One of the keys to product sourcing, especially where the small home business is concerned, is finding an untapped niche market. By small home business, I’m really talking about the population of work-at-home folks trying to make an extra buck (or maybe a lot more) in their spare time. If you are a student, stay-at-home mom, or one of the many people recently suffering from “work reduction” due to the economy, then this includes you.

I mentioned finding an untapped niche market. A niche market simply means a much narrower slice of an already profitable, larger market that has special appeal to a smaller population of buyers. Do you need a narrow niche market to make money? No, but it is often easier and less expensive to set up an ecommerce site where the niche products are fewer, more specialized, and focused on an easily identifiable target sub-group of buyers. What I think is wild about this is that your office can be wherever there is a Wi-Fi link. Or, you can run your business from a public library, or even from a dorm room. Basically, you can find and sell your products anywhere you call home (that has an Internet connection) at the click of a mouse or using a Skype connection.

Even though it is possible to set up a website, wait for buyers, and still make a little money, I don’t really suggest you use this as a strategy. The point that I wanted to make is that the Internet is such a vibrant, interactive zone that it is possible. However, you can go into business with little start-up cost and almost at the drop of a hat when compared with land-based retail commerce. Success really depends on your thought, research, work, and business planning. And during the course of your planning, you see that your success also depends on your product or products and how you choose to source your goods.

The ideal untapped niche market is an area where there is high demand but relatively little competition. For example, within the larger market of batteries, we have many sub-niches, such as hearing aid batteries. Another example of a niche area to explore would be vintage clothing for dolls. Military insignia is another market where there is a pretty steady demand. To narrow the niche, we might look at World War Two Russian Military infantry insignia.

Many people see finding a fresh niche not packed with competitors as an obstacle. Although important, it is not a terribly difficult problem to solve, especially with a micro business where it takes less to be profitable. Some of the tried and true ways of delving into a market are checking Google, Amazon, and eBay. I recommend using the Google Hot Trends and Insights tools as they can provide valuable information on trending niche areas. Keep your eyes open–it is amazing how much product research you can do by just looking at people. Do a little cultural research into what young people are buying and doing. Check out your local merchants and find out what people are spending money on.

Product sourcing for home business requires that you give consideration to a number of factors. Two of the most important are product quality and supplier reliability. Your target customer group will expect a certain level of quality, and you must–at the minimum–meet that level of expectation. Even better if you can go beyond the baseline expectation. Second, to some degree your business will depend on supplier reliability. In other words, you supplier must be able to provide you with adequate product quantities of sufficient quality in a timely manner. And, their customer service must be immediate and professional.

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