If they focus on general content, you could differentiate by providing more in-depth, niche-specific information.
-
Social media presence. Analyze competitors’ social media profiles on platforms like Instagram, Facebook, and TikTok. Pay attention to how often they post, what type of content performs well, and their level of engagement (comments, likes, shares). Are they investing in influencer marketing? 
Source: SEMrush
4. Evaluate customer feedback and reviews
Customer reviews are a goldmine of information about competitors’ strengths and weaknesses. Reading through reviews on platforms like Amazon, Google, and social media helps you understand what customers appreciate—and where competitors are falling short.
How to use reviews for competitor analysis:
-
Identify common complaints. Look for patterns in negative reviews—are customers dissatisfied with the quality, delivery times, or customer service? Use these pain points to shape your own offerings and provide better customer experiences.
-
Highlight positive trends. Reviews also show what competitors are doing well. For example, if customers rave about a competitor’s product packaging or after-sales service, consider implementing similar strategies.
For example, in the screenshot below, you can see that while all the customers love the phone case’s design, one of the customers has commented that the product isn’t durable. So, if you’d be their competitor, you could find a provider that emphasizes product quality. 
Source: Etsy
Pro tip: Go beyond just reading reviews—engage with online communities or forums (like Reddit or niche-specific Facebook groups) where your target audience discusses products in your niche.
5. Find market gaps and opportunities
After analyzing your competitors, it’s crucial to identify gaps in the market. What are competitors failing to deliver? These gaps present opportunities to offer something unique.
How to identify market gaps:
-
Product gaps. Are there underserved needs or product variations not being offered? E.g., if most competitors sell eco-friendly products but don’t offer sustainable packaging, this is a gap you can fill.
-
Customer service gaps. If customer reviews highlight poor customer service experiences, this is an opportunity to differentiate your brand by providing exceptional support.
-
Brand positioning. Is everyone in the market competing on price? You could stand out by emphasizing quality, sustainability, or ethical production.
Once you have your competition research finalized, there’s only one step you must take to have found the best ecommerce niche for your business.
Step 4: Evaluate profitability
The last thing you must do is figure out the profitability potential for your niche and business. Here’s how.
Estimate your costs
-
Decide on the print-on-demand provider you’ll be using. Then, check out how much their products cost.
-
Research shipping and handling. Find out how much shipping costs, and add that to the overall expenses.
-
Explore competitor pricing. Browse ecommerce marketplaces or platforms you’ll be selling on and compare how similar products are priced. This will help you understand what customers are willing to pay and how you can position your pricing.
Calculate your profit margins
A profit margin is the money you keep after all expenses have been paid, described as a percentage. Your profit margin will depend on the products you’re selling. Here are the profit margins for the most popular POD products. 
Source: Printful
Valuable read: What is a Good Profit Margin for Print-on-Demand?
Analyze competitor sales
Visit platforms like Amazon Best Sellers or Etsy Trending Now products to see what’s popular in your niche. Products with high sales and good reviews indicate good demand and the potential for profitability.
By combining cost research and competitor analysis on marketplaces, you can effectively evaluate whether your niche has enough profitability to succeed without spending money upfront.
Valuable read: 11 High Profit Margin Dropshipping Products + Examples
