Entrepreneurs generally take one of two paths when determining who they want their business to cater to: the mass market or a niche market. Whichever option you — our valued reader and savvy, aspiring business pioneer — choose will depend on factors like your offering's appeal, its utility, your experience, and personal bandwidth constraints.
If you try to appeal to the mass market, you're probably going to try to create multiple products or serve various industries — and becoming a leader in your space will be a particularly tall order.
Selling into a niche market gives you more flexibility to narrow your scope, structure your business around your passion, and sell to an audience you know well. In this post, you’ll learn about the benefits of niche markets, how to find your niche, and what to do after you identify an unmet need.
Table of Contents
- What is a niche market?
- Benefits of a Niche Market
- How to Find a Niche Market
- Niche Market Examples
- We asked entrepreneurs: “How did you find your niche? What tips do you have for newer entrepreneurs looking to identify and appeal to the right niche market?”
- Find Your Lane in a Niche Market
What is a niche market?
A niche market is a focused set of people or businesses who want to purchase a specific offering. Think of niche marketing as the act of specializing in what you provide.
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When your company offers specific products and services instead of a wide variety of offerings, you benefit by saving money and becoming more productive. You’ll also build a comparative advantage over your generalist competitors.
For example, in the pet industry, creating a business that sells dog collars is selling into a niche market. The same applies to cat sweaters and pet GPS trackers.
When companies decide to sell to a niche market, they attract more customers to their product or service. Let’s look at some benefits of operating in a niche market.
Benefits of a Niche Market
Whether you’re starting or scaling a business, niche marketing is an effective way to establish your brand positioning. Here are some other benefits that niche market entrepreneurs enjoy.
Effective Use of Marketing Resources
By focusing on a small audience, you can use your resources to find customers who align with your product. These people need your product the most and are most likely to convert.
Niche marketing also helps you save on your marketing and advertising budget. That’s because a highly targeted audience means you’ll have fewer buyer personas. You can spend efficiently, targeting specific types of prospects.
More Social Proof
Aligning your products or services with a small group of customers is an excellent way to encourage word-of-mouth marketing and positive reviews. This form of social proof is powerful. Recommendations can carry your business into a larger, potentially more profitable market.
Mass markets often evolve from niche markets. So while you’re starting small today, consider the big picture, and start building the foundation that’ll help you succeed on a grand scale.
Less Competition
Operating in a niche market means you’ll deal with less or no competition. Many companies or individuals like to serve many customers. By going narrow, you’ll offer a specific product that’ll eliminate many companies from your customers’ radar.
That said, there may also be fewer customers looking for your product or service. So you’ll need to enter a niche market that has an adequate audience.
Increased Brand Loyalty
Niche marketing allows individuals and businesses to improve brand loyalty. Engaging with fewer people means you’ll find it easier to nurture prospects and build quality relationships. Your audience will know that you understand their vibe. They’ll see you as a true partner, rather than a vendor who’s only interested in their money.
How to Find a Niche Market
1. Reflect on your passions and interests.
Being able to constructively approach and capitalize on a niche starts with an intimate knowledge of the space. At its core, every niche is based on a specific community, and you can‘t really appeal to a specific community if you’re not a part of it.
The most effective niche-occupying entrepreneurs start with passion and a vested interest in whatever concept, product, or process their offering suits — so as corny and “self-help-book-y” as this sounds, you need to start with you if you want to pin down the niche you're best-equipped to appeal to.
Where do your interests and skills lie? Is there a hobby you're particularly passionate about, an activity you're particularly good at, or a group of people you understand particularly well?
Consider these questions as you identify your niche:
- What skills come naturally to me?
- How do I approach problem-solving?
- What topics do I enjoy learning about?
- How do I enjoy spending my free time?
- Do friends, family, and colleagues request my advice on a specific topic?
Writing your answers to these questions will help you identify your core strengths. This allows you to build on a niche market idea you already love.
2. Identify the problems and needs of your customers.
Let‘s say you nail the first step. You’re thinking, “Holy cow! I know exactly what niche I'm going to go for!” First of all, congratulations! Second of all, now that you know the “what,” you need to start considering the “who.”
In a lot of ways, a “niche” isn‘t an abstract concept — it’s the people who are interested in that concept. In other words, your target audience is your niche, so if you want to carve your place in a specific space, you need to understand who you're going to be selling to.
Construct thoughtful buyer personas. Understand factors like your community‘s typical demographics, the various categories of buyers that invest in offerings like yours, and how much they’re willing to spend.
Try to find your “space within the space.” If there are other players in your niche, take a more granular approach and find a more specific class of customer you can appeal to.
Once you have your personas in mind, take time to conduct market research to get a pulse on their buying behaviors and typical challenges. Consider reaching out to prospects in the space to get a more human sense of what they go through.
One way or another, get a sense of their needs, interests, and motives. That will set you up to deliver on the other points listed here.
3. Research the competition.
Unless you beat everyone to the punch, there are probably going to be other players angling for position in your niche. You need to understand who they are, who they appeal to, their brand identities, and why they interest their customers.
Again, you‘re trying to carve out a "space within a space" — you don’t get there by shooting in the dark. Luckily, there are a lot of tools and resources you can leverage to better understand who you‘re up against. Let’s explore some of them.
Exploding Topics
Exploding Topics is an excellent tool that allows entrepreneurs to find emerging trends before they take off. Here’s how it works.
Let’s say you’re interested in the beauty niche. To find emerging trends, you’ll visit explodingtopics.com and use the “All categories” filter. Once you click “Beauty,” you’ll get a result like this.
From there, you can see your competitors in that market and find your own way to shine.
Google Trends
Let’s say “Bakuchiol” from the beauty trends interests you. A competitive research tool like Google Trends helps you know how frequently people search for this term.
As you can see below, the interest in the term has been growing steadily since 2019 in the U.S.
With this data, you can get an idea of market size and demand.
Answer the Public
To find a market around your search term, use a tool like Answer The Public to find a niche for different product categories.
For instance, if we enter “Bakuchiol for” in Answer The Public, we’ll see 331 results like bakuchiol for acne, body, blackheads, breastfeeding, skincare, and face.
Each result provides a niche opportunity for you to explore.
Ubersuggest
But before going all-in on any keyword, use a free keyword research tool like Ubersuggest to get a detailed overview of each term.
For instance, when we plug in “bakuchiol for acne,” we see it has a high-paid difficulty and moderate cost per click.
Other tools to use for competitor research are:
Use these tools to explore the best-selling products consumers are researching and see if your new business can meet their needs.
4. Define your niche and its profitability.
I'm going to let you in on a little secret only the most elite entrepreneurs know. Ready? Businesses are generally established to make money. Boom. You‘re welcome. That’s the kind of insight you can only find on The HubSpot Sales Blog.
Even if you‘re passionate about your niche, your offering, and the community you’re going to serve, your endgame is still going to be generating profit — so before you try to carve out your place in your niche, consider the following factors:
- Product quality. Is your product handmade, eco-friendly, or premium?
- Price. Do you want to sell luxury items or will you price them moderately?
- Customer location. Where is your target audience? Are they in a certain country or region?
- Customer values and interests. Are you targeting vegans, environmental enthusiasts, travelers, or sports lovers?
- Customer demographics. Are you selling to straight folks or those in the LGTBQ+ community? What’s their age range, education, and income level?
Your idea could be profitable if you research the market and discover similar products, but few companies sell them.
Look at the price points of competitor products so you can price yours competitively.
Resources like Amazon (for products), G2 (for software), agency directories (for services), and PRICEFY.IO (for price monitoring) help you evaluate competitor pricing and determine prices for your products and services.
5. Test your product or service.
Create a simple website or landing page for your business so customers can find you. Offer a trial period of the product or give out free samples to your target customers. This initial test period should not cost a large amount of money. However, you can certainly use paid ads to drive traffic to your website.
See if people want to put money towards your product with crowdfunding sites. Not only can you gain funding, but you’ll also get your product in front of potential customers.
If the test is not as successful as you hoped, don’t scrap your idea entirely. Go back to the drawing board and find key areas where you can improve your product or marketing.
If you’re wondering what a niche business looks like, below are seven examples of businesses that cater to niche markets.
6. Articulate a clear, compelling value proposition.
This one might qualify as something you do after you find your niche, but it still bears mentioning. If you're going to identify and capitalize on a niche, you still need to stand out within it.
It‘s the culmination of every other step detailed here. If you want to craft a compelling value proposition, you need to thoroughly understand your audience, and you’ll get there by applying your customer and competitive research — along with reflecting on your personal experiences.
Ultimately, you have to approach your niche with something distinct and legitimately valuable. Pin down what you, as someone who's passionate about your space, can get out of your offering.
From there, you can factor in the other insight you‘ve gathered through the process described in this section and present a value prop that gets at the core of what you can offer and why it’s worth your audience's attention.
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Niche Market Examples
- Georgetown Cupcake
- The Container Store
- Drybar
- SoulCycle
- Ties.com
- Dorm Mom
- Kirrin Finch
- Frostbeard Studio
- Jacamo
1.Georgetown Cupcake: A bakery that only bakes cupcakes.
Georgetown Cupcake‘s niche is specified in its name. Opened in 2008, the franchise sells one item and one item alone: cupcakes (although, to the bakery’s credit, it has rolled out over 100 flavors in the past 16 years).
2.The Container Store: A store that only sells containers.
The Container Store is a specialty retail chain that focuses on storage and organization solutions. The company offers a range of products, including custom closets, shelving, bins, baskets, and other organizational tools — tailored specifically for consumers looking to de-clutter their spaces.
3.Drybar: A hair salon that offers blowouts, no cuts or color.
Drybar is a salon chain that specializes in blowouts, offering professional hair styling services that focus exclusively on washing, drying, and styling hair. Unlike traditional salons that provide a range of hair care services, Drybar's concept revolves around providing a luxurious, pampering experience centered around the blowout, ensuring clients leave with perfectly styled hair.
4.SoulCycle: A workout studio that only offers indoor cycling classes.
SoulCycle is a fitness company structured exclusively around indoor cycling classes. It takes a community-oriented approach to spin — appealing to a variety of consumers interested in indoor cycling.
5.Ties.com: A clothing store that sells men's accessories.
Ties.com is an online retailer that primarily specializes in men's neckwear and accessories, offering a wide selection of ties, bow ties, pocket squares, tie bars, and other related items. The company aims to provide high-quality, stylish products at affordable prices, catering to a range of fashion preferences from classic to contemporary.
6.Dorm Mom: Laundry service for college students.
Dorm Mom is a specialized laundry service that caters primarily to college students, offering convenient and reliable laundry and dry cleaning services. The company provides a range of services, including regular laundry pick-up and delivery, dry cleaning, and even linen and bedding cleaning.
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7.Kirrin Finch: A LGBTQ+ clothing brand.
Kirrin Finch is a fashion brand that specializes in creating gender-inclusive clothing with a focus on menswear-inspired apparel for women and non-binary individuals. The brand offers a variety of clothing items, including dress shirts, blazers, pants, and accessories, designed to provide a tailored, androgynous look that challenges traditional gender norms.
8. Frostbeard Studio: Scented Candles for Book Lovers.
Frostbeard Studio is a unique company that specializes in creating literary-themed candles and home fragrances inspired by books and beloved fictional worlds. Founded by book lovers, the studio crafts a variety of scented candles, wax melts, and other aromatic products that evoke the ambiance of favorite novels, characters, and bookish settings.
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9. Jacamo: Big and Tall Menswear
Jacamo is a men's clothing brand that offers a wide range of stylish and comfortable apparel, catering especially to men of all sizes, particularly plus sizes. The brand provides a diverse selection of clothing, from casual wear and activewear to formal attire and accessories, ensuring that every man can find fashionable and well-fitting options for any occasion.
We asked entrepreneurs: “How did you find your niche? What tips do you have for newer entrepreneurs looking to identify and appeal to the right niche market?”
1. Oleksiy Torokhtiy, Founder of Torokhtiy Weightlifting, says, “Let your niche find you.”
"My niche found me. I love weightlifting and have been at it for over a decade. I would still have continued weightlifting if I had not ventured into entrepreneurship. New entrepreneurs, how do you like to spend your days? What would you be comfortable doing for hours or days? Does it make you feel fulfilled? What do your friends or others come to consult you about?
“The key is to find whatever works for you. For example, if you love building websites, sell your services and build websites for people. Eventually, you can start a company of your own. Do not get caught up in the unending cycle of constant brainstorming and endless research about what you would like to do. You will end up getting paralyzed with fear and anxiety and never start. Look inward into what you are good at and love doing, and let your niche find you.”
2. Paul Chow, CEO and Co-Founder of designdynamics.io, says, “Passion leads to niche opportunities.”
"Finding my niche stemmed from my passion. Since 2012, I've been obsessed with prop making, which led me to explore various creation methods like woodworking and CNC machining. In 2016, when I got my first 3D printer, a whole new world opened up.
"I wasn't just printing — I was building, repairing, and customizing these machines. This personal fascination with 3D printing technology is what made me realize the niche opportunity. There are creators out there, like myself, who crave high-quality, custom 3D printing solutions but may not have the expertise to build or maintain their own printers.
“So, for new entrepreneurs, my advice is to look inward! What are you passionate about? What problems do you encounter in your own field that others might face too? Those personal interests can be the seeds for a thriving niche business.”
3. Abhi Madan, Co-Founder and Creative Director at Amarra, says, “Focus on expertise and market gap intersection.”
"In pursuing my passion for high-end fashion design, I found my niche almost organically. Having a strong interest in and knowledge of formal attire, I decided to channel my creativity into handcrafted gowns for proms, weddings, and other formal occasions. Nothing quite like it existed in the market, and thus, Amarra was born.
"For newer entrepreneurs, finding the right niche is about understanding where your expertise, passion, and a gap in the market intersect. Tap into your knowledge and interests, assess the existing market, and identify the unique value you can provide.
“Once you've identified the niche, learn to speak the language of your target audience. In my case, I had to understand the aesthetic preferences, purchasing habits, and emotional needs of those looking for exclusive, luxurious gowns. Success in a niche market is a blend of unique value propositions, a thorough understanding of your audience, and keen market insights.”
4. Jason Bland, Co-Founder of Custom Legal Marketing, says, “Build around your most successful clients.”
"When we started our digital marketing agency 19 years ago, we were working for various industries. However, with our law firm clients, we were able to deliver measurable results in their local markets faster than some national brands, which sometimes had lower marketing budgets.
"As we shifted our focus to the legal industry, our entire infrastructure grew around what worked for law firms. The question to ask yourself when finding your niche is, “Who has the most to gain from my offering?”
“We built our law firm marketing company around the client base that was most successful using our service. If you focus on building your business around serving the community that you and your team can serve the best, you can't go wrong.”
5. Jan Brandrup, CEO of Neurogan Health, says, “Inspiration drives niche business success.”
"When finding your niche, I highly recommend finding your ‘why.’ Our ‘why’ is what inspired us to create our whole business—the illness of a family member that meant we wanted to find the right solutions.
"That ‘why’ is your power, because the first thing many people think when they see a business with a specific niche is ‘Why?’ And they are far more likely to engage further because of your human story, rather than just the products.
"If your business has meaning, it is what gives your business its niche, so never be afraid to share how you came to it, because somebody else may have been looking for that exact same solution, and that is what leads you to build your customer base.
“Of course, we want to reach as many people as possible, but especially as you get started, that 'why' behind your niche can also help you build trust with a new audience.”
6. Roxie Lubanovic, Co-Founder of Frostbeard Studio, says, “Combine passion with market research.”
"As the co-founder of Frostbeard Studio, specializing in candle scents for book lovers, I found our niche through a blend of passion and market research. Our journey started with a small pottery business, but we quickly realized the potential in combining our love for literature with our craft. Noticing a gap in the market for unique, book-themed candles, we pivoted and created a product that resonated with a specific community of book enthusiasts.
"One essential tip for new entrepreneurs is to cultivate a deep understanding of your interests and hobbies, as they can often lead to discovering a niche. In our case, our combined backgrounds in Studio Art and English Literature provided a natural segue into creating candles with literary themes. We tapped into a community that shares a love for books, which allowed us to connect deeply with our audience and tailor our products to their preferences.
"Another crucial strategy is to leverage platforms where your niche audience is active. For example, we started selling on Etsy, where our bookish candles quickly became best-sellers, thanks to the platform's focus on handmade and unique items. This success enabled us to launch our own website and expand our production, selling in bookstores and gift shops nationwide.
"Consistently seeking feedback and engaging with your community can significantly refine your niche offerings. We've created over 100 unique candle scents, many receiving 5-star ratings, by listening to our customers and incorporating their preferences into our new products. Our DIY ethic has remained unchanged, ensuring authenticity, which resonates well with our target market. This hands-on approach has been vital in maintaining quality and fostering a loyal customer base.
“Always look for ways to enhance and personalize the customer experience. We host exclusive events, like candle-making sessions, to deepen customer engagement. This interaction not only builds a stronger community but also provides invaluable insights into customer desires and trends, helping us stay ahead in our niche market.”
Find Your Lane in a Niche Market
By specializing your products and services in a narrow market, you’ll better use your resources, produce products faster, and develop a loyal customer base. Selling to a niche market can be a short- or long-term strategy — the key is finding your audience and tailoring everything you do just for them.
Editor's note: This post was originally published in October 2018 and has been updated for comprehensiveness.
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