Like it or not, there are only a few iron-clad ways in which you can start and operate a successful online business. Sure, there are literally countless ways you can go about it; but we’re talking about working formulas here.
Most businesses fail because people neglect to follow the necessary steps or to take the time needed to build up their respective business. One of the most important aspects of any Internet business is the niche market.
Niche markets are cost-effective and will always improve your conversion rates. You’ll receive more traffic from your specified market, and thus more visitors are more likely to purchase your products. But you still need to know if your market is viable.
One example of a great niche market is the diet soda market within the soft drink industry. The beverage market is huge, as you can imagine, but the niche that prefers diet sodas is pretty specific. In order to be successful in your business venture, this is the type of market you will have to discover and find out if it’s viable enough for you, or if you should tap into a broader market.
One of the first market analysis tools you can use is to study your competition. Let’s say that you only have about three competitors in your chosen market. Why is this? Could it be that the market isn’t that large, or is it that your competition basically has the market in a chokehold and no one else can wiggle their way in?
If it’s the latter, then you will need to revise your strategy and preferably go with another idea. There’s really no way you can beat down a giant of the industry as the proverbial little guy. Luckily, market analysis taught you pre-emptively that this market wasn’t viable, so you saved a lot of heartache.
You also want to start comparing prices. If you find that it is a market you can compete in, you may want to think about offering your products at a lower rate. This will instantly draw some recognition and you’ll grab the “penny-pinchers” from an already developed niche market.
Above all else, you will need to analyse the customers. Are they loyal to any particular brand or do they purchase products in their respective niche? For example, with the diet soda scenario: are they purchasing only diet Coke, or any diet sodas?
This makes a huge difference. If they’re loyal to a brand, then they’re not viable for you. But if they’re only loyal to a niche, then you can sway them to your side with some creativity and patience.
In order to get a read on your customers, you will have to do a fair amount of research. It’s all worth it, however, as you’ll find out exactly what they buy, when they buy it, and how much of it they like to buy. You can find this info through a number of different papers, news stories, etc.
The last factor to analyse in your market niche is the trendy factor. What’s hot and what’s not? You will need to define the part of the market that depends on trends (a fad) against long-term potential. Remember to always keep up with industry news, subscribe to various newsletters and report, and put in the time to do the research.