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January 5, 2022
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A niche market is a specialized section of the larger market that may be focused on the sale of a single product or service or theme.
Niche markets as a term generally refer to the business strategy of cornering the sale of products or services to a niche audience rather than attempting to break into the broader market.
A niche business may specialize in a market like tennis shoes or construction work for people with mobility problems.
It is important to understand that niche markets come in different sizes. Even a very small market can be a profitable potential market if it has a high-value product.
The core concept is to identify a part of the mass market that has enough potential customers to support a business while having few competitors, allowing your business to position itself as a market leader with relative ease.
Part of what makes operating a business in niche markets so attractive is that developing a niche marketing strategy is quite straightforward since you already know the general desires and pain points of your target market as compared to a business working in a larger market.
So, that’s what a niche market is. Now, let’s look at some real examples of niche market ideas in action.
Niche markets don’t necessarily have to support only small businesses. In fact, niche markets often have a large customer base.
Here are 5 classic examples of different niches with a large amount of potential customers within the broader market.
Around 10% of people on earth are left handed. If that niche market was a country, it would be the third most populous country on earth.
With that said, the vast majority of products that we use in everyday life are designed to be ergonomically available for the right-handed majority.
That’s exactly how businesses like Leftys got started with their business idea.
If you can offer a product or service that is not just valuable but essential for a large niche market then you will likely have a profitable business.
Lefty’s knows exactly who their ideal customer is and unlike other businesses that focus on a particular product, small businesses that operate in a niche market can offer a range of products that they know their audience will demand.
Conscious consumers are shoppers that are concerned with the provenance of their products.
They might be interested in reducing the carbon footprint of their products, less plastic, less packaging, fair-trade products and have special requests about their products.
It’s a profitable niche market as conscious consumers are willing to pay more for a product or service that is in line with their values.
Niche markets like this are growing exponentially as new niche marketing campaign methods are able to target people with these interests that are becoming more common as climate change continues to progress for the worse.
Conscious consumers often have strong customer loyalty for niche products in a niche selection which helps create a profitable market overall.
Niche businesses like Bee’s Wrap, Divvies, and Vegancuts have all benefited from this niche market idea and maintain a very loyal customer base by giving customers exactly what they want.
Gamers are a huge niche market that even back in 2019 was worth an estimated $151 billion dollars.
With downloadable content and in-app purchases, this niche market is only getting more profitable as time goes on and technology becomes more affordable.
Selling digital products is the key to effective niche marketing in the video game industry. It’s important not to overdo it though because brand loyalty is at stake if you put too many paid extras in your online business.
While it is a niche market with a high level of competition, research shows that gamers are one group of customers that are happy to spend time on more than one product or service, making it easier for many competitors existing in the same niche
When wanderlust strikes, it’s important to be prepared and that is why the travel and vacation market is one of the most profitable niche markets out there.
Whether you’re offering travel advice, hotels, or any kind of travel-related product or service, you will find more customers in this niche market than you might expect.
There are a few examples of businesses like Nomatic that have effectively capitalized on the potential of this niche market.
Nomatic sell clothes for people who spend their life on the move. Things like travel backpacks with specific product features or travel towels can be very attractive for travelers.
There have never been as many remote workers as there are right now. With a good income level and a stable job, this is one of those niche markets with huge potential.
Many small businesses are looking to capitalize on the huge audience from the work at home revolution and the office supplies industry can now sell to new markets of private individuals.
Freelance at Work is one such brand that sells electronics and other work-at-home essentials that are both cost-effective and in demand.
It’s a good idea to stay up to date with the latest working trends to see if your brand can find a niche with less competition and capitalize on key areas of a potential niche market as fast as possible.
So, that answers what a niche business might look like, but it’s also important to pin down exactly what a niche market is and how niche marketing works.
A niche market can be defined by different criteria and each of them can provide a different value for the customers.
For example, a niche market and the way that you might market a niche could be defined by any of the following:
Working in a specific niche has its own benefits and disadvantages.
While your niche product might benefit from the reduced competition – making your Google Ads less expensive – you can be sure that the search volume for your niche product will be much lower than other non-niche ideas.
Likewise, niche marketing can also have its own pros and cons.
Being an expert in one area makes you different from the competition.
Consider a large chain store that sells everything from groceries and furniture, to clothes and homeware. Sure, you can find what you need, but it is rarely of the best quality. It’s more of a one size fits all approach.
Now, contrast that with a more specialized shop which offers better advice, more personal attention, and a higher quality of products for its customers.
This is the advantage of operating a business in a niche. It’s also a fine example of why niche marketing is much easier as you are branding your business really narrowly and can be recognized easily in the market for the products that you are selling.
A business operating in a niche can take advantage of easy niche marketing on social media. Marketing efforts for niches are made much more simple by targeting sub-niches on data-rich websites like Facebook or Instagram.
For example, you might want to target pet owners in a specific locale. That’s easily done through Facebook as users happily offer this personal information for free.
On the other hand, having such a narrow focus on the products that your business is selling can limit the opportunities to expand your business.
While your business will enjoy less competition for its customers, your business is more dependent on just a few item categories.
For example, if your audience is interested in a specific sports product, such as tennis, it is going to be hard to develop success outside of a limited industry.
It is also time-consuming to find new products to sell that fit with your brand as there is a much smaller pool of companies that will produce items that you can sell in your business niche.
Now that you have an idea of the pros and cons of niche marketing and the tools available for success operating in a niche industry, it’s important to consider how to transform your business into a money-making niche company.
First things first, take a moment to think about ideas without researching too heavily – start with a brainstorming session.
Think about what qualifies as success for your idea. What would your business be selling, what do other top-of-mind companies and competitors have in common, and what comes into your mind when you think about these markets generally?
Take a note of all these questions and more. Then, take a minute to think about what you are already strong at, what skills or knowledge do you have?
For example, you might already be experienced in marketing, or you might have a history selling digital products, or perhaps, you know that you have access to start-up money that can be used to get your new business off the ground.
Follow your passion and it will be easier to develop a small business and once you start your niche marketing efforts later, things will seem much more natural.
Keyword research can seem very complicated if you haven’t got much experience in marketing.
Sometimes advertising against keywords can cost a lot of money due to interest from competitors and you might not know how to find keywords yourself.
Luckily, there are a number of free tools and premium tools that are easy to use and will boost the effectiveness of your marketing campaigns:
These tools will allow seeing what people actually looking for and won’t require a lot of money to get started either.
Keyword research is a vital part of any niche marketing strategy and with a few simple tips you will be able to get a foothold in your niche.
Social media is vital when it comes to engaging with the relevant communities in your niche.
It’s also the perfect place to start your niche marketing campaigns.
You can start by looking for discussions or common questions on Instagram, Facebook, Twitter, Quora, or Reddit.
Social media websites such as Reddit are an invaluable resource to any niche marketing campaign as it is clear to see the issues and trends that are important to your target audience.
Similarly, as a business owner, you can start to gauge how large your audience might be.
If there isn’t much happening on social media in your niche then it may be an early sign that the niche is not large enough to support your business.
If you already have an audience – social media followers or an online community that you are a part of – talking with them can be very beneficial for finding ideas for a niche.
It’s a simple method but it’s also a great way to build trust with your future customers and will provide the most honest feedback.
Your audience might give good insights into where they find their advice. Once you know that, it is much easier to set up effective niche marketing concepts.
Clearly describe who your target audience is and what criteria make them different from other audiences.
Knowing how to define your target market is not always simple but it is an essential aspect of marketing that makes sure your business doesn’t waste money and time advertising to people who are not interested in your products.
Your target market profile is the group of people most likely to purchase your items. You want to focus your marketing on them because this is your ideal customer.
A target market could be defined by a number of factors such as age, location, income, interests, and many, many more.
Conducting market research can be an effective way to define your target customer.
On the topic of research, competitor analysis is another important step to consider before setting up a business in a niche.
Review who is already competing in your market. Check to see how effective their marketing campaigns are. Can this niche support another business?
This might be the step in your niche business journey when you should simply stop and focus on another niche idea because the market is full.
Understanding how to conduct market research does not require the help of marketing experts or expensive external consultants.
There are a few simple steps you can take to begin your market research.
Start by getting to the core of your business idea by identifying the main question about your business that needs answering.
Defining issues will keep your market analysis on track. It’s important to consider:
Staring with simple questions will unlock much more potential down the line.
During the process of market analysis, you may well come across some key pain points for your customers.
It should come as no surprise that finding answers to these pain points and problems can be a huge benefit for any aspiring entrepreneur.
It’s not just in product selection that customer problems are important however – it’s also the key to effective marketing.
Try to point out what problems your customers have and how your business is able to solve them specifically.
It’s a time-tested method to increase the effectiveness of your company marketing.
Still, it is not always enough to simply solve customer problems since every single company out there will be focusing its own marketing messaging on the same concept.
The place where you can make the difference specifically is called your unique selling point and it is that thing that you can do for your target customer that none of your competitors can do.
Understanding your unique selling point or USP starts with an effective working definition of the concept and why it is important.
It is not just the features of your company that are different from the competition. It is also the thing that you should be basing your business’s plan on and it must also be a key feature of your marketing campaigns.
Your USP should be instantly obvious to any customer and it should be more than a simple aesthetic difference.
The USP of your brand should be the thing that other companies notice when they do their market analysis on your product.
It is the thread that pulls all of the various aspects of your ideas together.
Now that you have a working concept, it is time to test the water.
Many companies work with an MVP model.
MVP stands for Minimal Viable Product and it refers to the baseline a company needs to get to before they can start offering their product to the community.
It is a great method to understand the potential of your product or service in the market.
It can offer answers to questions of market saturation or community interest.
Working within the MVP model means that you shouldn’t invest too much time or money with the first idea or iteration of your concept.
You should start by launching as simple an online store as possible and choose PPC rather than SEO for your marketing as it takes way more time and resources.
Once you see your ideas working as an MVP it is time to then consider investing more into your idea.
Getting set up in a niche market can be extremely beneficial to your prospects of success due to a much smaller amount of competition and a much more engaged customer base.
However, as we have noted it might also limit your prospects for expansion and the market might already be saturated by the time that your company enters the market.
In order to effectively navigate these potential issues, it’s important to take a step back and first analyze the best things you can sell online to make profit.
Once you have a really watertight product you can start thinking about entering the market and doing that effectively requires you to know how to brand your product.
With that, you’re ready to sell your product and enter your niche market.