By
Andre© Anthony
If you want to learn how effective Niche Marketing can be, I suggest you "don't" take the route I did.
Back in 1983 I started a company offering general Electronics Subcontract Assembly services to just about anyone who made Electronic products.
By 1985 my company was teetering on the brink of bankruptcy and I was perilously close to losing my home because of a large overdraft pledged against it.
Why did this happen?
Well Electronics Subcontract Assembly is a huge, highly competitive market place with lots of heavy hitters. Being a little naive at the time, I thought that my little three man company could carve out a big enough slice from such a huge market to make a very comfortable living - I was dead wrong.
We did get work, but only the jobs the big boys didn't want. The work was labour intensive and even with our tiny overhead we couldn't make enough profit to sustain the business adequately. We could never get the big, lucrative contracts because we weren't considered big enough to handle them.
By December '84 I was desperate. Sales for the previous four months had been abysmal and cashflow almost non-existent. My Bank Manager was on my back demanding that I reduce the business overdraft or he would call it in. My suppliers were baying at my door to be paid. As if that wasn't bad enough, during the first week of 1985 my biggest customer suspended production for six months on a games gizmo we were making for him.
Things were so bad I was seriously considering bankruptcy to get out from under this financial nightmare. Fortunately I'm a bit pig headed about giving in too easily so despite all the problems I hung on, and I'm glad I did because fortune suddenly smiled on me.
What happened?
A couple of weeks into 1985 a business acquaintance came to see us with a sample cable and asked if we could make 5 up for him. The cable was for an IBM PC. At the time I knew nothing about making cables and even less about PCs, but I had his sample to work from so I took the job.
When our now customer came to collect his finished order, he mentioned that there were a few other Dealers in the PC market who would probably be interested in having us supply them with these cables - he even gave us a mailing list.
I was more than a little sceptical, I have to admit, but I had nothing to lose so I went for it. I wrote a short, snappy sales letter, scraped together the money, mailed out to the 100+ dealers on the list and crossed my fingers.
48 hours later we had our first order for 10 cables, within 7 days we had 11 more orders for 10 cables each.
That one small mailing brought us an amazing 12% initial response - and it just kept going from there with week after week of repeat orders.
Pretty soon after that, my wife Maxine joined the business and set up a telephone sales desk and customer service system. By that time we were averaging about £1000 a week and that was from just the one cable type.
At that point I dumped the subcontract work and focussed on the cable business.
Once Maxine took over the sales function she immediately followed up with the companies who hadn't responded to our initial mailing. That brought in another 26 new customers. Within six months we were supplying most of the major Dealers and Distributors in the then burgeoning PC market and our cable sales had quadrupled.
Inside a year in this niche business we were selling thousands of computer cables of all descriptions, including highly lucrative custom formats, and we were being asked to provide advice on how to design cables for specific applications - we had arrived - we were now the acknowledged experts - customer loyalty rocketed and by 1988 our turnover reached £400,000+ with gross profits of 50% or more.
Now I'm the first to admit that luck played a hand in turning my company's fortunes around, but the experience taught me my most valuable lesson in business - you have to focus on a specific, under-served market niche if you want to be really successful in business.
I have applied this premise to four other businesses since then and, with one exception, all have been successful.
My advice? Find yourself a small, focused market niche (the Internet is full of them) where you can carve a reputation for yourself and become an expert in the field - like I did.
Niche and Grow Rich.
Copyright © 2005, Andre© Anthony Niche Market Know-How
Free Content for Your Ezine, Newsletter, Magazine and Web Site
You are welcome to publish this article in your electronic or print newsletter (opt-in publications only), or on your web site, provided my byline is included intact with all links active.
Andre© Anthony
Unless you've been living under an Internet rock, you've probably heard the buzz about Niche Marketing. Right now it's the hottest marketing topic online.
Is it a new concept?
Well on the Internet maybe, but if like me, you've been involved in direct response marketing in the 'Bricks and Mortar' world then it isn't - that's the way we've done things since time immemorial.
So what's this Niche Marketing thing all about?
If you have ever taken Marketing 101 then you'll have heard of the old marketing adage : "Find a need and fill it" - that's what "Niche Marketing" is all about. Finding a "focussed" group of people, with a specialized interest, eager to buy (The Niche) and promoting a suitable product or service to all those interested in buying it (Marketing).
Let me give you a few examples of these Niches :
| Recipes |
Dog Training |
Hand-poured Candles Gourmet Foods Gambling Mortgages Credit Cards Music Jewellery |
...... the list just goes on and on and these are just the main headings, there are niches within each of these niches ... Think of a subject and there's likely a niche market for it...
But the name of the game is to find a "tightly focussed" niche. The reason for this that if you target a general market the competition is fierce and it's hard, if not impossible, for the little guy to get a foothold.
When you narrow down the size of the market you eradicate most of the heavy hitters with bottomless advertising budgets, because these guys aren't interested in making a few thousand bucks a year from these tiny specialized markets , they're after millions from mass markets...
... And let's face it if you're a little guy you simply can't be everything to everybody, so you must pick a specific focus (Niche) for your business. For example don't target "Fishing", instead target "Fishing Baits" or "Fishing Lures" both of which have a much more specific focus...
...Get the idea?
Once you narrow down the size of the market you have an automatic advantage over larger companies. Here's why :
- You can quickly become an expert in your niche (if you're not already)
- It's easier to keep current with a narrowly focussed market niche
- You can respond faster to changes in the market
- You can build close relationships with key customers that will be hard to compete with
By now you're probably wondering about the mechanics of this niche marketing stuff. In a nutshell here's how it works :
- Find and research profitable niche markets
- Locate or develop suitable products/services to market
- Set up a web site to market the products/services
- Establish a marketing system that works for you
- Repeat the process over and over again with a different niche each time.
Imagine having a niche site producing one sale a day at say $20. That's $7300 a year - how many sites could you set up and run 10, 20 ....?
Before you get too excited, I have a word of caution for you :
Niche marketing is not a magic bullet. It isn't a matter of putting up a web site and then sitting back and waiting for the money to roll in - "build it and they will come" may have worked for Kevin Costner in Field of Dreams, but it doesn't work that way on the Internet - if you do that you'll be waiting a long time.
If you want a successful niche business, you have to work at it just like any other business - if you're prepared to put in the effort though the rewards can be significant.
About The Author
Andre© Anthony owns and operates Niche Market Know-How a resource for beginning Niche Marketers. Visit http://www.nichemarketknowhow.com today to find strategies, tips, tools, products and resources for effective niche product creation and marketing and get his Niche Market Know-how Mini Course : http://www.nichemarketknowhow.com/course.htm
