Who’s Battling for Your Niche?

Merchants just coming online for the first time have hopefully dissuaded themselves from setting up their store to target all markets such “UltraGigaMegaCorp—we sell everything” or “AllNouns.com—books, videos, and anything with a UPC on it”. Merchants just starting out typically cannot offer the range of products and at a same or lower price point to match the giants of retail.

So how do you get an edge on the guys that seem to sell two of everything? Pick one section of one aisle of the big box stores and carry as many products in that specific category. In essence, find an underserved niche in the market, and be the one place to go for products in that niche.

So what’s a niche?

Niches are getting smaller and smaller these days. Pet clothing may have been a niche a few years ago, but now to find a niche you may need to specialize in pet costumes, dog sweaters, or high-end pet couture.

Advantages of niches

Going after a niche has several advantages:

• Potentially less competition than going against large retailers in crowded markets: obviously you don’t want to get so specialized in your niche that there are no customers willing to buy your products (Bedazzled Kashmir Monogrammed Sweaters for Chihuahuas may be an underserved niche but there may only be so many Chihuahua owners willing to dress their pooches in such finery). Cry out Chihuahua owners if I am wrong on this note.
• Shoppers likely to be passionate and engaged within a niche: If you serve a specific niche that is very targeted, it may be easier to target these buyers by posting to forums, buying ads in newsletters, or other forms of outreach. Groups tend to form around these specialized topics—perhaps one of the best uses of the Internet is in allowing and actively fostering such groups that may never reach critical mass if bounded by geography. Make it your mission for every group, mailing list, forum, or gathering of such communities to mention your store as the one-stop shop for that niche.
• Potentially easier to target with natural and sponsored search tactics: Since you are going after a niche, your keywords and key phrases can tend to be more specific, which may mean they are less competitive in terms of natural search ranking (and less costly for sponsored search ads.

Finding a niche

Luckily there are some tools available to help you research and find a niche, other than using search engines and checking the number of results against various queries. Here are a few to help you along the way:

• SEO Tools™—Keyword Difficulty Checker: Allows you to see the difficulty (expressed as a percentage) to rank in the first page of search results.
• NicheWatch.com: Allows you to perform a competitive analysis of the technical factors of the top sites for keywords and keyphrases so you can determine the changes to make to your own pages to outperform sites in terms of search engine optimization in your niche.

So get busy doing research to find your niche and soon you could find the next BIG idea in ecommerce starts with something quite small.

Paul Boisvert
Yahoo Small Business