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Pick the Right Marketplace Niche for Your Business in 2022 With These Methods

eCommerce has always been a great way to generate a passive income. However, with Covid-19’s impact on digital adoption, eCommerce has the potential to become more than just a side-hustle. These days, nearly anyone can create a marketplace from scratch. But the first thing you need to do is pick the right niche for it. 

It may seem like a good idea to do what everyone else is doing, but at the same time, you don’t want to select a marketplace specialty that is oversaturated with competitors. Regardless, building a successful business of any kind begins with an idea—a good idea. This guide will explore six tips for finding the right niche for your online marketplace.

1. Learn What a Niche Is

What is a niche, and why does your online store or marketplace require one? After all, you can always go the Amazon or eBay route and open a horizontal marketplace that caters to multiple demands. Again, the biggest issue with this is competition. You will be competing against large, well-established retailers. Thus, it is a better idea to focus all resources on a singular niche. But what is a “niche”?

A niche describes your business’s specialty. This includes the needs or demands it satisfies as well as its “gimmick.” Figuring your niche out will help you understand your potential customers. This will, in turn, help you develop a solid sales pipeline and focus your marketing.

Furthermore, picking a specialty or niche will give you greater brand control and allow you to become an expert in your industry over time. This will allow you to charge more for your products. When looking at successful online businesses and marketplaces, practice identifying their niches. Some of the most lucrative niches include:

  • Fitness and lifestyle products
  • Technology
  • Furniture
  • Clothing
  • Food delivery

Even if they’re a general-purpose marketplace – there is always something that makes them special. For instance, while Amazon is known as a horizontal marketplace that also supplies products from third-party vendors, it is a technology company. This is a niche that it has evolved into. 

It began as a bookseller. Today, it uses innovative technology to deliver its goods and services. If you plan for longevity, always remember that your niche will most likely evolve too.

2. Identify Your Passion and Build Around It

We can wax poetic about how entrepreneurship is a personal journey to self-discovery. However, if you hope to build a successful business – whether traditional (physical), online or hybrid – you must be passionate about it. As such, mission statements are often considered an important part of the modern business plan. Your niche should either align with your expertise, vocation, hobbies, or fields that you have an interest in. It should excite and motivate you enough to keep you going when the going gets hard.

If you’re having trouble figuring out your passions, it would be a good idea to sit down and create an inventory that lists at least ten passion areas and topical interests. Get creative. Create mind maps, draw pictures and build a vision board.

3. Select an eCommerce Model

If you have trouble selecting a niche despite identifying your passions, you can try selecting and committing to an eCommerce model. This could potentially clear any creative blocks and help you visualize your future marketplace.

First, you need to figure out how you’ll host your store or marketplace. Will you build a site from scratch and seek out a website host provider? Will you use an eCommerce platform (which we highly recommend)?

Mapping out the logistics of running your eCommerce site before you decide what product or service you’ll provide may be the inspiration you need to determine your niche. Maybe you’ve reached this step, and you already have preliminary ideas for a host of potential niches. If so, you can start researching your competition.

You can research which eCommerce models they use. Do they have employees, a fulfillment center for goods, etc.? You can then formulate ideas on how to set your business apart from theirs. Your research should include reading in-depth Google reviews written by verified customers.

After extensive research, you may find that competition is too stiff, and you’re not introducing anything new to the market. In this case, you should return to the drawing board and test your other ideas.

4. Take Stock of Your Assets and Resources

 What do you have on hand? Do you already have a brick-and-mortar shop that caters to a different niche? What is your current financial position? How does your credit score/record look? Do you have start-up capital? These are just a few of the questions you should consider – not just in your attempts to drum up an idea for a niche but before starting any business.

Nevertheless, your informal assessment of assets should not be limited to physical or financial resources. You should also review your social connections and business networks. Do you know people in high places? How easily can you find suppliers, manufacturers, and distributors to build your business? 

Taking an inventory of your skills and abilities is important too. Do you feel you need to go back to school or take a short internet course? What access to information and educational resources do you have? Conducting these evaluations will not only assist you in understanding what you have, but it will also help you understand what you lack. 

This is important. The best niches address a deficit or a problem. You may find that your lack or needs are common in your social groups and society at large. You can then brainstorm ways in which you can solve this problem(s). Your solution(s) can eventually become your (preliminary) niche which can eventually be used to form a unique selling point or proposition. 

5. Consider Quality Over Quantity

When ‘niche’ is used as an adjective, it typically refers to fringe items that appeal to a subset of people with specific tastes. For instance, certain fashion brands or music that appeals to “indie kids” or “hipsters.” Despite their seemingly limited demographic, these brands maintain a steady cash flow and cultural relevance through clever marketing and charging higher for their items.

Exclusivity and artificial scarcity have always been used as marketing strategies to elevate brands into status symbols. You can choose to focus on supplying rare, luxury, or high-quality items as opposed to trying to cast a wide net and choosing an overinvolved niche.  

Thus, your niche can be focused on providing services and products. However, establishing new luxury brands has never been easy. It often requires some endorsement from a public figure or established brand along with some astute marketing.

Furthermore, social media (and the internet at large) have made effective advertising more accessible. Hence, you should not shy away from selecting a highly specialized niche. Of course, this route may be far riskier for novice entrepreneurs and people who can’t reliably dedicate their time to nurturing their businesses. 

6. Explore

The psychological impacts of starting, owning, and managing an SME have been well-documented. Entrepreneurship can be a very lonely journey. Hence, it is important to escape isolation as much as possible, especially when you’re trying to catalyze your creativity.

Take frequent mindful walks, meet strangers and acquaintances, and travel as much as possible. This may be harder for you if you suffer from any disabilities that limit your mobility or movements. If that is the case, you can try to be more active and sociable online.

Create multiple social media accounts, friend and follow more people, frequent as many popular forums as possible, etc. Using tools such as Google Trends is a great way to trawl the internet for currently trending topics. However, rubbing shoulders with the internet’s denizens grants you true perspective and context.


A micro-niche (or sub-niche) describes a highly-focused or narrow niche that still appeals to a wide demographic. Again, if you have the resources and the right idea, you should not avoid picking a micro-niche over a proven macro-niche. However, if this is your first foray into digital entrepreneurship, you may benefit from playing it safe to gather some experience.  Nevertheless, whichever option you choose, you must ensure that you have the right tools to build your eCommerce website.

About the author:

Sam Bocetta is a cyber-authority with over 25 years of experience and a comprehensive understanding of fraud, identity theft, and privacy issues that plague millions of victims worldwide. However, during his retirement days, he mastered his online business and marketing skills by keeping an eye on both present and future trends. Sam has written for GlobalSign, AT&T, DevOps, FEE and CSO among others.

Head of Content Marketing at CS-Cart | Website

Yan Anderson is the Head of Content Marketing at CS-Cart with over 10 years of experience in the eCommerce industry. He's passionate about explaining complicated things in simple terms. Yan has expertise in building, running and growing eCommerce marketplaces. He loves to educate people about best practices, new technologies, and trends in the global eCommerce industry.