WHY FINDING A NICHE IS SO IMPORTANT TO HOME BUSINESSES
by: Cary Christian

I'm sure you've read a lot of articles in ezines and on websites that talk about finding a niche. I've talked about it quite a bit myself.

It's considered a given that finding a niche is important, and it's a very logical concept, but have you ever been shown just what it can mean to you from a market standpoint?

For people running a home business the most logical way of starting out is by selling through affiliate programs and (shudder) MLM. It's easy to get started and you appear to be given all the resources you need to get up and running quickly. But let's take a look at the reality of affiliate and MLM programs and see what it means to you.


HOW BIG IS YOUR MARKET?

Many promoters of home business programs will tell you that the market for their home business programs is huge. There are anywhere from 500 million to 1 billion people online and the ranks grow by the thousands on a daily basis. The promoters will tell you that if you can just sell to a tiny fraction of these hundreds of millions of people you will generate wealth beyond your wildest dreams.

Okay, that's just plain BS!

First of all, the number of users on the Internet isn't the number that is important. Let's break it down to what IS important: how many of these people are likely to be interested in your program?

1. 500 million to 1 billion users include fathers, mothers, sons and daughters in the same household. Assuming the estimates of the number of people online are somewhat accurate, let's say there are 200 million households.

2. Of these 200 million households, most are online to track their stock portfolios, play games, chat with friends, learn new things, explore their hobbies, and so forth. In other words, the Internet is like TV and telephones. It's an information and entertainment source.

At any point in time there are about 400,000 people in the US actively considering starting their own business. Not all of these are considering starting a business online. However, there are several times that amount online who are at least considering an Internet business as a way of making extra money and when you add in non-US individuals. Let's assume it's 5 percent of the households online, so we'll say your target market at this point is 10 million people. I think that's far too large, but we'll go with that.

3. Of these 10 million, probably only one in 10 is willing to spend a single solitary dime on their business. The rest are the freebie seekers who only join free programs and use free advertising. So that gives us 1 million people in our market.

4. The "super affiliates" online, those with tremendous contacts, limitless resources and very large subscriber lists, are going to beat you to the punch with the vast majority of the people in this market. The super affiliates know about the programs early, get placed in high positions, bring their massive lists into the picture, and the program is almost saturated before you ever get a shot.

5. Everyone recruited into these programs is normally going to be recruiting from this same 1 million person market. So you have hundreds of thousands of budding entrepreneurs all marketing to what really is a very crowded and small market. In fact, they're all marketing to each other! Very few people are winners in this game. The super affiliates are winners, and so are the creators of the programs, but only the crumbs are left for everyone else.

Let's say you live in a city of 1 million people. Do you believe Wal-Mart or Sears would place 100,000 stores in a city this size? That's 10 customers per store. That's what's happening with online business opportunities.


WHAT HAPPENS WHEN YOU FIND A NICHE?

Now let's take the flipside. You've recognized that selling business opportunities is not where you want to be. You want to sell either physical products or information products that appeal to general consumers. You do your research and find a nice niche in supplying anti-fog sunglasses for golfers that have specially coated lenses that help them read the greens better. You've tried them yourself and think they are absolutely fantastic! You can buy them for $45.00 and sell them for $90.00 and the company will drop ship one pair at a time for you. None of the major golf retailers are offering this or a similar product.

Based on some estimates, there are about 30 million golfers worldwide and more than half of them are online. Therefore, you have a potential market of 15 million individuals. At the moment, you have NO competition.

What sounds like a better market to you: 100,000 people trying to sell the same old recycled business opportunity garbage to 1 million people or one person (you) selling to a market of 15 million people?

People tend to think of niches as being small markets. The reality of it is, many niches are larger than the business opportunity market when you consider the factors discussed above.

The niche you find might not be as good as the one in the example, but by virtue of it being a niche, it will still be a one-to-many rather than a many-to-many relationship which will make it infinitely more profitable.

And that, numerically, is why you have to find a niche. Once you look at the numbers it becomes so obvious that this is the only way to go you'll wonder how anyone can miss it. But they do. People are deluged with such mind-numbing business opportunity garbage day in and day out that they miss the obvious. Bad information and bad advice turns their online dream into a nightmare of one failure after another.

Is it easy to find a niche? No, it takes a lot of work combined with a little creativity, but the payoff can be enormous.

In the very near future I'll cover some specific ways you can go about finding a niche of your own.

Copyright (c) 2003