Portrait of Christian Otto Kelm
March 27, 2019
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5
min read
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Written by: 
Christian Otto Kelm

Niches on Amazon? The right choice makes all the difference.

Guest article by Christian Otto Kelm. Niches on Amazon? I beg your pardon? On one of the largest marketplaces in the world? Unfortunately, most people talk about the infamous organic niches. Take a different number, change the colour, you can certainly offer it cheaper. Or in better quality, because quality is so easy to communicate on Amazon and by definition represents a benefit plus one. But for the customer in the respective individual situation and not because you gloss it over like that! The approach of branded product, and specially branded products, becomes more complex. This kind of bundle has long been considered the ultimate strategy to make money on Amazon. Brand trust paired with your own listing - perfect, then, if you can get your hands on enough branded goods. From this, you can derive a hard-to-find strategy. Imagine all Red Bull varieties in one pallet, or every Funny Frisch crisps variety. A perfect product to meet demand without a single competitor, because hardly anyone goes to the logistical effort.

"The actual five strategies are based on technological advantages, temporal benefits, trends, licences, and atypical application"

A technological advantage that is worth protecting or difficult to copy is indeed a niche. In the field of smart home lighting, OSRAM was able to supply the market with E14 LEDs alone for over 2 years. Even the biggest competitor Philips was not able to copy the product. This led to absolute competitive advantages and unique selling points. A money-printing machine due to the compatibility with direct competition. Interestingly enough, some suppliers managed to cleverly take advantage of this situation. They developed accessories, an adapter of an E27 socket to E14. In this way, they were able to circumvent the actual demand. The E27 lamps could still be used in E14 sockets.

The story of the eggshell breaker on Amazon

Utility products often have significant added value - salad cutters, eggshell breakers or pancake silicone moulds - no one knows them. This makes the market very exciting in terms of timing. In the short term, you can now take the first position in the special usage segment alone. The problem only arises with market penetration when the easily reproducible products are copied. Or in the context of the pancake silicone mould, there is a demand boost around Christmas and then after a few weeks the reviews for all products say it does not work or even melts in the pan. More special are products like the eggshell breaker, such spotlight products need the right light from outside. The reason why customers should look for it and need it must be triggered externally. However, there is usually little time for this, as a quick copy of the products is easily possible.

The famous trends, on the other hand, have the problem of absolute ignorance until the time comes. Only the fewest can trigger trends, mostly it is a matter of noticing and running with them. Here, it is necessary to be quick or to observe all laws; the Fidget Spinner or food supplements have shown this in many ways. Pokemon Go should be mentioned here as well. While power banks were absolutely necessary but completely collapsed in price, the market for mobile phone bike mounts was stable and was able to grow considerably due to extreme demand. However, everything happened within a narrow time frame. If you order too late or simply play for keeps, it's over!

Does it make sense to buy licences?

Licences used to be a safe approach. If you identify a product without Elsa or Paw Patrol, you can start immediately. In the past, it was easy to be the only person to license a calendar for Fireman Sam during the Christmas season. Unfortunately, it is now the case that every retailer gets the idea and the licence holders give away considerably more of the coveted licences. So apart from the pure price of the licence, one must still expect considerable competition for standard products. Atypical uses such as the French fry shovel for building blocks and bricks are set up in the same way as the peel potato fork as the German answer to sushi sticks. You concentrate on one product and look for an alternative use. Or you combine products to create other solutions. A few staples and a rope with 24 paper bags suddenly become an Advent calendar to fill. Nothing is based on what is already sold on Amazon. The basic identification of such things is done on the market as a whole or on the customer. If all these things were recognisable on Amazon, one can safely assume that it is almost too late to enter the market.

Conclusion:

Last but not least, just because you think you have found something doesn't mean that someone else doesn't have the same idea. At the same time, already 6 weeks earlier in contact with manufacturer or 3 months earlier than you with goods on the ship to Germany.

About the author:

Portrait of Christian Otto Kelm


Christian Otto Kelm, founder and managing director of Content-Keyword-Management, is one of the experts for Amazon and Amazon SEO in Germany. He built up Amazon as a channel for the gaming accessories manufacturer Speedlink, and later worked for the Amazon agency factor-a and the Amazon retailer KW Commerce. Today, he supports sellers and vendors on Amazon - both in an advisory and operational capacity - according to the motto "help people to help themselves".

Editor's note: Guest articles and interview responses do not necessarily reflect the opinion of Merchant Magazine. They are the basis for a mutual exchange around the diverse world of Amazon commerce and e-commerce.

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