Choosing a carefully pinpointed niche market should be one of first steps that an internet business owner has to take. A very common way of describing a niche market is ‘a targeted group of individuals with very specific and similar needs or interests.’ These people engage in similar activities and hence they would most probably demand same goods or services to cater to their needs. Online businesses that drop ship their products to their customers would thrive by focusing on a specifically targeted niche market. In this article, I would focus on advantages a niche market can bring to an online Drop Ship business. This article also provides you with practical steps for you to select your niche market.
By focusing on a specific niche market, Drop Ship businesses gain an edge because they are like ‘monopolies’ for that particular niche. The ‘monopoly’ for that niche would be able to provide a much wider range of products and better services for that market, enabling it to dominate. Because there is a very large number of niche markets on internet, most Drop Ship businesses are able to survive and thrive online by selecting a niche that no major competitor is targeting, and directing their marketing efforts to their respective niches. With limited resources, a small Drop Ship business just starting out cannot hope to sell ‘mainstream’ products that are also supplied by huge competitors like Wal-Mart.
It is critical to first establish a market with an unfulfilled need and then develop products or services to meet these needs. Most online ventures fail by first selecting a good product, and then looking for market for that particular product. They fail when product’s demand is insufficient, or when product already has a strong competitor supplying to market.
The internet is not only medium where niche marketing dominates. In our corporate world, majority of successful companies also selects a niche market and develops products or services that cater to their specific niche. Microsoft develops software as operating systems and platforms for computers. Nike offers shoes and footwear targeted at sporting population. This illustrates importance of first selecting a niche market for your business to focus on.
There are a few simple stages in selection of a niche market:
1) Brainstorm for niche markets that are related to your area of interest or expertise. It is simply easier to succeed if you focus on an area that you are passionate about and have most expertise in. This way, along learning curve of starting an online business, frustrations that you face along way will be reduced because whatever you are doing feels more like fun instead of work.
2) Research market in detail. This involves producing a detailed profile of your market, including estimated demand for your products, products in niche likely to have highest demand, and where these prospects normally congregate online.
You can use free Overture search term suggestion tool to gauge market size for products you have in mind. It is available at http://inventory.overture.com/d/searchinventory/suggestion/. Simply type in product keywords and this tool can suggest more specific keywords, and also number of times this word has been searched over a period of time.
Chat rooms, forums and newsgroups are where your target market normally congregates online. By monitoring these discussion boards, you should be able to determine evolving needs of your target market, and what new product is likely to be in high demand soon. Forums can also be a good source of ideas for your products. Google Groups is a good place for you to start finding newsgroups or forums for your niche market. It is available at http://groups.google.com.
3) Select a niche market that has a need not currently being adequately met instead of targeting a niche whose need a competitor can fulfill very well. From newsgroups, discussion boards and forums, you can get valuable information about business opportunities. For example, if consumers voice out their dissatisfaction about any unfulfilled need, you can quickly find and offer any product as a new solution to their problem. This fills a ‘gap’ in market and your business is established.