Focus on a Niche: Factors to Consider

January 26, 2013 | By | Reply More

Small business, often plagued with a shortage of start-up funds, must use exceptional strategies to get the business running without draining much needed capital. Most especially if competing head-on with a big company is imminent.

Unless millions of dollars is readily available to launch the business, the only chance at winning against a big competitor is to focus on niche possibilities. Niche entails offering unique products or services to a few concentrated markets. It is a less risky strategy and provides the best opportunities for small businesses throughout any marketplace.

It is happening everywhere: small companies are folding up when the big guys start moving into their territories and flexing its muscles. Remember Meg Ryan and Tom Hank’s sappy film, “You’ve Got Mail?” Meg’s character owns a small bookstore that has been in their neighborhood since, well, time immemorial. Until Tom’s mammoth bookstore moves into the street, and forced Meg to close her business.

Niche marketing is the best strategy your small business can use when a large business moves into your market and territory. For example, let us say, you own an accounting service and a national accounting and auditing chain moves into your area. You may be better off changing your entire strategy and focusing on serving small businesses.

Your business stands a greater chance at success if you offer something different to a small group or segment of consumers that have unmet preferences. You must identify the target market and meet their needs with your product or service.

Instead of selling household decor, sell wall frames. Instead of selling spices and condiments, sell hot sauce. Instead of selling baby clothes, you focus on offering the best quality, widest range of selection and most affordable clothes for baby boys. When people think of buying clothes for their baby boys, they would first come to you.

niche marketing

The key is to focus, focus and focus until you become irresistible to your buyers. You stand a better chance at success, if you concentrate your entire business on one or few specific niches.

The drawback of niche marketing, though, is that you may have a smaller volume, which often results to higher operating costs. Nonetheless, the lessened competitions will more than make up for it.

If the market niche or niches you are considering have very small markets, you may want to retain some products and services that appeal to a wider range of customers but have exceptional product depth in a few niche areas.

Tony Roeder applied this strategy for (, the main distributor of Red Flyer toy wagons on the Internet. He knew that there is no way he can compete with the likes of and, which all carry Red Flyer wagons in their huge toy inventory. Instead, he decided to focus on Red Flyer wagons and offer the entire product line. While his big competitors carry only 3-4 models, he has the entire collection to please any avid Red Flyer wagon enthusiasts. The strategy paid off, and he now makes more than a million dollar a year in his online business.

To help you identify and meet the needs of your niche market, below are some things you need to consider:

1. Aim for a specific target and allocate resources just for that target.

When looking at a business to start, look for a highly targeted market. Cover only a small, but profitable, base of customers. You cannot be everything to all customers. Yet make sure that you have the best product or are the best service provider in that narrow market.

If you are looking at the home décor market in North America, think of an area that is currently not being serviced well. Maybe you can provide the market with rare, one-of-a-kind decorative items from far-flung countries like Uzbekistan, the Philippines, Thailand, etc — items that are not commonly found in shops like Pier 1 Imports or World Trade.

2. Talk to potential customers one at a time.

As soon as you have narrowed your target market, find a person that you think would be your ideal customer. Find a solution for that customer and then determine how others may be interested in that solution.

For exotic home decors, your customer probably is middle-to-upper class, who has traveled a lot and developed a taste for other cultures. Ask your potential customer what kind of products he or she would like to see; or if the customer would be interested in the type of product you are considering. Perhaps the customer may want one-of-a-kind framed art or conversational centerpieces that will not be in his or her neighbor’s house.

3. Do some market research to verify your findings.

Information is the key to a successful marketing strategy. Before launching your product, get hold of as much information as you can about your potential customers, costs of production, and competitors’ products.

Market research need not be expensive. You can do some informal talking with potential customers. You can browse through home decorating magazines to find out about other suppliers in the business. You can run a query on the search engines to determine how many other dot-coms serve the same market.

4. Find out the kind of product characteristics that your potential customers value.

Do they want high quality, low price, convenience features, reliability or any other product characteristics you are interested in learning about. If you are selling exotic home décor products, for example, what influences a customer: is it the price range, the history or context of a piece, texture, colors, design or functionality?

Keep in mind that no industry or type of business is an immediate gold mine. It depends on what is not being adequately supplied or services in a particular area. To succeed in your business, your goal is to identify a particular segment where you can fulfill an unsatisfied need.

Recommended Books on Niche Marketing:


Lyve Alexis Pleshette

Lyve Alexis Pleshette is a writer for She writes on various topics pertaining home businesses, from startup to managing a home-based business. For a step-by-step guide to starting a business, order the downloadable ebook “Checklist for Starting a Small Business” from

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Category: Niche Marketing

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