Finding a Niche Market for Your Online Business
Almost every established industry has a single piece of pie waiting to be divvied up. When searching out your online niche, here are some general guidelines to follow (to help you remember them, notice that the first letter in each term spells out the word niche):
Notice: All too often, niche markets are in plain sight — ripe for the picking. Some people see them, and others walk right by. So stop and pay attention to your personal interests and those of your friends and family. After all, you’re consumers.
Take a look at which services or products you want or need that larger companies aren’t providing. Watch for new trends, too. Find out what people are talking about, and determine what’s hot and different right now. Trends are often predecessors to an emerging niche.
Investigate: If you think you’ve hit on a great idea, it deserves an adequate level of attention. Research the larger market from which your niche originates, and determine whether it’s a growing market. Check annual sales and identify top performers (the large companies) in that market.
Find out what analysts and researchers are saying about possible spin-off segments of the market, and determine whether these industry experts have spotted the same niche that you noticed.
Competition and customers: As with any other market, you have competitors in a niche. Do a little digging to uncover how many others are already servicing the market. If you have zero competition, you may want to reevaluate the demand.
Put your prospective customers under the microscope, too, and find out who they are. Be specific. Note whether they’re single men with dogs, for example, or working mothers with young children. Figure out their preferences, current buying habits, and available income. The more you know about the people you’re serving in this niche, the better chance you have of successfully marketing to them down the road.
Find out whether your competitors are catering to only that particular niche or whether it’s just one more piece of their overall businesses. If your niche is only a piece of the competitors’ pie, you have a possible advantage. You can specialize in the niche and become the expert.
Hypothesize: Before you launch your niche-focused site, you need to test your theory. Maybe you developed the perfect product. It answers a definite need, and research shows that there’s money to be made. To be sure, you have to test, test, test.
Conduct small samples to find out whether people are truly interested. You have to know whether they’re willing to pay for it, whether it answers their needs, and whether they’re ready to buy from a new online resource.
Execute: Create a solid plan for selling to your niche market. Sometimes, reaching this type of customer proves to be more difficult than marketing to a broader customer base. After all, you’re talking about highly targeted and specific customers.
Not only do you have to work harder to locate them, but one misstep in your marketing efforts can also destroy your credibility. An effective selling strategy clearly communicates how your product answers a specific or unique need for that niche customer.
Niche customers are often quite knowledgeable and passionate about the niche that your product or service addresses. Can you speak their language? Talking the talk means being up to speed on current terminology, hot topics, and issues of importance.
Draw in your customers by providing timely, informative content on your website that supports the products and services you offer for that particular niche.
The Internet definitely provides an exciting opportunity to sell to a niche market, and often the opportunity is right under your nose. Many online entrepreneurs stumbled onto a niche market out of sheer necessity. In some cases, the market lacked a product that provided a much-needed solution.
In other instances, a niche market started because an existing industry or market changed as the Internet matured. To stay ahead of the game, entrepreneurs identified smaller segments within their markets that weren’t being served.
Tutor is a shining example of how a need for a product can carve a healthy niche from a larger existing market. The kindergarten through 12th grade (K through 12) market represents billions of dollars, spent by both consumers and governments. In 2013, the market for instructional resources alone was $9 billion and was experiencing unprecedented 7 percent year-over-year growth.
Combine that spending trend with the quickly rising cost of college and an increased emphasis on students obtaining academic scholarships to offset tuition and you have lots of reasons to be in this segment of the educational market. Tutor is taking advantage of that niche demand by providing online tutoring services for students. Tutor has learned the value of launching an online business in a lucrative niche market!
The following companies offer e-newsletters and other online resources that track trends and future niches to help get you started carving a nook for yourself: