Opening an online store is a tempting prospect for many aspiring entrepreneurs. Compared to traditional retail, the online format requires less investment at the start and has good prospects for scaling up the business.
However, the statistics are inexorable – more than 60% of online stores close down within the first 6-12 months after launch. One of the main reasons for this sad outcome is the wrong choice of niche for an online store. After all, it is this decision that determines whether you will be able to attract a sufficient number of customers, withstand the struggle with competitors and eventually stay in the plus side.
Choosing the right subject matter when creating a business is both a responsible and difficult step. On the one hand, you must find a product that is popular with consumers. On the other hand, you yourself should be interested in this area, because the success of any business is directly related to the personal interest of the founder. So how to choose the right niche for an online store?
What are the different types of niches for online stores?
A market niche is a rather narrow area of business, oriented to a specific group of consumers. The choice of a niche for an online store depends on how profitable the investment will be and whether it will be possible to recoup the costs of creating and promoting the business.
Ideally, the topic should have sufficient demand from potential customers, and competition – not too much, so that the traffic from advertising is inexpensive. Next, let’s understand what niches there are and what it depends on.
Trending
This is a kind of “gold mine” for online stores looking to capitalize on the wave of popularity of certain products. Here we are talking about things that are currently at the peak of fashion.
A vivid example is anti-stress toys. These small and inexpensive products with various mechanisms have literally taken over the world and have become a must-have attribute for children and adults.
However, it should be understood that the popularity here is often temporary. Remember how in 2017 the whole world went crazy for spinners, and then they were replaced by slimes, pop-its, simple-dimples and squishes:
Retailers who decide to navigate the trend will have to be as nimble as possible. After all, if you fail to react in time to their change and adjust the assortment, you can lose all your customers overnight. And we must not forget about competitors who want to snatch their piece of the pie.
How can you work successfully here? One of the best ways is to try to anticipate the popularity of a particular product before it becomes mainstream. To do this, you should analyze the Western or Chinese market on a regular basis and identify products with dynamically growing demand.
Seasonal
This is a product category, the interest in which varies significantly depending on the time of year. For example, in the fall and winter people are actively looking for warm clothes. And with the arrival of summer, swimwear, sunglasses, air mattresses and sun umbrellas come to the fore.
If an entrepreneur has chosen such a niche, he must treat the season with maximum responsibility. After all, if at its height a lot of goods are sold, then the rest of the time there may not be a single order for them. When planning a seasonal business, it is important to make sure that the profit received in the peak months will be able to compensate for long periods of calm.
However, for first-time entrepreneurs who are just learning e-commerce, it is better to favor areas without a pronounced seasonality. There is a steady inflow of customers throughout the year, which allows you to build a more predictable business. This can include, for example, household chemicals, cosmetics and much more.
However, there is also an alternative for those who want to develop in seasonal areas, but do not depend on the vagaries of the weather. You can choose several areas of interest to people at different times of the year, and competently alternate them.
A good example of this is an online fishing store. Offering tackle and bait for both summer and winter fishing, its owner will be able to receive orders throughout the year, simply by focusing the customer’s attention on the currently relevant categories.
Visible and invisible
Many newcomers first of all pay attention to the so-called “visible” niches. These are goods that constantly surround us in everyday life and are regularly used by most people. Clothing, utensils, furniture, accessories – all these categories seem obvious for starting a business.
However, such goods have one significant disadvantage – high competition. Since they are in widespread demand, they are already being sold by many sellers vying for the attention of a potential customer.
A much more interesting option is to pay attention to the so-called “invisible” niches. These are things that are invisibly present in our lives, but are not an everyday item for most people.
These include, for example, components for coffee machines, MRI film, spare parts for forklifts, and commercial equipment. Their main characteristic is their narrow and specific target audience. All these things have value for a limited circle of people, often associated with a certain professional activity. Therefore, they do not appeal to the masses.
However, there is much less competition here, which makes it possible to make a quicker statement and win the loyalty of the audience. Also, people interested in “invisibles” often agree to pay more, as their company’s profit and personal professional success may depend on such products and their quality.
Wide and narrow
An example of a wide niche is a plumbing store. It can sell everything from plastic pipes for irrigation, to sinks and toilets. Thus, it is possible to reach the widest possible audience and receive a large volume of traffic to the site from various sources.
However, such areas attract many players, so the competition here is usually off the charts. In order to stand out from other stores, significant investments in promotion and advertising will be required. In addition, as more and more product categories are added, it becomes increasingly difficult to maintain a decent level of expertise in each individual area.
Narrow topics, on the contrary, focus on specific product categories. For example, a resource that deals exclusively with e-books can be called highly specialized. The target audience in this case will be much smaller, but it is possible to defend yourself from competitors due to expertise in the chosen subject (for example, installing new firmware on the purchased book or independently importing exclusive covers from China).
Development in the second option will require you to have deep expertise and knowledge of the market. You will have to work hard to find your customers and build trust with them. But you will be rewarded with loyal customers for a long time to come. Moreover, it is much easier to take a leading position here and compete successfully even with the big players.
Geo-dependent
Geo-dependent spheres include those in which the radius of delivery or installation is closely related to a certain region. For example, this can include an online store specializing in the sale and installation of stationary braziers in the Kiev region.
Despite the demand for such services, the service will be limited to the framework of one region – after all, the installers will not physically be able to travel to orders throughout the country. At the same time, an online store of power tools can work throughout Ukraine.
If you decide to work in a geo-dependent niche, carefully analyze it and assess the real potential:
Study the demand in the target region. Do people have a real need for what you are offering? Are they willing to pay money for it?
Assess the competitive environment. Perhaps there are already many other companies in the niche you have chosen, and there are only a handful of clients. In such conditions, it will be difficult for a newcomer to win its share and make a profit.
The prospect of scaling up. Even if at the start you plan to limit yourself to one city or region, always think about the future. Does it make sense to go national in the future? Can your business model be adapted to work in other countries?
Geo-dependent niches offer much more freedom in this respect. You will be able to build up your customer base and increase your profits at the expense of people from different parts of the country or even from abroad.
What to consider when choosing a niche for a future online store?
If you choose a niche to open an online store purely for reasons of personal interest in the subject, it can sadly end up in the end. Therefore, be sure to pay attention to such points:
The cost of the products. The optimal range is between $20 and $100. This segment is quite easy to sell, as buyers do not think long before making a decision. The seller in turn makes a decent profit. Items that are too cheap will have to be sold in huge quantities just to cover the costs of operations and advertising. And more expensive items are usually difficult to sell, because you will have to deal with buyer objections. Here the seller’s expertise and individual approach to each client are already important.
Margin. This is the difference between the purchase price and the gross income from the sale. You can bet on a large volume of sales with a small margin (stationery would be a good example), or, on the contrary, sell expensive things with a high margin, but much less often (jewelry, electronics, etc.).
Dimensions and weight of products. Compact, lightweight items are easier to store and deliver to customers. Ideally, the item should fit in a small box (1-2 kg volumetric weight by Novaya Pochta standards). The sale of bulky and heavy items will require a separate warehouse. It is also necessary to have a courier car for transportation to the postal operator’s office.
Fragility. Give preference to something that is difficult to damage during transportation. Selling conventional dishes or a chandelier will create a large number of problems with delivery and returns. Optimal are such goods that can be easily delivered by regular mail or courier service.
Duration of the transaction. Ideally, the full cycle from ordering to receiving payment should take less than 2 weeks. For niches with a long-term turnover of funds (complex equipment, custom furniture) will require a solid start-up capital to cover expenses while waiting for payment.
Likelihood of repeat sales. If repeat purchases are not uncommon in your field, you can save a significant portion of your budget for attracting new customers. Otherwise, you will have to constantly invest in promotion.
Difficulty in comparing prices. Buyers can easily compare the cost of popular goods in different stores. That is why it is most likely not possible to sell electronics, household appliances and power tools of popular brands at a high price. But it is easier to sell unique, rare things or handmade items in general with a large markup, because it is almost impossible to compare them fully with the offer of competitors.
Potential for growth. Think about how you can develop your business in the future. At the expense of what you can expand your range of products, expand your target audience, and increase your sales. Perhaps the topic is too narrow and will only lose potential over time.
Level of competition. There are competitors everywhere, the main thing is to be able to compete effectively with them and win. For example, in household appliances, Allo, Foxtrot and Comfy dominate. It will be very difficult to compete with them, because they allocate cosmic budgets for advertising. That’s why it’s easier to start in a narrower niche, where small online stores without a promoted brand will compete with you.
How do you evaluate your chosen niche?
Once you have selected a few promising options, you need to run them through a number of criteria, which we will talk about later. If a topic meets one or another criterion, give it 1 point. The niche with the maximum points will be the best choice.
Evaluate your personal attitude
Business is a marathon, not a sprint. The chosen field will be your constant work month after month. If it does not evoke positive emotions, fatigue and frustration are inevitable, no matter how potentially lucrative the niche may be.
Imagine you have opened an online store of equipment for installing solar panels. But you have no knowledge of technology at all, and in general you were a humanitarian at school. Clients need advice, money has been spent on attracting them, and you cannot, and most importantly – do not want to help them.
In addition to the banal routine, you will have to invest a huge amount of effort and energy in promotion. Will your fervor and motivation be enough, if the case is not to your liking? It is more likely that you will lose heart and desire to develop in the chosen direction.
It is good if the niche resonates with your hobbies and interests. When business is fun, it’s easier to endure temporary difficulties and focus on success. You’ll be able to become an expert on the topic and provide valuable tips and tricks to customers on how to use the product.
Check popularity
Even if it seems to you that the chosen product will be very popular, you can’t rely on your own intuition. To check if this is actually the case, use special tools.
Google Ads
This is one of the fastest and most reliable methods of estimating demand. You will need the built-in “Keyword Planner” tool. Enter the main key phrases related to the subject in the search bar of the planner in the format “buy [item name]” and the system will give statistics on the number of queries for the last month.
If the data is missing, or the keyword is searched for only a couple dozen people a month across the country, this is not the best signal to open a business. At least, it will be difficult to sell this product through contextual advertising. But if the frequency exceeds 10000 queries per month – this indicates a too high demand, which means that the competition will be very high.
Google Trends
A free Google Trends tool can help you analyze the dynamics of popularity in more depth. Enter pre-selected keywords into the service’s search bar, and it will show you whether users’ interest in the topic is increasing or decreasing. You can also compare key phrases from different topics with each other to understand where demand is stable and where it is falling.
Google Trends can also help you assess seasonality. If on the graph from year to year the interest to the topic drops in the same month, and then grows again – it means that the niche is seasonal and it will need to be taken into account when working with it.
Contextual advertising
To assess the demand for this or that product will help and the search engines themselves. Just enter a relevant niche query in Google, for example, “buy oil pastels in Kiev”. See how many contextual advertisements appear above and below the search results. The more advertisers there are, the more competition there is.
If in the process of research you find that there are few advertisers, this may indicate both a lack of effective demand and a niche not yet occupied by other players. To draw more accurate conclusions, it is easiest to interview representatives of the future CA.
If there is a high level of demand, think about your competitive advantages. What will make you stand out. Perhaps because of the low cost, or the range of products? Or maybe you can offer better service and faster delivery? Make a list of future TOS. If you can’t come up with them yourself, look for them in your competitors’ ads.
Analyze your competitors
This will allow you to understand a lot about those with whom you have to fight for customers. What are their strengths and weaknesses, and how can you beat them? So, where to start analyzing:
Identify key competitors. Enter the main queries for the desired topic into the Google search bar and see which sites are in the top 10 of the results. Pay attention to contextual advertising as well – activity in this channel can tell you a lot about budgets and sources of traffic.
Carefully study the websites of competing companies. Analyze prices, assortment, evaluate the usability of the web resource, the quality of photos and descriptions, delivery options and conditions, the possibility of self-delivery, and the work of the support service. These parameters directly affect the trust of visitors and the number of conversions.
Familiarize yourself with real reviews. You can find them on the site itself, on external resources like Hotline.ua, in social networks or on forums. Reviews will help to identify the main complaints of consumers and understand why you can stand out from others.
Gather all the data obtained in a single table. This will allow you to see clearly who offers the best conditions, and therefore which advertiser is the most serious competitor. At the same time, you will be able to find clear points of growth that you can take advantage of.
Based on the analysis, draw up your own action plan. Think about what you can do to attract and retain customers – a wide or unique assortment, a favorable price, regular promotions, faster delivery, convenient payment methods, a loyalty program, expert advice, or something else.
Assess potential risks
Even the most elaborate business plan is not immune to the influence of external factors and force majeure. Therefore, at the pre-opening stage, make a list of threats and prepare options for responding to them.
Here are just some of the typical problems you may encounter:
Sales volume is lower than planned. If it doesn’t cover the costs, you may have to look for other sources of traffic and test different channels. A separate budget should be set aside for this.
Some products may spoil. This is possible with pet products or foodstuffs, as well as with building materials – mortars, mixes, etc. In such topics, it is important not to purchase large quantities until stable sales channels have been established.
The emergence of a new player in the market. If a competitor suddenly appears and sells the same goods at a lower price, the business may suddenly lose profitability. In such a situation, you can fend off the competitor with a unique product with additional characteristics. When purchasing large batches, the manufacturer can uniquely customize the product for your specific task.
Remember that it is impossible to avoid absolutely all risks. But the better prepared you are, the less likely it is that unplanned events will throw you off track and hinder your development.
Analyze your target audience
For future entrepreneurial success, it is important to have an idea of who your potential customer is, what their needs, interests and expectations are. So, how to make a customer portrait?
Consider the following characteristics when analyzing:
Demographics. Identify gender, age, marital status, income level, education, occupation, region of residence.
Needs and goals. Ask yourself a question – what problem does the product solve, what need does it fulfill? Perhaps it is a desire to save time, to get emotions, to emphasize status, to simplify everyday life, to improve health, etc. Understanding the true motives for buying will help to formulate the right sales proposal.
Selection Process. Analyze how a customer makes a decision to order. Which factors play the most important role for him – brand, technical specifications, design, delivery time or price? Which parameters he pays attention to first, and which are secondary? Based on this data, you will be able to set the right accents in the description of products, in the design of the Landing Page, as well as in the text of ads.
Values and interests. What is the audience’s hobby, how does it spend its free time, what books does it read, on what resources does it look for information on the topic? This information will suggest effective channels of promotion and formats of communication with the audience.
Fears and objections. What fears and doubts can stop a person from ordering – distrust of quality, fear of overpaying, difficulty in returning? Make a list of typical objections and prepare convincing answers. This information can be submitted on the website in the “Question and Answer” block.
Important! An online store often has several target audiences. If you sell products for artists, customers may be divided into parents whose children want to learn to draw and professionals in the field. Everyone has different behavior and decision-making patterns that will have to be taken into account.
Test the demand
It’s one thing to see good numbers in theory, based on search query statistics and competitor analysis. It is quite another to have a “live” response from people who are ready to take money out of their wallets. Fortunately for aspiring entrepreneurs, there are effective and not too costly ways to test the real demand for products.
Run an advertisement in Google search
The traffic at the first stage can be directed to a simple one-page site (lending). You can make it on any constructor, for example, on Wix. To understand the demand, the starting advertising budget should be enough to get at least 30-50 clicks.
Next, track the key indicators – the number of people who went to the site, the percentage of applications or completed purchases, what is the cost of attracting one visitor. The data obtained will help you calculate the potential payback and profitability of the future online store.
Survey potential audience in social networks
Find communities and groups in social networks where the potential target audience communicates. Create a survey or start a discussion, ask people about their experience of using the chosen products, their expectations and wishes, their willingness to buy goods of this or that brand.
Do not position yourself as a salesperson, otherwise the answers will be biased. Better introduce yourself as an ordinary user or a journalist who wants to write a review article. That way you’ll get honest insights about real problems and triggers for future buyers.
Create an ad on OLX
Place ads for sale on popular boards like OLX. These sites allow you to test demand for free or for a nominal fee without creating a full-fledged website.
Add high-quality photos and a detailed description to the ad, and specify a competitive price. Analyze the number of people viewing the ads, how many of them call or write to the chat. If for some reason you are not ready to actually sell the product to those who responded, it is enough to say that it is already sold out or has run out.
Look for suppliers
Reliable suppliers are the foundation of stable operation of any online store. The choice and quality of products, the speed of delivery and, ultimately, the loyalty of the audience and the reputation of the brand depend on them. Therefore, the choice here should be approached particularly carefully. Evaluate the following points.
Product quality
If the product is of poor quality or breaks down frequently, it will inevitably lead to returns, negative feedback and customer churn. Ideally, you should cooperate directly with the manufacturer or an official distributor.
Such suppliers value their reputation, provide quality certificates and undertake warranty service obligations. They also often offer the most favorable prices (without intermediary mark-ups).
If direct contracts with manufacturers are impossible for some reason, do not hesitate to ask suppliers to confirm the quality of their products. Ask for the necessary certificates, clarify the warranty period, the procedure for exchanging and returning defective products. If necessary, order samples of products to personally verify their reliability.
Product prices
At first glance, it may seem that the lower the purchase prices, the better. But don’t be in a hurry to chase the cheapest offers. Underpricing can be a sign of the same low quality, “gray” imports or simply the seller’s bad faith.
When calculating the profitability of a purchase, don’t forget to take into account additional costs – for delivery, storage, and pre-sale preparation. Logistics is a big topic to discuss with a potential partner.
Location of the warehouse
It is ideal if the supplier is located in your city or region. This will allow you to save on transportation costs and replenish your stock promptly. But even if the seller is geographically remote, find out what his delivery terms are – what the rates and shipping times are, who is responsible for the safety of goods en route.
When starting a business, consider the possibility of working on dropshipping. The essence of this scheme is that you add products to the site, take orders and payment, but the goods themselves are sent from the warehouse by the supplier. Your income is the difference between the retail and wholesale price. The plus side of dropshipping is that there is no need to spend money on purchasing and storing large quantities and organizing logistics. Among the disadvantages are lower margins and lack of control over the delivery process.
How do you know that a niche is not suitable for opening an online store?
High level of competition. In such a case, it will be difficult for a newcomer to gain market share from the business “sharks” who have divided it. The only way out is to find a unique advantage that helps to set yourself apart from your competitors. If there is no such advantage, it makes sense to look for another sphere.
The subject matter is too narrow. Focusing on a small target audience complicates the search for customers and limits the potential for development. In some cases, a small expansion of the assortment through related and accompanying products may help.
The selected product is not relevant. If when choosing a niche for the future online store after tests you noticed that the demand for products leaves much to be desired, it is better to immediately refuse to create a site and injections into promotion.
Lack of CA. This happens when working in a limited territory. Most likely, the reason is that you paid little attention to analysis at the stage of determining the direction of your business. Scaling up and entering new regions where there is the right target audience will help to remedy the situation. If this is not possible, you should think about changing specialization.
Lack of interest in the niche. This is the main sign that you have made the wrong choice. If you are not interested in understanding the peculiarities of your own products, you are not ready to delve into the needs of customers and the reasons that motivate them to order – it will be difficult and impractical to develop.
What are the most popular niches in Ukraine in 2025?
Despite the rapid development of technology and changes in consumer preferences, certain popular niches in e-commerce remain unchanged from year to year. As of 2025, the following areas will hold the leadership in Ukraine:
Clothing and footwear. Despite the competition and the constant influx of newcomers, experts are unanimous in the opinion that online clothing stores will long occupy top positions. To successfully gain a foothold here, you will have to rely on uniqueness, because it is not easy to compete with giants like Lamoda, ANSWEAR and Leboutique.
Smartphones and gadgets. Ukrainian consumers show a stable interest in this category. The main challenge for sellers is to gain trust, because people are wary of buying expensive devices without a preliminary test. Now the big retailers – Citrus, MOYO, iStore and Allo – are competing in this struggle.
Goods for children. They belong to the category of emotional purchases – parents spend much more on their children than on themselves. In addition, while adults need to update their closet once every few seasons, children, given the speed of their growth, need new clothes and shoes much more often. The leading positions in this segment are held by Mother care and LCWaikiki.
Cosmetics and perfumery. The main target audience here is women who are prepared to pay considerable sums for products from well-known brands. Unlike many other niches, in this category not little-known brands are popular, but trusted brands. The MAKEUP Marketplace is the undisputed leader in the online space. It will be difficult for newcomers to succeed in this niche. But you can always find your own narrow specialization – for example, to sell handmade cosmetics.
Auto parts. A difficult area for start-up businesses. Here you will have to compete with large stores that have a lot of experience and a good reputation, like AutoBaza. Plus, because of the high cost of goods, significant investments will be required at the start.
