Whether you jumped on a trend while it was hot or watched the competition for your products grow fierce over time, it’s never a bad thing to find yourself selling in-demand products! But that doesn’t make it any easier if you’re facing one of the following scenarios: 

  • You have an established ecommerce business and you’ve been watching your rankings and revenue slip over time as the competition within your vertical grows.
  • You have a new ecommerce business and you’re entering a highly saturated market.
  • You timed a trend right and your products became a smash hit, before revenue peaked and started to decline. 

While these three scenarios may seem like different situations, they actually point back to the same challenge: market saturation. How do you handle it?

What Is Market Saturation? 

Market saturation is when the number of people selling a product outstrip the actual demand for the product. We’ve all experienced the repercussions of market saturation before as consumers. If you’ve ever wondered why your iPhone breaks on command every two years or why you still have to buy replacement light bulbs when we have the technology to make bulbs that last for years, it’s because of market saturation. When major companies find themselves looking at a market full of people who already have their products and don’t need to buy more, they tend to start breaking things on purpose. Seriously. 

While selling people garbage (fine, “planned obsolescence”) might be a nifty solution for the big guys, we’re going to offer some alternatives that will help you sleep better at night. Most smaller ecommerce businesses don’t face that specific market saturation challenge anyway; market saturation for SMBs is more like due to:  

  • Selling trendy, consumer-friendly products that everyone else wants to sell too (vape juice, fidget spinners, turmeric/matcha tea/the latest health food craze, etc) 
  • Selling generic products from overseas manufacturers 
  • Selling dropshipped products (if you did the legwork to find low-profile dropshipping partners who are uniquely suited to your business, that’s one thing. If you spent five seconds importing products through a dropshipping app, assume there are thousands of other people doing the same thing).  

Diversify Your Products 

First things first: there’s nothing wrong with selling trendy, popular products — in fact, selling what’s hot is one of the best things you can do for your business. It just means you need to stay alert. Trend-hunting isn’t sustainable unless you commit yourself to scouting for trends over the long term.

Take advantage of tools like Google Trends or browse through top-selling items within your product vertical on Amazon. At the same time, build out your other product offerings so you can reel customers in with the trending products, then keep them hooked with extras they didn’t even know they needed. 

Trendy products are successful when they’re used as a marketing tool rather than the backbone of your business. Optimizing for these products and featuring them in your ads can capture new traffic, which you can win over and retain with your strong brand and great customer service.

If you’ve experienced a meteoric rise from a trending product and you’re worried that your traffic is doomed to fall off a cliff when the trend recedes, start testing new products on your customers long before you start to notice a decline. Once you hit on a few winners, you’ll be able to smooth the transition if the interest in the original product does decline. 

If you’re selling wholesale products or using a dropshipper and you notice too many duplicates across Amazon or other ecommerce sites, consider looking for different products. It’s absolutely possible to differentiate yourself from your competition by targeting a niche audience or developing a strong brand, but a fully differentiated (or at least less ubiquitous) product line will give you a leg up.

You don’t need to stop using wholesalers and dropshippers, but consider the following rule of thumb: if it was easy for you to source a product, it’s easy for your competition to do so as well. That’s why skipping AliExpress and looking off the beaten path is usually your best bet.  

Plus, having a differentiated product line doesn’t mean you have to go out and invent something. Sometimes it’s as simple as customizing each product in a clever way, or paying a fee for custom manufacturing. 

Develop a Differentiated Marketing Strategy 

Regardless of the products you choose to sell or how stiff the competition is, marketing is the make-it-or-break-it part of thriving in a saturated market. Your four keys to standing out are: 

1. Your Unique Value Proposition 

What makes your product different from the competition? Is it higher quality? More carefully vetted? Comfier? Tastier? More colorful or design-savvy? This is where going that extra step and finding a custom manufacturer or off-the-beaten-path wholesaler can really give you the edge you need, because it means your products are literally different from the prevailing products on the market. 

Try to make your USPs as product-focused as possible. The other three items on our list give you a chance to shine as a business, but this one is really about understanding how to sell each product and thinking critically about why people would choose your product over similar products. 

One word of caution: be very, very careful about making price your differentiator. 99% of the time, this isn’t a sustainable way to run a business because someone will always be able to swoop in and undercut you. You’ll be working with thin margins, scrambling to cut corners, and making profitability much more difficult, all for a differentiator that won’t even last. On top of that, price wars contribute to problematic labor practices industry wide. People will buy pricier products if there are other strong incentives, we promise. 

2. Your Competitive Advantage 

Once you have your USPs down, zoom out a bit and think about the hard incentives people have to shop at your business. Stay logistical here; we’ll talk about brand personality next. Hard incentives include: 

  • Free shipping (free past a dollar amount works too) 
  • Fast shipping 
  • Hands-on customer service, especially if it’s common for people to have questions or technical difficulties within your vertical 
  • A flexible, hassle-free return policy or a money-back guarantee 
  • Product warranties 
  • Loyalty points or reward discounts 
  • Bulk discounts 
  • Product financing options 
  • Freebies with purchase 
  • Easy order updates 

Additional incentives include: 

  • Made in the USA 
  • Handmade or small-batch 
  • _______-certified (fill in the blank with the certifications that fit your industry) 
  • Cruelty-free 
  • Eco-friendly 
  • Community give-back campaigns 

3. Your Brand

Now for the fun part. If your USPs and hard incentives are the cake, your brand is the icing. You can’t serve nothing but icing, but you also can’t give someone a boring cake. Once you know you have the bones of a viable business, it’s time to create the brand that will make people choose you. This is about so much more than choosing a color palette; good brands understand the values that drive their business and find the people who share those values. 

Your brand values are a bit deeper than your brand’s personality, but they’ll certainly be expressed through your brand personality. If you run an educational store that values curiosity and play, for example, then your brand voice will be inquisitive and maybe a little goofy. Brands are exactly like people in this way; someone’s personality can give you a lot of great clues about who they are, but you can only learn what they value by observing the actions they take consistently. For a brand, those actions include: 

  • How you treat your customers 
  • How you treat your employees 
  • The causes you’re committed to 
  • The information you share 
  • How you handle feedback 

Take this seriously and consider the values that truly drive your brand; don’t just use boilerplate values like “Honesty” or “Trust” without thinking about what they mean. That’s especially true if there are visible discrepancies between your brand and its stated values. For example, an eco-friendly brand that uses wasteful product packaging would want to rethink either their packaging or their expressed values.  

4. Your Audience 

Finally, who is your core market? You can think about this as you develop your brand, or you find your audience first and build the perfect brand for them. Either way works, as long as there’s a match between your brand and your audience at the end of the day. 

Your audience is where the magic happens when it comes to “niching down.” If you want to sell your products to everyone, it’s not going to work. But if you sell to the people your brand can uniquely connect with, you’ll have loyal fans for life. Whether you’re modifying products to help an underserved audience, selling “geeky” products to people who like the same fandoms as you, or staying hyperlocal, there should always be a way to identify what makes your audience unique. Find your people and you’ve found the antidote to market saturation.