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Establishing a Niche Marketing Strategy

Serve an underserved market and grow your business.

With so many truly big players in the online marketplace, some sellers feel it would be futile to try to sell alongside the mammoth businesses. While it’s true that it could be a struggle to pit your delightful used book boutique against the likes of behemoths Amazon or Barnes & Noble, that doesn’t mean you can’t compete—and, better yet, you don’t have to. Four simple words can get you out from under the weight of the big guns: Don’t compete—be unique!

Indeed, if there’s one thing the Internet and online merchandising have enabled, it’s the potential for you to establish a flourishing niche business, one that’s nimble and capable of attending to specific needs of specific customers. Niche marketing is something millions of other folks have already done well… and you can, too. Here’s how.

Have you ever found yourself wanting a particular product or service only to be frustrated that there isn’t a ‘solution’ out there to solve your problem?

What is ‘niche marketing?’

Niche marketing, in its simplest definition, is actively appealing to specific target audience by offering products or services of particular interest to the audience. A niche market strategy, therefore, is defined as identifying a product or service that seems to be in reasonable demand by a select audience, yet has been significantly underserved by existing suppliers or businesses.

While many of the large retail companies, outlets and manufacturers are busy appealing to a broad cross section of target audiences, they often elect to avoid specializing in specific commodities or serving smaller markets for fear of not reaping high-end profits. This results in an underserved segment, thereby becoming the niche opportunities for small businesses.

Businesspeople who can deftly identify these underserved customers and deliver to their specific needs stand to prosper from recognizing and responding to the “niche.”

How can you identify a niche?

Many niche market successes arise from everyday situations. Have you ever found yourself wanting a particular product or service for a specific need only to be frustrated that there isn’t a “solution” out there to solve your problem? Congratulations, you might have just identified an underserved niche market.

Consider the seamstress who provided exquisite hand-tailored suits and blouses for her clients yet struggled to easily locate appropriate notions to complete the ensembles. When she learned other seamstresses in her area complained of the same problem, she set about to establish a sourcing network for buttons, zippers and more for her specific needs then opened a business that provided these supplies to other seamstresses. From her own need, she identified an underserved niche market—of which she was one of the underserved consumers—and established her own specialized notions business.

How will you establish the niche you’ll serve?

One way to determine a suitable niche market is to first think in terms of differentiation. Besides seeking an underserved need out there—as in the seamstress example—you should also look for opportunities to establish a product or service that is better, faster, more focused and generally more desirable to a customer than those offerings from other businesses.

With “shopping experience” and “total customer satisfaction” being key drivers in today’s refinement marketplaces, your chances are good that you can identify a need (or reasonable indulgence) where customers will appreciate the special attention a niche business can provide.

To get you started in your quest for a niche market, consider these approaches to help you establish your niche and ensure you’re differentiating your approach in a way that will matter most to your customers:

  • Define a target (niche) market and focus squarely upon it. If you’re eager to compete in the kitchen wares segment, differentiate yourself by, say, catering to bachelors or single parents. Make efforts to fully understand the unique needs of folks living these lifestyles then offer to them the food preparation items—and even easy-to-prepare recipes that will help them take the chore out of cooking and add some fun, too.

  • Talk to your customers to learn more about what they like and dislike, and what additional unmet needs they might have
  • Research your market thoroughly before you launch a niche business. If you believe you have identified a niche, discuss it with others—family, friends, people you trust who will give you objective feedback. You want to be sure there truly is a need out there, and others will likely tell you if your idea makes sense.

    When you have compelling cause to go forward with a niche business, continue to research its potential by visiting retail stores, scouring the Internet and reviewing topic-relevant magazines and other publications. Verify your understandings, determine who might be competing in your space and make adjustments to greet your niche customers in a refreshing new way.

  • Determine the other demographic details of your market and its potential customers. Determine if your prospective customers are looking for high-quality, high-end products or, rather, if they’re in need of median-quality, lower-priced items. Investigate whether your market prefers to purchase in a brick-and-mortar setting, or if they’re well served by an online shop where goods can be shipped directly to their doorsteps. As in the initial premise of avoiding competition with big book sellers, a unique book boutique could offer an eclectic book-finding service that can ship unusual and hard-to-find books anywhere in the world.

  • When you’ve begun to offer your niche products or services, talk to your customers to learn more about what they like and dislike, and what additional unmet needs they might have. As you encounter the sorts of folks who might serve as the members of your target market, engage them in conversation, showing interest in their situations and what might bring more ease or enjoyment to their lives. When you have begun serving a niche market, be sure to keep the conversation with your customers going, ensuring you’re adapting to their needs along the way. This will be the key ingredient for your ongoing niche success.

Niche marketing isn’t typically an overnight success and often takes months or years of refinement to establish the perfect approach. Once you’ve found your niche, however, it might be the bearer of the business profits you’ve been seeking.

About the author

Dennis L. Prince
Dennis L. Prince has been analyzing and advocating the e-commerce sector since 1996. He has published more than 12 books on the subject, including How to Sell Anything on eBay...and Make a Fortune, second edition (McGraw-Hill, 2006) and How to Make Money with MySpace (McGraw-Hill, 2008). His insight is actively sought within online, magazine, television and radio venues. Opinions expressed here may not be shared by The Online Seller and/or its principals.

  • Great tips. I think is important to recognise which products should not be bought in bulk because fashions change quickly.

  • Very nice article. I think that niche market research should be begining of eny business. It just makes your life easier later on.

  • Great article, but I have one follow-up. After defining you target niche do have any tips on reaching those potential customers?

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