It may seem counterintuitive that niche e-commerce sites do so well. After all, who would think a store selling only ball bearings, a Beerbelly beverage container or "Back to The Future" memorabilia would be successful?
And yet sophisticated search-engine technology and marketing, coupled with a more mature online shopping base, is proving that these uber-specific Web stores are prospering.
Indeed, so-called "long tail" searches, in which people use longer, very specific queries, say a "1-inch stainless steel pillow block bearing" instead of "bearing," is often how people find these sites. And, researchers say, as more people realize that the Internet lets shoppers find obscure or highly specialized items, there's more incentive to produce them for sale.
Add social-commerce to the mix, in which people on MySpace and blogs pass on opinions about their favorite products, and it's easy to see how selling a specific item can bring in the big bucks.
Skip McGrath, eBay book author and PowerSeller, who recently wrote "Ten Little-Known Highly Profitable Niche Markets on eBay," says he believes niche sites are now the only way small businesses can turn a profit on eBay.
"For the little guy or gal, niche selling is the key to survival, finding niches that aren't attractive to the mega-sellers is where the money is," says McGrath. "If you sell a broad-based consumer product, you're up against the big sellers with lots of money and there's not much you can do if they import container loads of the stuff from China, you won't be able to match the prices."
It's All About the Passion
But how exactly do you go about launching — and maintaining &151; a successful niche site? In most cases, it basically involves passion, deep insight or knowledge about the product or service, some elemental market research and a bit of luck.
"When people ask me what niche to sell in, the first thing I ask is, 'What do you really like?'" said McGrath. "If you have passion about something, you automatically got the ball on the 50-yard line because with passion comes knowledge, it's not a chore to learn about the product, and that's what people want during the purchasing experience, your insight on the stuff."
For Stephen Clark, the man behind www.bttf.com, passion is what fuels his "Back to the Future" site, which he confesses with a chuckle, is successful despite being based on a movie series 20-years-old. Clark, who has a full-time day job at a nearby university, went online in 1995, though the site's genesis was a fanzine launched 15 years ago.
"I realized it was cheaper and easier to go online," says Clark. "And at the same time realized selling merchandise was the best way to fund my little obsession, because there was a demand for it. I was getting inquires about where to find toys, t-shirts so it grew from folks looking for hard-to-find items."
But, as with any niche audience that's gone through the trouble to track you down, Clark's customers are demanding, in that they want memorabilia that is genuine and licensed — no rip-offs. "There's lots of fake stuff on eBay, but my audience is picky, they won't touch it. If something's not just right, if it's a t-shirt with a character saying something they just wouldn't say, they flat out turn their nose up and say, 'I'm not buying that, it looks like a flea market item.'"
Given the high expectations, it's only natural that Clark would share the fanaticism for the classic 80s movies that his site visitors do. In terms of marketing, he said AdWords is too expensive, and because he's got a search-friendly URL and years online, he's at the top of the search engine results anyway.
Where his luck comes into play is his connections. A former partner had Hollywood insider access to the cast and crew, and when he bailed on the project, Clark took over, and now acts as a consultant to some of the actors, managing their Web sites, as well as offering advice to Tinseltown's marketing machine.
"We get exclusive interviews, autographed stuff, everything we sell is approved by the studios," says Clark.
He uses Volusion, his fourth store platform, and he says the best one so far. In terms of shipping, his customers don't want to wait for their merchandise, so he fulfills orders from inventory out of his home, sending off nearly 2,000 packages a year by his estimate.
Clark, however, is not without his own eye on the future. "I heard of this MySpace and YouTube stuff and I'm scratching my head over it saying, 'I don't get it.' But everyone says this is the new way to network, so I've learned to roll with the flow and learn the new ways of attracting new site visitors," says Clark. "So I have a MySpace page up there and did a commercial with a car and put it on YouTube."
For Clark, ignoring the critics and going with his passion is what he says makes the site so successful. "Hey, yeah, my kids roll their eyes at their geeky dad, and my wife is patient that I still do this," says Clark, "but I'm an Alabama home-grown boy and I've been able to take my kids to Hollywood and ride in Delorean cars and hang with the actors in the back lot of the studio, so for me, that's all worth not listening to the nay-sayers who think I'm a bit crazy."
Beer as Motivation
Books Lambert, who runs TheBeerbelly.com as president of Under Development Inc., is also someone who might have been viewed by some as having a less-than-perfect business model for his venture. But — after the press picked up on his contraption and he got 1 million hits to his fledgling site, as well as about 80 calls from offline media, including CNN and the like — he sold his electronics company, turned toward inventing full-time and his beer belly is jiggling as he laughs all the way to the bank.
Lambert also uses a potent mix of marketing savvy and passion, spiced with some serendipity, to run his site. The Beerbelly, by the way, is a neoprene bag that fits under a shirt and can be used to avoid paying $9 for drafts at sporting events.
"Honestly, I didn't think I was inventing a product," says Lambert. "I'm a closet inventor, my buddy's an industrial designer, and one day we're hanging out drinking beer and I have teen-age kids and I was saying how they're awesome, not like me, who went to games with beers in my socks. So we were goofing around talking about how to sneak beer into places and I'm a surfer so I cut up a wet suit and stuffed a water back-pack into it and we're joking around about how it looks like a beer belly. It was just a fun afternoon."
They enlisted the help of a friend, who saw one of them wearing the prototype at a party, and refined the design. "We decided to put up a Web site to see what happened. I sent one e-mail to Gizmodo saying, 'Hey, take a look at this.' They did a huge thing and it got picked up by the press and we had 3 million hits in two days."
What ensued was a "brutal six months" of handling the traffic, orders and fulfillment, but eventually Lambert arranged for an overseas manufacturer to make his Beerbelly. His site now gets anywhere from 4,000 to 20,000 to 100,000 unique visitors a day depending on the season and press coverage.
In regard to launching a niche site, it does, however, pay to do your homework once you've identified your passion, by following best-practice market research. This includes searching to see what competition already exists, testing key words, calculating an estimated profit margin by figuring how much it costs to make your product and operate a Web shop, and finally, by giving out free samples to get feedback.
"Our market testing," says Lambert, "was to build 100 samples, put together a survey and give it out to friends for their input. There's no way we'd be here without word-of-mouth and blogs and news sites. The cheapest thing is to just put it up on the Internet and see what happens next."
Now that things have settled down, Lambert just completed a redesign on his site because the navigation, while cool, was horribly confusing. He showed it to people in coffee shops and based on feedback, made a cleaner, less cluttered layout.
And while he admits he's now trying to learn the nuts and bolts of e-commerce, search engine marketing and such, he's not about to make it all work and no play. "We're trying to develop a sense of community at the site where you can post your own videos and have a lot of fun with silly ideas for ads," says Lambert. "We'll put some videos at YouTube. Our marketing concept is more about giving things an opportunity to grow, plant the seeds and see what happens instead of jamming things down people's throats."
Get Your Bearings on eBay
For The Big Bearing Store, testing the market was easy. The company sold its vast inventory of all types of bearings on eBay and was having such success, they moved to ProStores and set up their own shop a year and a half ago.
"We were used to doing business the traditional way, and I'm the young guy here," says 24-year-old Kevin Carnell, "So I know the computer thing and how many people are shopping on the Internet, so I brought up the idea of doing eBay and we were getting good traffic, now with ProStores, it's double what it was. Ebay is like a mini version of the Internet, if no one is buying it on eBay, then chances are no one will from the Internet so you definitely get a sense of what type of demand is out there."
For Carnell, designing the site, which sells to a lot of retailers, was a big task, given that in his industry, the same bearing may have 20 different part numbers, depending on what company was making the purchase. "I did a lot of cross-referencing so you could still find stuff. But I approached the whole project as if I was someone who knew nothing at all about bearings so they'd find things easier."
In fact, he created a "most popular" section that does extremely well, and explains the primary function of the different types of bearings. "I wouldn't call it a passion," said Carnell, "But I know way too much about bearings."
In his experience, PPC and SEM hasn't paid off because people are already using long-tail searches for most of the company's products.
Like his fellow niche site operators, he said if you have a reliable, affordable product that's easy to find through organic search, word-of-mouth will follow and that leads to more links to your site, which leads to more hits.
"We have all these hobbyists and builder type people posting in chat rooms that we're a good place to find bearings for weird stuff, and it gets passed on and you get links from credible sites that lead to more relevant listings and we did nothing to instigate that."
What does pay off is a site with prominent contact information. "If you're selling something, your phone number and contact should be on every page. It's all about trust," says Carnell. "We get lots of people who see the site, but want to place a huge order, so they're more comfortable at that point picking up the phone."
For Love and Money
McGrath, the eBay blogger, author and PowerSeller, says, "Once you test the product and research keywords and such, making your passion into a business is the way to go, because then taking care of the final crucial step, personalized customer service, is a joy, and you get paid for it."
Michelle Megna is managing editor of ECommerce-Guide.com.
