There's one question every new entrepreneur has asked themselves at the beginning of their very first marketing venture, and that question has been “do I market to a small niche, or do I try to appeal to a larger, broader audience?”
The question is valid: will you make more profits selling to a smaller audience, or by marketing to a broader group of buyers?
The simple answer to this question is that yes: it is far more profitable to start narrow, and market to a larger audience as you grow.
Specialization is important to setting your brand apart from the others. Your customers must have a reason to purchase your product over the product of another brand, making it important that you implement some factor that sets you apart from the rest. This can be more effectively achieved with niche marketing, as opposed to large-scale selling.
What exactly is niche marketing?
Niche marketing is the practice of selling products with a small, yet defined audience in order to practice good selling habits in a smaller field. Essentially, the idea is that because there are fewer sellers in the niches, it is easier for small sellers to make a name for themselves, and create a product that truly stands above their competitors’.
In addition, niche marketing is considerably less expensive than targeting to a broader audience, and your customers will be more loyal as a result of your exclusivity. If you sell a product that is in demand, and cannot be found anywhere else, you will begin to see a higher number of returning customers, as well as new referrals who heard about the product from other buyers. This is harder to achieve with a broader audience in mind, as there are more sellers to compete with in order to get those referrals.
- The product being sold must be special, and must not be available anywhere else online or in stores. If it can be found elsewhere, it should be at a more affordable price, or have something special about it that makes it worth the purchase.
- Niche sellers should also be focused on building a story behind their brand, as many buyers the sellers are interested in buying not only a product, but a lifestyle.They want to feel like they belong to a special group, and selling exclusive, purposeful products is a great way to instill this feeling in buyers.
The first big idea behind starting a business in niche is determining exactly which kinds of customers you would like to appeal to. As stated previously, you are selling more than a product, you are selling a lifestyle, and therefore it's very important to understand your customers before you even determine what you are selling.
After you have identified your perfect customer, it's time to begin drafting ideas for what you would like to sell to those customers. Imagine these customers and imagine what you believe they would like to buy. Use these ideas to inspire the products you will be selling on your site.
Once you have determined your exact niche, you can begin to determine exactly which products you would like to sell. It's important to sell products that will interest a large enough audience that will be profitable, but that are unique, and have something that set them apart from their competitors.
In addition to selling a unique product, you must also have a unique selling proposition that sets your business apart from others selling similar products at a similar price. These propositions can include free shipping, a free gift, or a VIP reward system, as long as it is something special to set this purchase apart from others at competing sites.
Essentially, the idea is to start off small, and grow as you feel comfortable. By attracting a smaller group of buyers in the beginning, you can begin to set yourself apart from the rest early, and can plan for expansion after you have built a trusted brand.