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Import from China Mini-Course - Part 5 - Section 4

"What Are Niche Products Anyway?"

Overall, people use the word "niche" to mean...

  • Not a mainstream product (although it may be in a mainstream category).
  • A product that may be difficult to buy in normal (/offline) shops.
  • A product with a specialist application or special interest to a certain group of people, that make it a desirable purchase item for only that group.
  • A product with a reliable and predictable selling power because of its specialist appeal / necessity to a certain group.

It may seem surprising, but when people talk about finding "niche products" this could in fact be part of a "play it safe" / "follow the crowd" strategy.

For example, you may target a well-known successful product category, but choose to focus on one particular narrow band of products... e.g. "sex toys" are known hot sellers, but you choose to specialise only in "Mongolian hand-crafted leather whips". You may even source these from the same supplier as your competitors, but you put all your energy (& investment) into marketing this niche, and get successful by knowing a particular group of customers and their specialist tastes.

The other way to look at finding "niche products" is that you "get ahead of the pack" by identifying a particular specialised demand in the marketplace that is under-supplied, and then searching out a supply to match that demand.

Ways to source products other people aren"t supplying:

  • Supply foreign or very localised markets where the products are previously unknown or unobtainable;
  • Do deep internet research to uncover suppliers whose products may be good, but marketing spread is poor;
  • Visit trade shows to discover the newest products;
  • Work with manufacturers to adapt designs or even develop totally new products.

Another Top Rose Tip: "Customer Group Niches"

Maybe it's not the product that's a 'niche', but the market area which you are selling to.

You can think about a "customer group niche" that lets you profit more from non-niche products.

For example, lots of hobby / enthusiast markets will have a number of ultra-specialist products but there is also potential to sell more generic products to the same group at higher prices.

E.g. people whose hobby is fishing will buy specialist products like fishing rods and lines, but they will also be interested in related but not particularly specialist items like bags, outdoor clothes, drinks flasks, camping chairs etc.

If you can bring products to the right audience and save the customers the effort of searching in different places for what they need, they will be willing to pay the slightly higher prices that will improve your profits. It may be really convenient for them to shop for items together and not look around all sorts of different shops for their needs.

In the world of ecommerce, finding a "customer group niche" may just be a matter of keyword optimisation.

E.g. on EBay instead of listing your item as "fingerless gloves" you list them as "fishing gloves" and in separate auctions as "sailing gloves", "windsurfing gloves", and "gloves for quad-biking". Simply by capturing people who are already shopping in a particular hobby / enthusiast mindset, you will be more successful converting customers at good prices.


What Makes A Good Product?

Which is better - importing digital cameras, or importing digital camera bags?

Digital cameras are more profitable, of course. But cameras are expensive, possibly will lose value fast, and need insured shipping.

Camera bags are cheap to buy in quantity, can"t really go wrong, and easy to ship cheaply. On the other hand, you'll have to sell a lot of camera bags to match the profit on a single camera sale.

There"s no right answer, but if you think about a variety of product types in your area of interest, it will lead you towards the right considerations for picking products:

  • Is the product legal to import and sell in your country? (and think about possible trademark issues if you are importing fake or "replica" or "lookalike" items from Asia)
  • Is the product expensive to ship? – heavy... or valuable?
  • Is the product in a category that is likely to be hit by significant customs taxes when it reaches you, the importer?
  • Is the product going to require technical knowledge from you, just to be able to market it and support your customers?
  • How much actual profit do you make per sale? A 4% profit on a $500 item is better than a 200% profit on a $1 item.
  • Can the financial base of your business handle the impact of negative events, such as refunding customers, non-delivered orders, or holding stock that is depreciating? Those are BIG questions about your whole business venture, but the type of products you"re dealing in will make a difference, particularly if they are high value.
     

More Negative Thinking From Rose: Products To Avoid

  • Things that are widely and cheaply available in massive chain stores.
  • Things that have a short popularity lifespan.
  • Things that are so cheap your profit is too low to be worth the effort.
  • Things that depreciate or fluctuate in price (e.g. RAM and flash memory)
  • Things with a lot of options or variables that take too much time to process, pack, and deliver.
  • Things that break when you post them or which have a high likelihood of breaking during the warranty period.
  • Things where there is an enthusiast / hobby / fan culture associated with the products which you are totally unfamiliar with.

Read on for some of the top misconceptions people have about doing business with China

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