Why going niche is the best choice for a small business offering

Entrepreneur Chloe Thomas discusses why budding entrepreneurs should focus on a particular area in which to sell.

For any e-commerce business the challenge is to get traffic to your website that wants to buy the products you’ve put up for sale.

Most businesses focus purely on the marketing side of the business to do this; start with lots of marketing to encourage traffic through to the website, and then tweak the marketing so it only drives the traffic that wants your products. But what if your products could help you bring in the right sort of traffic?

Your products can be the point of difference that attracts customers to your business, and keeps them coming back to you to buy. But to do that you need a focused (or niche) product range.

What is a niche product range?

A niche product range means having one website to sell one type of product. We’re not talking ‘electricals’, we’re talking MP3 players, or ipod accessories; we’re not talking ‘homewares’, we’re talking tea towels, or mugs, or chopping boards. It could be anything – but just that one thing via the one website.

Think of the product range of an e-commerce business as a long line – at one end are the niche options, at the other are department stores (the likes of Amazon and eBay). To build your business quicker and faster you want to be at the niche end.

Why is niche powerful?

To be successful (except at the niche end) you need either to have a very strong brand, or a massive customer base. Most e-commerce businesses don’t have that, or have the budget to create it.

So go niche!

Being niche will benefit your business in a number of ways:

  • Makes it easy for customers to understand your business – if they understand you they’ll remember you, recommend you, and come back again
  • Makes it easy for you to build great internal skills in buying that product type
  • Spreads your cash less far, if you only stock X then you don’t have to fund so many product lines
  • Makes your marketing easier – one message, consistently
  • Makes it easier to build up lots of content on your website – blogs, images etc. are all of a similar topic
  • PR is simple because you can easily come to be seen as the experts in your product area
  • Sometimes it also streamlines the pick and pack operations – similar sized and weighted products are really easy!

In fact it’s just like choosing to focus and be niche in any area of our lives. The top chef’s specialise in one type of food; Rick Stein is known for fish, not for fish, and vegetables, and beef and desserts. We go to university to learn about one subject, and quickly specialise within that one subject – if we went to try and learn about it all we’d be there for decades.

Having a niche product range will enable you to grow faster, and stronger, and more profitably because it makes every area of your business simpler.

But niche sounds small! 

Yes, it can be small, but it doesn’t have to be.

  • If you choose the right niche, then you’ll have lots of sales. Think of H Samuel, or Jones shoe shops.
  • The internet enables you to reach buyers globally, so if in your country there isn’t ‘enough’ demand then start shipping internationally
  • Who said you had to have one website? Yes, you should focus on one product range on one website – but you can have multiple websites one for each niche – look at World Stores, almost 100 different websites each specialising in one product area, from garden sheds to leather beds.

You do need to do your research before going into your chosen niche to make sure there’s enough demand there to make your business viable.

Again, accurately researching one product range is a lot easier than trying to research a whole selection of them. Researching the jewellery market is much easier than fashion in general.

If you’re going to go niche (or even if you’re not) you should edit the products you choose to stock to make it easy for your customers to select and buy them. Have a clear navigation structure on your website, select a basic, better, and best of each thing – and make it easy for the customer to understand their options and why they should choose each. Consumers really appreciate being helped to find the right option.

Your decision on where to be on the product range scale should influence everything in your business – it’s a core part of your strategy.

Small online retailers can compete using niche products

Small businesses in the UK can compete with larger firms by offering niche products or a specialist service.

That is the view of the British Retail Consortium (BRC), whose spokesperson Richard Dodd says that online retailing is a particular opportunity for small firms to expand their range of services and become more competitive.

Mr Dodd says that online retailing is a viable option for small retailers: ‘Smaller retailers – those that are doing well – are those that recognise that they can’t compete with the larger retailers in terms of price; but they can compete in terms of the kind of goods they sell.’

They therefore need to identify ‘niche markets that aren’t being met by big retailers’, he says, noting that service is also important.

Related: Finding the right niche for your small business

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