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    1. Sarah21 is offline

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      #1

      What are niche markets all about?

      Hi, I want to start up an internet based business. I have been reading whatever I could get my hands on as a part of my primary research.

      There seems to be a lot of emphasis on finding good niche markets. Can anyone tell me what niche markets are about? Why are they so important to an online marketer? And why do they seem to be so elusive?
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    2. RuchiM is offline

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      #2
      You are certainly starting on the right foot. When I first started my business, I didn’t bother reading anything or asking anyone. And I paid the price.

      Experience is a tough teacher. Good you are taking the smarter route and learning from other people’s experiences.

      Well, I am not a marketing expert, but as far as I know, niche marketing is all about narrowing your horizon and focusing.

      It is so important in the internet game because if you are like most people, going up against mega corporations isn’t a choice. Within the smaller business market, you can find your profitable space and that's where niche markets help!
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    3. Sarah21 is offline

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      #3
      Thanks for your encouragement and advice. To be honest though, I don’t quite understand this. A lot of websites talk about niche markets but they seem vague to me. I do not understand the concept of being small and yet being able to take business away from mega billion dollar organizations. Can you explain how and why it works?

      PS: I am just trying to be a good student. I appreciate that you have replied and I don’t mean to offend. Just trying to learn more.

    4. SuKim is offline

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      #4
      Hi Sarah, I am a consultant and have helped a lot of web based business find success in niche markets. Let me explain it for you. Niching works because of many reasons. Some of the most popular ones which anyone will tell you off-hand are:

      • Nichers know their customers better and can therefore provide better offerings than a larger company aiming for bigger mass market profits.

      • Nichers dominate their market because they understand it inside out, they themselves define it through a deep understanding of their customers's needs and adaptation of their products, and can therefore end up controlling their own niche, which means bigger profits.

      • Customers who get exactly what they want are willing to pay a premium for it.

      • Nichers avoid the 800lbs guerilla competitors who can end their existence, because the segment is too small and therefore uninteresting to the big player.

      This is a very basic explanation. In case you find this useful, do let me know.

    5. Thank you for this post:

      annamax_ (12 Mar 2013)

    6. Sarah21 is offline

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      #5
      Hi, thanks. It is definitely useful. Makes more sense now. If I have understood exactly what you meant, nichers are experts at their game. The game is carefully selected to be able to generate maximum profitability and avoid gaining competitor interest in the beginning. Later, even if you do gain interest, you are less vulnerable because your brand has been established. Like sneaking in and stealing away a small group of customers!

    7. RuchiM is offline

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      #6
      I am glad that you understand it better now. You see, large organizations are too large to be flexible. They tend to mass produce creating dissatisfied customers. This creates a need that can be exploited.

    8. SuKim is offline

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      #7
      The easiest association to explain the concept of niche markets is size. This is because people generally perceive smaller companies as niche markets. But we all know that “small” and “big” are relative words.

      A true niche market is defined by whether a distinctive offering is being provided. The world is now progressing from mass market to segments and, more recently, to niches.

    9. edsmith is offline

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      #8
      There are many who want to get into a niche but the competition can be fierce. I have seen a few start out at a reasonable scale and within a year or two they are over thrown. So how can a nicher keep their market (might be a better question to ask)?

    10. Euston is offline

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      #9
      To me a niche market can be achieved by quality as well as quantity. In the world I inhabit there is a market trader selling fruit - the only person for miles around - but it isn't worth eating. Does he have a niche product? I wouldn't buy it regardless.

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      #10

      Quote:

      Originally Posted by edsmith View Post
      There are many who want to get into a niche but the competition can be fierce. I have seen a few start out at a reasonable scale and within a year or two they are over thrown. So how can a nicher keep their market (might be a better question to ask)?
      It all starts at the beginning, when you define your niche. That's the most crucial moment in the life of your niche business, because it determines the course of your business for months / years / a lifetime. Get it wrong, and it can turn into a bottomless well. Get it right, and you can enjoy a profitable business that mirrors your personal interests.

      1. Brainstorm potential niches that match your personal interests and skills, and that you could be interested in making a business out of for the rest of your life.

      2. Identify a problem or unmatched need within each niche and evaluate the costs of fulfilling that need (not just the cost of producing / sourcing the product that satisfies the need, but also the cost of reaching the people that will want to buy your product to solve their problem). How can your interests and skills be beneficial to sourcing or developing a product or service that solves the problem?

      3. Once you have brainstormed a number of niche products, research each niche to evaluate the demand potential, and the level of competition.

      4. Pick the niche that offers you the best return (number of sales * profit per unit - sourcing, marketing, administrative costs). Test your option in the real world by sourcing or developing the product. Then collect sales data and feedback from customers. Update your niche product to reflect feedback, change in habits, competition, new developments.

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