Some businesses may look fantastic on a blueprint, but not in terms of profitability. To succeed in a niche market business, it’s necessary to choose a niche market that promises to generate profits. You can have several ideas in mind. But are they lucrative? It’s time to Double-check the foundation of your thoughts.
Before you proceed, you should know what a niche market is. So, understand what it is.
It is a noticeable smaller portion of a broader market. One more thing, that section represents an audience with specific needs or preferences — for example, backpacks for stylish women representing a segment in women’s shopping department.
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Choosing an ideal niche market
You need to understand the characteristics of a total niche market. For that, it’s necessary to be able to recognise a type of business that fits the below criteria.
Here is a quick break down of the main components of a niche market. These require an in-depth analysis;
- Niche market – marketplace – Do you know the environment, as well as its atmosphere? You’ve got to prepare if it is new territory to you.
- The targeted audience of an ideal niche market – can you describe your audience?
- A perfect niche market product – what kind of product is considered suitable for this type of market?
- An Ideal niche market supplier – Do you have the right qualities to provide proper solutions?
- Niche market competition – how stiff is the game?
Without wasting your time, here is a summarised description of each of the above.
The targeted audience of a niche market
That is a tribe of individuals with specific interests and demands. Their buying patterns are also similar.
Characteristics of an ideal targeted audience of a niche market
- The suitable audience would consist of firm believers in their habits and preferences. Whether resulting from their lifestyle choices or designed by nature, its irrelevant.
- They would rather sacrifice other things than forego their needs or preferential rights. In other words, their interests take priority.
- Due to their unfamiliar needs and demands, they could be easily misunderstood by those who do not represent their pride. For that reason, they can be loners.
- It may not be easy to sway them into buying an alternative product that does not represent their satisfaction.
Do such people exist? Perhaps you already know someone, it could be you representing your interests, passion, hobbies, or beliefs.
– You may recognise them in significant numbers, but not view them as a targeted audience that could constitute a niche market. Such consumers may be spotted independently and in remote situations.
– In rare occasions, you may find them in smaller numbers during social gatherings, or in places, they usually hang out. Sometimes they can be brought together by their needs and demands of the pride they represent, on specific events.
– Mainly found on designer platforms that consist of like-minded people. On social platforms, they tend to like or partake in discussions of specific groups that represent their pride.
– They sometimes do that to find solutions to their problems through crowdsourcing. Such consumers favour relying on search engines to find answers to meet their needs and demands.
Why should you consider such an audience ideal for a niche market business?
- Because they are usually spotted in isolation offline, those who look for business opportunities tend to ignore their needs and demands. Don’t you think they could represent a sizable audience of a niche market? Especially when viewed in significant numbers?
- Due to the nature of its kind, this type of audience usually battles to find ideal products. And once they do, they can soon become loyal customers to secure their needs and demands. That alone is a benefit to any business. But don’t take my word for it. Research your niche market, keep up with the trends and provide good quality products and services to keep your customers.
Niche market products
They are products intended to solve a specific problem or to satisfy a particular interest. For example, t-shirts for golf players.
Characteristics of an ideal niche market product
- Excellent niche market products are usually unique, specialised and highly customisable. Of course, to align with unfamiliar demands of the targeted audience.
- Like any product that belongs to any niche, they may consist of necessities and luxuries. Irrespective of whether a niche market resulted from a lifestyle choice or as designed by nature. So, it would be best if you researched to be able to differentiate the two.
- An ideal niche market product will compel a targeted consumer to search for it online should a need arise.
- Most importantly, a sound customer may have no self-inflicted conflicts or issues towards buying the product online.
Do you think such products exist? Think harder.
Such products are not easily accessible offline. Usually, due to infrequent demands. And one must travel miles to get to the nearest provider. If there happen to be any available in a nearby area, stock levels are sometimes kept at minimal to avoid overstocking. As for services, consultation reservations are essential to secure a slot.
Transactions of such products usually take place through referrals, sometimes via recommendations. But loyal customers know where to find them directly.
Side note: If you have previously purchased anything online, you could relate to this. If not, keep searching until you get to that point.
Why are such products ideal for a niche market business – in terms of profits?
- They tend to have higher profit margins. Most likely, due to scarcity. And providers favour adding higher mark-ups to compensate all the efforts they put during customisation and specialisation processes.
- If a buyer can travel long distances to obtain the product, that could mean they could purchase wherever they find it, even at an additional cost.
- More importantly, it could signify that the supplier may succeed in introducing a niche market business online to provide to the minority in various locations. That way, a supplier may attract volumes of targeted audience in different areas. Such consumers can go to any lengths to find products they want anywhere, even if it means importing. – that’s a big deal for someone who is getting by to operate on a small scale.
- Products that drive consumers to use the search engines and make purchases online willingly are an excellent choice. It matters the most to online entrepreneurs during this era marked by fast-developing technologies. – as you operate online, you easily monitor consumers’ buying patterns using advanced technology systems, and quickly counter your shortcomings.
Niche market suppliers
The providers of niche market products do NOT thrive to serve the entire niche. They provide solutions for a sub-niche and its specific audience.
Characteristics of an Ideal Supplier for a niche market product
- An ideal supplier can be a member of a targeted audience. People who usually start as custom designers of what they like, but end up serving others too.
- They range from handymen, DIY experts, all the way up to well-known industry gurus who became leading providers in the industry.
- Although this does not exclude anyone with relevant skills, experience, or expertise, those who belong to the pride may stand a better chance (in my opinion).
Do you think you have it in you to leverage your strange ways to feed your pride?
Due to the size of the targeted audience and other factors, suppliers often locate themselves in secluded areas of a marketplace.
Sometimes in places that are unfamiliar to the public’s knowledge, but close to their targeted audience.
If not close to their customers, like any supplier, their choice of location is also strategic; they choose sites they consider central, which could be distant for some of their customers.
- Suppliers of a niche market are easily accessible online, although situated in various locations in different parts of the world. They are reachable in multiple ways; direct URLs to their websites, through search engines, or reveal themselves by advertising or social shares in various channels.
- Those who do not have websites rely on social platforms for advertising their products.
- Site owners who do not promote, take advantage of the online habits of their targeted audience to avail themselves. That is, they use targeted search terms or search phrases (keywords) on their websites to draw the audience;- a free method to attract customers to a website via organic searches.
How does this benefit you if you want to enter the market as a supplier?
- Anyone who can leverage their unfamiliar needs and preferences to supply for their pride does not need to hire someone to research a market that reflects themselves, yourself included. -If you have what it takes – could be a cost-saving for you.
- Businesses that develop from interests or passion tend to flourish; operating that kind of business may not feel like a burden to anyone. – That could minimise wastage in production as you’ll be more focused on doing what you dedicate to do.
- Suppliers who belong to the targeted audience can capitalise on their experience to beat their counterparts in the competition. – that could mean higher turnover resulting from a larger market share.
- If your products are unique and good enough, you could easily attract a larger audience from various parts of the world online. As a result, you can grow your network, become an international supplier, and increase sales volumes. – Enjoy the benefits of operating on a larger scale.
- Given various ways to reach your targeted audience, you could choose the most cost-effective means to increase sales volumes and reduce advertising costs.
- One more thing, since the targeted audience of a niche market, tends to rely on search engines to find solutions, it makes researching a niche market online a lot easier, especially with the aid of advanced keyword research tools.
Niche market Competition
Consumers are continually getting involved online to find new ideas and more exciting products. A supplier who is rooted in operating a niche market business offline; this may not be the right time to retreat going online.
Consumers have resorted to pouring their hearts out to the internet. Sometimes on things they cannot confide in anyone. It is evident from the things they search for online that could result in niche markets. Below are a few examples of some things people search for, picked by google instant;
As a result, more niche markets, products, and suppliers get introduced online daily.
For that reason, It may not be easy to measure the competition online without using advanced online tracking tools.
Determining niche market competition online;
Note: You need to be flexible and use alternative search phrases where applicable, just as you would when searching for things online.
1) The manual approach
When you enter a search phrase on search engines, Google, for example, generated search results retains few browse through pages, sometimes nothing comes up. That is one way to size a competition; by noting the number of pages on your search results, and perhaps counting the websites competing for that search term.
The downside of using this manual technique
Your manual technique could produce inaccurate results in many ways. But most importantly, you may not know the number of people who use the same search term or search phrase to find the product. For that reason, you may not be able to accurately measure the competition, let alone determining the feasibility of your idea.
2) Using online tools – can you determine the feasibility and profitability of a business idea?
Using an advanced keyword research tool, Jaaxy for example, you can obtain the key figures you need to;
- Determine the feasibility of your business idea.
- Measure the intensity of the competition in a niche market.
- Estimate the profitability of your business ideas.
A tool like Jaaxy will;
1. Show you the number of websites competing for a particular search phrase in a matter of seconds.
2. Give you an estimated amount of monthly organic web traffic to expect on your site.
3. Show you the intensity of the competition.
As shown below: – Niche market ideas for people with style.
A keyword search tool like Jaaxy will help you avoid venturing into highly competitive niche market businesses unintentionally. Something that could prove disastrous for a startup.
The profitability of a business idea
To select a profitable niche requires you to have estimate income and expenditure figures that help determine profitability. With only a business idea and no financial records, the least you can do is to find the key statistics you need to estimate profits. And you can obtain those figures if you use an advanced keyword research tool as I indicated above. Even with that, you cannot be certain the niche you will choose will be profitable. It is similar to trying to pick a sweet apple in the market without tasting it. You can only rely on the characteristics to identify (hopefully) the right one then work it out.
Many things are taken into account when determining the profitability of a business, including those elements that are individual to you. Such factors include your pricing strategies, your ability to manage company expenses, your management style, to mention a few. In other words, this guide only helps you to choose a niche market that has the potential of generating sustainable income. The rest is up to you to make the right decisions.
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