06Mar

While many ecommerce entrepreneurs dream of creating a mega brand store like Walmart, Amazon or QVC, starting out as a niche store can sometimes be the most-effective path to get you there. In this article, you’ll learn eight reasons to start a niche store.

Start Focused, Expand Later

According to Entrepreneur, when Jeff Bezos first launched Amazon, he only sold books. He recognized that while bookstores could only hold a few hundred books due to their small retail space, with a virtual store the possibilities were endless. He dreamed of selling millions of books online. Keep in mind this was back in 1995 before most people even had internet.

Bezos’ eventually expanded into other categories like CD’s. However, during a holiday promotion he decided to temporarily sell toys and games. It’s clear that Bezos’ was actually testing the market to determine whether or not Amazon should expand into even more categories. Eventually, Amazon became the biggest marketplace where consumers can buy virtually everything.

The moral of the story is that you’re not stuck to the niche you start in. You can always expand into other categories. The benefit of this strategy is that it allows you to have tunnel vision on your store rather than bouncing from one idea to the next. Many business’ fail because their focus isn’t clear. When building your first store, avoid having a brand name that’ll limit you. For example, Amazon despite starting out as a bookstore, didn’t have ‘books’ or ‘bookstore’ in its domain. This allowed Amazon to expand into other categories easily.

Amazon.com CEO Jeff Bezos. Photo: Peter Foley/Bloomberg)


Less Competition

Sam Walton, founder of Walmart, once said ‘If everybody is doing it one way, there’s a good chance you can find your niche by going exactly in the opposite direction.’ Specific niches typically have less competition than general ones. According to his bio, Sam Walton created Walmart because he saw the need for a discount retail store for rural areas. He went against what everyone else was doing at that time.

Many think that a niche is a product category. However, in the case of Walmart, their niche is focused on providing the best price to everyone – even those in rural areas. While it can be risky to be in a less competitive niche, if success is achieved, you can potentially achieve greater rewards.

Also, it’s a lot less competitive to have a store with crossfit products than trying to cater to everyone with a general fitness store. It’s better to be number one in crossfit than number 100,000 in fitness.

Photo : Daniel Acker/Bloomberg


More Likely to Succeed

Billionaire Sara Blakely, founder of Spanx, once said, ‘I was trying to convince all these men to try to make a product that they didn’t even wear! Or if they did wear them, they were not admitting it! There was the problem right there. No wonder their hosiery was so uncomfortable.’ Her Spanx brand made her the youngest self-made female billionaire. Her niche focus was hosiery with the feet cut out. Notably, she also differentiated herself by creating products for women by women. Today, Spanx’s niche focus is on figure-flattering undergarments such as maternity hosiery, leggings and bras.

It’s a lot easier to start up a niche store rather than trying to build a mega-empire your first try. With a niche store, you have a stronger understanding of what type of products your target audience would be interested because you can clearly define your target audience. Sometimes, when entrepreneurs try to create a store with a wide range of products from varying categories like dog products and makeup, it falls flat. You can always expand into other categories in the future. However, starting your store with a niche focus can give you better chances of success.

Photo: Rob Brinson


Gain a Reputation

In 1969, Sephora founder Dominique Mandonnaud found his niche by reinventing the way perfume and beauty products are sold. At the time, shoppers had to buy products without knowing how it would look or smell. Mandonnaud allowed customers in his stores to try products on and to smell different perfumes which helped grow Sephora into a popular store. Even their online store allows customers to get access to samples. When a customer makes minimum purchases, she’s able to choose from free samples. If a customer earns a certain number of points, she can get free samples. On her birthday, she can get free samples as a birthday gift. The try before you buy model in the beauty niche differentiated Sephora from other brands.

Having a reputation or being ‘known for’ a particular niche can greatly benefit your store. For example, if someone asked for a recommendation on where to buy a certain foundation, someone might recommend Sephora because it allows customers to try on beauty products.

Also, you improve your odds of getting return customers. When a customer understands what type of products or experience you sell, they’ll be more likely to keep returning for it.

Photo: Dexigner


Marketing Becomes Simplified

When Steve Jobs was working at Apple, he differentiated his brand from Microsoft with his product design. Both Steve Jobs and Bill Gates were selling computers and laptops. However, Apple’s products were more visually appealing. It was a simple but effective way to stand out. Clean, beautiful computer-related products and accessories was Apple’s niche.

Being able to define your niche clearly makes marketing your brand easier. It’s easier to create a marketing campaign when you know your unique selling proposition. It’s easier to market to your customers when you understand how you bring them value. When you understand your niche, building out a content strategy, social media following or creating an ad becomes easier.

Photo: The Film Stage


Easier to Attract an Audience

It’s easier to attract an audience when running a niche store than trying to cater to everyone. You’ll be able to create highly targeted ads because you’ll easily understand the demographics. You’ll know what age group, gender or interests to target. When you position your brand, create a mission statement or write your unique selling proposition, you’ll be able to write it clearly in one sentence.

Also, you’ll attract an audience because you know how to create content specifically for them. It’ll be easy to provide value because of your singular focus. When creating content, you’ll write content with a specific type of person in mind. Often times, top brands write customer profiles describing and personifying who their audience is. For example, Amanda, 35, stay-at-home mom, likes playing tennis and cooking.

The combination of your niche products with unique content catered to your store visitors will help increase the odds of your customer returning. Customers will keep coming back to your store because they love the style of your products, your product pricing, or that they can find products related to their passion all in one place.

Photo: Walmart


Niche Offers Flexibility

Like mentioned earlier in this article, you’re not limited to a product category. Having a niche store offers flexibility. Your niche might be the style of your clothing. It might be the way you price products. The way your clothing fits or if your store targets a certain demographic, that could be your niche.

Black Milk Clothing’s niche is women’s clothing for gamers, action fans and even cosplayers. AliExpress’ niche is affordable products made in China. Amazon’s niche is ‘the everything store.’

Photo: BlackMilk


Easier to Rank in Search Engines

Ranking in search engines for niche keywords is much easier than ranking for general keywords. You’re more likely to rank for the keyword ‘running’ than ‘fitness.’

Furthermore, it’s also easier to rank for niche stores than if you’re trying to build a marketplace. With a niche store, you can use related keywords to rank organically for your niche. However, if you sell a wide assortment of products, you’d need to rank for a wider range of keywords which likely won’t be as specific as a niche store.

In addition, when creating a niche store, you also have a strong understanding of what type of content your audience would find valuable. For example, if you run an online ballet store, you might build out content related to ballet exercises, preparing for ballet recitals, and ballet costume ideas. However, if you run a general fitness store, you’ll be able to write content on a wider range of topics. Yet, most topics won’t be relevant for all readers.

Photo: Gardening

Are you thinking about starting a niche store? Let us know in the comments below!