A good niche is one where you can combine your personal strengths with your personal interests, in a defensible way. What do I mean by that?

Any niche on Shopify is big enough for you to make substantial money. The only question is in which niche you can stand out — and do so sustainably. To be sustainable, your store needs to be very difficult to copy. And to be very difficult to copy, you need to bring a personal edge to your product, store and general strategy.

The five traits of an attractive niche

  • High margins (gross margins >70% minimum)
  • Recurring revenue (ideally a subscription model)
  • Easy to ship (packaging, storage, and high value per cubic meter)
  • Asset light (not much capital tied up in inventory)
  • Ability to be unique and defensible

The supplements example — and the trap

Take supplements, which in my opinion is vastly oversaturated. On paper it fulfils every criterion:

  • High margins — producing small pills is usually cheap
  • Consumable, usually with a subscription model
  • Light, easy to package & ship
  • Unique formulations make it hard to copy
  • High pricing power avoids typical cashflow issues

Sounds great — so what's the problem? We're not the first to realize this, resulting in massive competition entering and saturating the market.

The basic rules of economics dictate that the best niches also attract the highest competition, all else equal. The "perfect niche" checklist is public knowledge — which is exactly why it isn't enough.

Full circle

So I'd like to reiterate: the best niche is one where you can add your personal edge to it. Otherwise you'll become a drop in the ocean of competition. I wish you the best of success!