How to start with a niche market to build a business from scratch

Build a business from scratch

According to Amazon founder Jeff Bezos, building an online store that sold "all the products of the world" was always his big goal.

However, Bezos knew that this was impossible without first starting small and by defining a structured market niche.

He to learn about a specific audience that he would cater to, so he decided to start selling books online and little by little he was defining other segments, solving other needs, and as a consequence, turning Amazon into a successful, innovative and creative company.

In this article we will explain what is a niche market, the benefits of knowing and understanding it, how to identify it and some examples of niches so that you can be inspired by the creation of your own company and digital brand.

niche market

Table of Contents

  1. What is a niche market?
  2. Benefits of attacking your market niches
  3. How to identify a niche market?
  4. Examples of niches

What is a niche market

The niche markets are groups of people who share similar characteristics and needs.

When your company or brand knows the specific needs of that segment of people, you can offer products and/or services that exactly cover their needs and solve problems.

By addressing the needs of that specific group, you will be focusing on solutions tailored to your niche that hardly any other competitor will be solving.

It is important to keep in mind that a niche market is finite and large competitors only seek to sell products in markets that can grow their business substantially.

That's why starting off with a small niche market may be the best strategy; "It's better to be a big fish in a small fish tank than a small fish in the ocean."

Fiona Humberstone, recognized brand consultant in England and author of the book Brand Brilliance: Elevate your brand, enchant your audience, argues that a niche is "that sweet spot in the market that only you can only own".

Benefits of attacking your market niches

By having your segment well defined, you can charge better prices: when your group of individuals is clear, they will be willing to pay more for products or services that focus on their needs.

At first, Amazon solved a big problem for its first users. There were many readers who were looking for a specific book in many different bookstores because there was no centralized place to check the stock of these types of products or where to buy directly.

Amazon, by solving this problem, charged the same or even more expensive than traditional bookstores, also charging for the shipping of the products. The first users were willing to pay more because it was a solution specifically created for them, to solve their specific problem.

Large companies are interested in the segments that give them most of their income: for many, the main fear of starting a store or any other online business is related to the competition and the ability to take them out of the market at any time.

If you are focused on a specific niche and you execute it well, it is very unlikely that a big competitor will try to steal your business, so do not worry.

This is unlikely for two reasons, the first because large competing companies see these small niches as market segments that are not of interest due to their size, as they mobilize their processes to sell to a niche that will not change their final results. substantially does not make sense to them.

A big reason is also because they will not be able to offer a personalized service like the one you can offer, so even if they try to get into your market niche, your loyal customers will notice that the service offered by the competition is widespread and not as customized as they need.

Marketing and communication are more effective: by knowing perfectly the initial niche you will be selling to, it will allow you to create a detailed customer profile that will guide your marketing decisions in general, positioning, brand, communication channels, prices, among others.

The niche allows you to create effective sales strategies: when it comes to going out to look for clients, if you are not clear exactly what type of client you are looking for, you will lose too much time, touching doors that will never open.

Here we are specifically looking for those people whose message resonates and interests them. Investing time, money and effort in people who do not meet the profile of your ideal client, is too expensive. Too much effort for so few results.

So, instead of trying to reach thousands or hundreds of thousands of potential customers, focus on a much smaller group, with particular needs for which your product / service is just what you need.

If you have a blog, it is easier to create content: developing content is key in e-commerce, it is one of the most effective ways to attract visitors with purchase intention at a low cost.

Whether they are articles for your blog or any other means to put yourself in front of your niche, it will be much simpler and more effective if you have in mind specifically the profile of the person that is part of your niche market.

You must know what exactly interests them and what are the challenges they have, this is the essence to generate any type of attractive and relevant content for your customers.

The sales conversion rate is higher: many online stores focus on their main metric; the number of visitors they receive daily or monthly. This is one of the so-called "vanity metrics" because although thousands of users come to your store and it looks great, it does not help if none of these visitors do not generate any sales.

Having a well-defined niche will attract visitors to your store with real purchase intention, as they go not only because of the variety of products you offer, but because the solution you offer is designed for them.

By knowing your niche you can offer experiential and sensory communication: Juan Carlos Alcaide, member of the board of directors of the Marketing Association of Spain, assures that brands are currently focusing on the emotions and experiences of customers when buying products or services.

Therefore, if you know the tastes, needs and sensory preferences of your niche, as a result, you will have a clearer idea of ​​what kind of experiential strategies to use to stimulate them at the time of purchase.

Remember that "experiences create a network of associations in the mind of the consumer and have the consequence of differentiating one brand from the rest"

How to identify a niche market?

In the first instance, to know your niche it will be necessary to carry out a market study. According to Sharlene Nagy, professor of sociology at Boston University in Massachusetts, qualitative and quantitative methods will provide you with information on a social problem.

Applied to marketing and knowledge of niche markets, these methods are very useful because they allow you to have a clear picture of what the problems are and therefore, the needs of your particular segment.

Qualitative Methods

Deep interview, better known as "In-Depth Interview": when interviewing one or more individuals you can have a starting point for your research. Each of them has valuable and unique information about current problems and needs.

For example, if your brand specializes in offering instruments for professional musicians, the most convenient thing is that you interview a guitarist, pianist, singer, etc., with several years of experience.

Surely they will have important information about what kind of instruments are needed in the market, what materials are not being used, what are the shortcomings of the current instruments (here you can analyze your competence), what they would like to see in the market, etc.

This will give you the bases to build your brand with a clear niche market. Remember that an interview can be done in person, via Skype or by phone. We recommend that it be in person since you start generating genuine links with possible future customers.

Focus group research, better known as "Focus Group Research": in this method multiple participants are interviewed at the same time. Focus groups have an advantage and that can help you discover in an "inductive way what are the themes, ideas and concerns of a particular issue of multiple participants at once".

A clear hypothetical example is the owner of a florist. He wants to find out what needs flower-loving buyers have. By doing a "Focus Group" he realizes that customers are tired of buying arrangements with the same flowers over and over again.

According to those customers, the variety of flower arrangements is very limited. That is why, this owner puts himself in the task of looking for the rarest and exotic flowers in the market place. He realizes that many flowers are not being used and that many of them are not known.

Here not only the brand has its clear niche market and is creating solutions according to the needs of its customers, but it is also opening differentiating elements that will make your brand stand out.

Quantitative methods

Survey: this method has multiple advantages. As a researcher you will have access to a wide range of participants, to large amounts of data and with technological advances, you can do it virtually without spending a piece of paper (ecological validity).

It is important that if you decide to do a survey you should focus on the type of questions you want to ask. The success of a survey is the variety and clarity of your questions. Otherwise, you may collect surface data.

For example, if you are an entrepreneur who wants to set up a clothing store, but you do not know what type of clothing you want to offer; sportswear, clothes for special events, informal clothes, formal, for children, for mothers, etc., you can start by writing questions that focus on knowing what kind of clothes are not on the market.

Maybe women with different type of sizes, do not feel identified with what the market offers and sometimes find it difficult to find clothes of different sizes.

Another niche may be women who are close to becoming mothers, have you ever wondered if there is a variety of clothing available for pregnant women? Well, those are questions that you have to analyze before you do your survey.

Some examples of niches

In Colombia, people over 60 years of age

According to the figures of the DANE (Colombia), in 2016 almost 5.2 million people will be at least 60 years of age. This is a group with many needs and characteristics that it makes them an important segment, since in Colombia a large number of people in this segment have influence in the decision making of products for their grandchildren, since many are actively involved in their upbringing. Anyone willing to take the opportunity?

Left-handed Store

Left-handers represent 15% of the world's population so it makes sense to take them as an interesting market segment, as they have well-defined problems and requirements. For example, Tienda Zurdos online store in Argentina, specializes in solving the problem of access to left-handed products in the local market.

Yoga lovers

In recent years, in the United States, Canada and Latin America, yoga has become a frequent practice among people of different ages. According to the Journal of Alternative and Complementary Medicine, many studies show that yoga benefits physical and mental health.

This makes us think that more and more people enjoy this practice. As an entrepreneur, you might ask yourself what are the current needs of these practitioners and what kind of services or products, additional to those that already exist in the market, are needed. Is there a brand in your country specialized in Yoga practitioners, for example?

Natural cosmetics

According to a recent article published by The Guardian, in a study conducted by the EWG (Environmental Working Group), women apply a fiance of 168 chemicals per day. Although some of these chemicals are not harmful, some researchers show that some are related to skin cancer and other diseases.

This information makes clear that there is an evident need to find personal care and make-up brands on the market that only use natural, organic ingredients or that are harmless to health. Would you like to have your own line of personal care or makeup? Without a doubt, this is an important market niche today.

International students

ShareAmerica, platform specialized in sharing articles to "encourage dialogue and conversation on important issues such as democracy, freedom of expression, innovation, entrepreneurship, education and the role of civil society", published that almost 820,000 international students for 2013 they were studying in the United States.

Additionally, according to the Association of International Educators NAFSA this figure would continue to increase during the following years.

Daniel Pinilla, a doctoral student at the University of North Texas, argues that students from Latin America with a desire to study in countries such as the United States, Canada or Europe, do not have enough knowledge to make a successful application and they are not familiar with the university system of these countries either.

So, if you are an entrepreneur who wants to set up an online business, how about a platform that offers online courses and consultancies about the processes to study abroad? Keep in mind that both in this segment and in education, the possibilities of new ideas of services or products are varied.


Focusing on niche markets is one of the most effective strategies for creating your brand, especially when it comes to a digital business. Having your segment clear will allow you to start with a type of limited and defined client that will help your company optimize all its processes and start with the right foot.

Finally, remember that some of the mentioned examples of niches are just 1% of all those that exist. Investigate, be creative, curious and ask when defining your idea. Current consumers who see differentiating elements in brands, do not hesitate to choose them again and again.