When Is A Niche Market Over-crowded?

Niche Market Information and Strategies

 By focusing on a very tight niche market, and offering only products, services, and information within that niche, the market naturally gravitates to you.

When investigating starting a business on the Internet, the advice you’ll very frequently get is to build a business in a targeted niche market. You’ll even be advised to find a niche within a niche in some cases.

By focusing on a very tight niche, and offering only products, services, and information within that niche, the market naturally gravitates to you. The world will begin recognizing you as the expert.

When someone is searching for information on that topic in the search engines, since your site is so focused, it naturally ranks higher.

Since you’ve spent a lot of time really researching the topic and related keywords, you should naturally perform better in the pay-per-click search engines too. Your focus will enable you to uncover advantages that others miss.

As you initially choose a niche and begin to do your research, you may notice that there are already a LOT of people in that niche. There are already a lot of established competitors. So you begin to doubt whether or not to get into that market. How can you be sure that you’re not wasting your time by getting into an already saturated market?

My rather bold statement to clients who ask me this questions is that as long as you differentiate yourself sufficiently, you have NO competition.

If you enter a market where there are already a lot of sellers, that’s a good sign. It means that people are interested in that product category.

If you check out the pay-per-clicks and there are already 500 bidders, that’s a good sign. Usually, that means that the demand is so high that it attracted all of those bidders.

Your challenge, again, becomes to find a unique, unfilled need in that crowded market and fill it. How do you do this? You begin with research. Keyword research is the easiest way to do it.

Here’s how I begin, and how I often have clients begin… Brainstorm, every term that you can think of related to your anticipated niche. Then use a keyword research tool to look for related terms. As you compile a list of more and more terms related to your topic, you’re doing two things. You’re searching for an under-served segment, and you’re looking for terms that you’ll target in your search engine marketing efforts later. Keyword research gives you a very powerful snapshot of:

  • How many searches were done for each term last month.
  • How many webpages there are targeting each term.
  • The ratio of searches to webpages targeting the searched term.
  • How many pay-per-click campaigns there are at Google AdWords targeting a term.

That is very powerful information! If you see that a lot of people are searching on a term for example, but that there aren’t many merchants targeting this market, it may be a good market for you. It may also not be a good market. It is entirely possible that the reason no one is targeting the market is because people interested in that topic are largely unwilling to spend money on things pertaining to the topic.

Getting back to the very basic question of when is a market overcrowded – it’s overcrowded when you can’t make a satisfactory return on investment in that niche. What you consider a satisfactory ROI is a personal judgement. It depends upon what you could get if you invested your resources in an alternative investment.

Frank, I don’t see why you’d want to enter an arena where the competition is already very fierce… such as Internet Marketing. I’ve already shared with you (in earlier articles) that there are people quietly making six or even seven-figure incomes off in fairly obscure niches.

One final opinion on over-crowded niches…. Many people get excited about a potential product until they start their research. Then when they see that there IS competition, they use that as an excuse not to go through with the project. They then move on to another potential niche, and repeat the process. After they’ve checked out 20 different niches, and concluded that they’re all too competitive, it’s really time for them to take a serious look at their thought process.

Hopefully you do thorough research, but don’t let a little competition stop you from entering a market. If there is no competition in a market, it’s often because others have already investigated that niche and determined it to be a total waste of time. Sometimes it’s good to follow the crowd… Just figure out a way to stand out in that crowd.

Willie Crawford has been teaching others how to build an on-line business since late 1996. Frequently featured in radio, magazine and newspaper articles and interviews, Willie teaches the average guy what the top marketers are doing but seldom talking about. Willie provides detailed how to information in his newsletter, through his personal coaching, and at his annual how to workshop.

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